How to form a business case for a project’s benefits

by Nicki Carruth | Jun 15, 2021 | Project Assurance

How do you know that your good idea is the right thing to be doing for your organisation? How can you know whether the way you want to solve a problem is the best way to do it? Before your project gets going, it needs to justify its existence. Even if all stakeholders informally agree that a particular initiative needs to happen, many of the organisations we work with, including the public sector and large enterprises, require a formal business case to be submitted, reviewed and accepted. It makes sense. An organisation could do many things, so there needs to be a way to choose which of those things it should do. A clear, coherent and compelling business case is a good way to do just that. If you already have a business case and are after some expert assurance that it’s up to the job, you can skip reading and head over to our page about IQANZ’s Business Case Assurance. If you’re not quite ready for that, read on to learn more about a business case and how it can effectively communicate the rationale for investing in a planned project.

Have a clear view of the existing need or problem to solve

The why; it’s the heart of a business case. Projects exist to solve problems or deliver new things for your business teams to use. Your business case needs to be crystal clear why doing your thing, at that moment in time, out of all the other things an organisation could do, is the right thing. So as you work out your why, talk to the people who will benefit to surface all the reasons for the project. You can start by answering questions like:

What is the current issue or objective facing the business?
What barriers exist in the organisation’s people, processes, technology or structure that need a project to remove?
How is the business currently disadvantaged by operating in the status quo? E.g. lost revenue, missing quality objectives, inefficient processes.
What are the advantages for the organisation of rolling out a solution through a project framework?
How does this existing challenge or issue impact other projects or initiatives peripherally?

These are just some questions, but the team here works to Treasury’s Better Business Case (BBC) model, based around 5 question areas. We’ll touch on some of these in this article, but you may wish to explore more about BBC, or chat to our team about applying BBC through a formal Business Case Assurance engagement.

Justify the project’s impact on strategic objectives

A business case written in isolation of the overarching goals of your agency or organisation is destined for push back or denial. Working through the proposed project’s impact on strategic objectives helps to contextualise the activity against measures that already mean something to the business and senior leadership team. Ultimately, contributing to or delivering on your organisation’s KPIs and objectives should lead internal projects and programmes – anything that appears to be outside of these should have a tough time getting approval. Before writing a word of the business case, it’s important to understand which of the organisation’s strategic objectives are of greatest focus, , as well as getting the most up to date status against each of these. This often requires a dive into other BAU work and live projects to ensure there are no double up or conflicting elements to the proposed project. Put simply, you need to do the research before diving in. While you’ll read more about the strategic case in Treasury’s information, it’s important to remember their rational acronym: SMART – specific, measurable, achievable, relevant and time-constrained. Having preliminary planning around a project’s ability to satisfy each of these considerations can make the business case writing much easier for those involved.

Explore the commercial and financial feasibility carefully

It’s probably the most time consuming and challenging part of the business case, but essential. A team tasked with crafting a business case will need to demonstrate the overall costs associated with the project, as well as a clear understanding of the options available (e.g. providers).

A business case needs to not only have a clear breakdown of the project’s anticipated full-life costs, but also consider this expenditure in context of a broader budget and spending plan by the agency or organisation. The stakeholders responsible for signing off will be weighing up the proposed costs in relation to other operating and capital expenditures across the business. The more the business case can take this into account, the more compelling a case for approval.

Business cases should outline the method for acquiring providers to supply various services and technology to a project. Part of this will require an explanation of the market of vendors within the particular space (e.g. financial management systems). The business case does not have providers all lined up, as a procurement process will be required for this once the project is approved.

Financial and commercial considerations need to be thorough and accurate. The extra layer of assurance that IQANZ provides can help agencies put forth proposals with confidence that t’s are crossed and i’s are dotted.

Do the benefits outweigh the costs (or, is this project worth it?)

When identifying how much your project is likely to cost, it is equally important to understand whether the expense is worth the outcomes. They are two sides of the same coin – will you get more back from the project than you put into it? If you can answer yes to that question then your business case has a greater chance of providing a strong justification for investment.

Benefits identification is a mix of art and science. At this early stage, your level of certainty is going to below, but you should be able to identify some key benefits that completing the project is likely to deliver. Your benefits should pass the following tests:

Are they clearly defined, using change terms such as increased, faster, lower, cheaper?
Are they clearly observable? What difference will be noticeable following the project and how will this be shown?
Are they clearly a result of the project, rather than other things going on in the organisation at the time?
Are they clearly measurable? If your benefit isn’t able to be measured in some tangible way, it can’t be used to justify your investment.

Create an approach for project delivery (who, what, when, how)

Alright, here’s where you get into the details of actually doing this project. Budgets are signed off, external vendors in place. What does the project look like being delivered?

You’ll want to consider:
Who will be involved from a governance and delivery perspective?
What deliverables are included with this project?
At what point will significant milestones happen?
How will the project team work together and across the broader business?
Where will the team(s) be based?
What BAU resource is required vs. additional hires (like contractors)?
How will the project’s success be monitored?
How will the project’s governance be managed?

It’s at this stage the lead project manager will be heavily involved. Having this involvement early can help craft a project approach that’s not just palatable for signoff but practical to deliver.

Through outlining an approach, you’re able to reinforce the benefits of the project, such as more effective utilisation of current resources and a laser-focused set of objectives beyond operational BAU.

Demonstrate critical thinking and ‘throw rocks’ at the proposal before it’s delivered

Part of devising a business case is addressing likely concerns or questions in the document itself. This can reduce the back and forth leading up to a decision on approval. Depending on the group of stakeholders involved with developing the business case, you will have various viewpoints who can assess the document’s strength. For example, a technical lead or Architect will be able to weigh in on and refine the proposed technical approach. Whiley you might not be able to address all the holes (no project is perfect), having a formal process of critiquing the approach will help to plug some gaps. Having the business case reviewed by others in the business not familiar with the project, but with a good understanding of the organisation as a whole can be excellent as a fresh set of eyes before it gets to sign off. But in order to ensure that your business case is consistent with the standards set out in Treasury’s Better Business Cases guidelines (or whatever standard your organisation expects you to follow), you’ll really want to engage an objective, outside partner for that peace of mind. IQANZ’s team have done this for many New Zealand public sector clients, guiding the process from start to finish. We also stay up to date with all developments within business case best practices, passing these learnings onto our clients.

Assess risks as thoroughly as possible with mitigation

Risk assessment goes a step beyond just using critical thinking and quality control – it’s about surfacing as many potential issues that could come up through the project’s lifespan as possible – then proposing a way to reduce this risk or handle it if it comes. Risks are just a fact of any project – nothing is 100% risk free (despite what the infomercials tell you!), so having a transparent account of potential risks will be viewed as good preparation rather than reasons not to proceed.

While we can’t give you a cheat sheet on risks given how varied each project is, you can be assured there are risks with regards to:

People
Budget
Scope
Technology
Fit for purpose
Dates and Milestones
Outcomes

Don’t rush the risk part of your business case – the more risks identified now reduces the chance of a project being caught off guard later.

Clear and honest language

Despite being a serious document with plenty on the line, a business case should observe plain English standards as much as possible. The audience for this document can range from subject experts to senior leadership and even ministers. The document must be accurate and specific, without relying on unexpanded jargon that excludes certain stakeholders. Business cases need to be as black and white as possible, avoiding any sales or marketing rhetoric. Your goal is to translate the real benefits of a potential project as best you can in the written medium. This is not to say you shouldn’t write a compelling business case – simply you must use facts and evidence to do so.

Need help with getting your project back on track?

Get in touch today to find out more information on preparing a strong business case. We provide expert assurance services for organisations developing business cases both in the public and private sector and can tailor an approach that suits both the nature of the project and the size of your business case.