5 Common Mistakes Made When Writing A Business Case

by Nicki Carruth | Aug 16, 2022 | Business Case Assurance

Business cases aren’t straightforward, nor are they quick to complete. Any investment made in a business needs to be well-considered before leadership can be confident in the benefit it will bring to the organisation. Given the pace at which most modern organisations operate, it’s understandable that business cases can sometimes fall victim to being rushed through or missing key details. But these issues derail a potentially great investment’s opportunity to see the light of day. For that reason, we believe strongly in treating business case development with the same rigour as a programme or project.

In this article, we’ll discuss 5 common mistakes we see with business cases and how you might address these.

Rushing through the research process

It’s tempting for a team to start building the business case as soon as possible. This desire to get underway can actually hamper the final product. The business case may end up being disjointed as information is tacked on piece by piece without a full understanding of the problem or opportunity, market, the business and financials. Like many areas of writing, knowing where the business case is going and the boxes it needs to tick before writing a single word is a tremendous advantage.

The research phase of an investment/project business case warrants as much if not more time than the creation of the document. Researching a business case requires involvement from many stakeholders across the business, but also needs a team to collate and uncover answers to their questions. It’s common for business analysts to be involved in the research, along with technical expertise, financial staff, risk analysts, legal counsel and any other touchpoint that will provide or find the answers to key questions.

The risk of rushing through this process is indeed just that – the risks it creates. An unrecognised risk is far more dangerous than a larger risk that has been well-documented and planned for. If the business case doesn’t take account of the risks and mitigations to the potential investment, and it’s not picked up during the review or sign-off process, the business leaves itself exposed to blowing the budget or making a mis-step in the delivery. When unexpected large costs turn up, and there’s no budget, the project may fail.

Research also helps get the project started with much better momentum; the conversations on procurement, technology, comms, legal etc have all started before the project so once approval is obtained, kicking off is much easier than having to brief in business units and find answers after the fact.

Not consulting the right people in the business

Stakeholders are those in the business that have a direct interest in the outcomes or delivery of the project. They will often be required to give approval or guidance to stages of delivery – or be in charge of those with the job to do so. For any large scale programme or project, stakeholders come from far and wide across the business, providing context and advice to complete each aspect of the business case. Proper consultation from these parties can avoid bigger issues down the road when the business case is submitted or the project has kicked off. If the business case is collated without input from those who will be involved later on, that same stakeholder or entire business unit may lack the buy-in to support the project. That often leads to huge delays and arduous negotiations around delivery and resources.

If the team responsible for creating the business case has consulted with the wrong person on any of the financial, legal or delivery matters, there’s a risk of sinking a lot of time into the business case under inaccurate or incomplete information. Given the business case usually requires paid resources to put it together, it’s important to do the due diligence in the first place and reduce the likelihood of rework or filling gaps later.

Early on in the process, a steering committee or similar forum should confirm all the people who should be involved. Creating this list and having a structured approach to meeting and gathering information will establish a good foundation for the business case. If in doubt, escalate the matter to the appropriate leader in the business who can provide direction as to the right people to consult. Large organisations often have a central directory of key stakeholders which can make this question of who to go to much easier.

Skipping over risk analysis

Risk is part of every business, project and investment. An executive or senior leadership team is not looking for investments to be free of risk – if they were, nothing would be approved! The decision about an investment has far more to do with the surfacing and mitigation of risks. Consider a digital transformation – one of the bigger initiatives across various NZ public sector organisations at the moment. The cost can often reach into the tens or hundreds of millions across the transformation lifespan. The risk financially is therefore large, but transformation programmes are still commonly put into practice. This is because organisations have spent the time to take stock of the risks and created ways around these.

Risk analysis should involve parties within the business whose responsibility it is to monitor and manage risk broadly. This way, they can help apply proven and robust methodology to risk analysis, but also identify other risks in the business that this investment might impact or be impacted by.

Thorough risk analysis will give stakeholders and executive teams more confidence to proceed or make an informed decision. If there are obvious risks that haven’t been captured in the business case, it not only creates rework to go back and assess these, but reduces the credibility of the business case – if this glaring risk was missed, what else has been?

Being out of step with the financial feasibility

Investments may be attractive from the perspective of their strategic alignment, and clear path to delivery, but if the financials haven’t been considered then even the best ideas won’t get anywhere. Feasibility of project’s affordability needs to be weighed up in a number of ways, including:

What is the potential return on this investment (financial, strategic, public good etc)?
What other programmes and projects are scheduled and how do their costs impact this proposed activity’s viability?
Does the business have the available capital to make this investment within the timeframe outlined?
Are there upcoming costs to the business that need to be considered?
Is the investment and return for this business case a better use of the organisation’s budget this financial year vs. other pending projects?

The senior leader and their team assembled to deliver the business case need to prioritise the financial feasibility – don’t make the mistake of omitting those responsible for managing and monitoring the organisation’s budget, as they can provide useful intelligence on how your project may be best delivered. The executive team will most certainly be interested in whether an investment is consistent with the financial year’s budget – and quick to push back if it looks unrealistic.

Relationship Between Programmes and Projects IQANZ

Not telling the story clearly

On the document itself – like any business documentation or written work, the structure is crucial to delivering a cohesive argument. Your business case should tell your readers why – why there’s a problem, why it needs to be solved now, why the way you think it can be solved is the best way. If your business case can tell this story clearly and without waffle or weasel words, your readers will thank you. Whilst the business case needs to be thorough, it shouldn’t create reader fatigue. The ways a business case structure can do this include:

Not laying out the case chronologically from the strategic/business problem through to the different considerations and the solution.
Not using headings and subheadings effectively to allow the reader to access certain information easily.
Not providing a logical structure around risk identification and mitigation.
Making it hard to understand the delivery approach.
Creating a business case that’s inconsistent with the organisation’s preferred formats of this kind of document.

Treasury’s Better Business Cases framework is a good reference point for structure, although each business may have certain requirements for their business cases beyond this. Whatever the approach, take the time to review and restructure your business cases and have someone outside the team preparing it to review it without any context. The best arguments are those that don’t take long to understand.

Want to learn more about creating business cases that succeed?

Creating business cases to unlock projects and programmes that add value is part of what the IQANZ team do. Our assurance services extend to business cases as we believe they create a solid foundation on which to build success. If you want to ensure your business case is giving you the best possible chance of securing an investment, we’d love to hear from you. Chat to our team to learn more about how we approach business case assurance.