From the course: Business Analysis Foundations

Purpose of a business case

From the course: Business Analysis Foundations

Purpose of a business case

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- So, how does an organization choose their projects? Are there any specific methods or documents that can help justify the resources needed? The business case, developed by those requesting a solution, is usually developed to help with the justification. This document is often a formal document. The time and effort required to develop it, though, should be consistent with the size and importance of the solution being justified. It will include the results of the needs assessment and findings previously discovered with key stakeholders from the organizations impacted. It is a living document. It helps ensure that the project remains aligned with the organizational objectives. This is especially important when organizational objectives change. If a project or program is no longer in alignment with the current strategy, it runs the chance of being canceled. Not all organizations create business cases or go through a formal process of strategic planning to justify expenditures of organizational resources, both money and individuals, for project efforts. Some organizations require the business case for capital expenditures or where time or cost limits are met. Where a business case is not required or developed, executives may approve projects based on compliance regulations, competitive pressure, or personal preferences, the last of which is not a preferable method. When a business case is developed and reviewed as part of a portfolio management process, it becomes a valuable input to the initiating of the project or initiative. It provides valuable information of the business need and the proposed solution. If it's not created, the scope of the project or initiative may creep beyond what was initially envisioned, resulting in cost overruns, delays, and possible rework. The worst situation is that the result of the effort is never used because it didn't meet the needs or expectations of the original requester. This documents the potential benefits and justifies the resources needed. These resources may include people, supplies, and equipment, as well as financing options. The benefits need to be weighed against the cost of the solution, but the cost is not just for the development of the solution, but also for any ongoing support requirements. This analysis reviews the findings from the needs assessment activities to the goals and strategic objectives of the organization. It becomes one of the key inputs for project initiation, providing a concise and comprehensive view of the business need and the proposed solution for that need.

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