Business Cases

Business Cases explain why we want to make changes, what we hope to get out of the change and how much it will cost, they are the fundamental bedrock of change programmes and projects. It is important that the business case is a fair unbiased assessment of different courses of action, they should not be a sales document for the programme managers favourite idea.

The business case compares the benefits we hope to achieve against their expected cost, not forgetting to include any disbenefits that may occur as this prevents unpleasant surprises later. It is normal to include a number of optional courses of action for comparison, three to five options, including a default or do nothing option should be enough.

At the beginning of a programme or project the business case gives us the reason for starting. As the programme or project progresses they allow us to check whether the the objectives are still realistically achievable. At the end of the programme or project we can use the business case to show that we have achieved our objectives and at what cost. The assessment of business cases is important as it gives the programme or project the authorisation to proceed. providing a hard gate for the programme.

Costs are normally expressed financially. Benefits can be financial, which makes it easier to compare them with each other and their cost, but they can also be non-financial where it is difficult to convert the benefit to a financial value. What matters is that we know what we are going to get and what it will cost.

Costs are normally easy to measure with standard financial methods but we may need to think much harder about how we will measure benefits, particularly non financial benefits, if we cannot think of a way to measure a benefit, we should question whether we should keep it as a benefit. We need to do understand how we will measure benefits before the programme or project starts as we will often need to take a baseline before we make changes to allow us to measure any improvement.

The form of the business case can vary, conventionally the costs and benefits of a number of options are compared using cashflow forecasts or Net Present Value calculations, with a recommendation at the end. An alternative may be to present the activities in a menu describing the cost and benefit of each activity with a recommended selection of activities at the end.

%d bloggers like this: