Business Case – everything you needed to know and more

How do you learn better? By reading, by listening, by doing or by observing others? I, for one, understand things better when explained point by point.

If you’ve been following my blog for over a year now, you’re bound to know that!

In my career spanning close to two decades, I have done scores of presentations and been an audience to several more. An effective presentation is one that leaves little scope for ambiguity or seeks more clarifications. For precisely this reason, I’m a huge admirer of Business Cases, which I call “Persuasive Documentation”. Some of you would have a question about how is a Business Case different from a Business Plan, those of you who have been through B-School would have ground to dust. Every entrepreneur worth his mettle would know the difference.

Difference between B-Plan and B-Case

A Business Plan offers an idea for starting a new business, replete with timelines and long-term growth agenda. It is largely based on a vague notion of how the picture will pan out in the future, with not a fair understanding of future market trends and economic scenario. Hence, it’s mainly the germ of the idea and the plan to drive it in an unknown future. Nothing to undermine the B-Plan, why most new businesses have to start with one.

However, a Business Case is something more mature- in that it sticks to an aspect of the business already in function. A business case pitches for an idea or an investment in a project in an existing business and tries to convince why it should be undertaken immediately, at times scoring over other competing ideas and projects.

Let’s understand with an example

A Business Plan is a plan to start a business, like a Mithun’s Beer Brewery at a privately owned vineyard. It makes sense of this proposition through analysis of current market, product highlights, potential market, funds, people, marketing, etc. It is, however, based on several hypothesis and presumptions.

A Business Case would be developed for a project in an existing brewery, maybe to replace existing equipment or introduce new ones, to bring in new technology or people, to invest in specific marketing activity and the like.

Now you get the difference. A Business Case speaks for a specific goal or objective in the nearest future with specific returns in mind.

Software upgrades, replacing old machines with new ones, so that by enabling quicker and better output, we can achieve better customer satisfaction.

To sum it all, a Business Case is one that-

  • Offers a compelling case about an investment, implementation of an idea or a project
  • It needs to show how it will fare before, during and after the implementation so that it allows you to evaluate once it’s completed
  • It gives a glimpse of the tangible and intangible objectives and how they are achieved through the implementation

When is a Business Case needed?

Absolutely not when we’re planning a new venture, for that’s when a Business Plan comes into the picture. A Business case is needed in the following circumstances, though this list is just indicative

  1. When you’re proposing a change in system or process that involves approval from the board
  2. When you want to show how a change will add value to the existing business
  3. When you intend to outsource or change the way a particular unit of business is already bein done
  4. When you intend to change location or area of operation
  5. When you vying for a piece of the same pie of funds and are convinced that your case would yield the maximum benefits for all, over the other proposals that also need funds.

A well documented data-driven Business Case works in favor of your proposal and enhances the chances of being implemented.

Why is a Business Case needed?

As with most aspects of business, a compelling proposal as to why something should be done is of utmost importance when it comes to making decisions. It is also a good corporate practice where the people initiating a project or presenting an idea are themselves convinced about the feasibility of the outcome and hence pitch in on behalf of the same. It also determines the value that it will bring to the already existing business. Hence, if a B-Plan is all about strategic planning, a B-Case is all about Tactful planning. The success of every project depends on key factors like

  • It’s alignment to the achievement of company vision and goals
  • Responsible leadership and its absolute backing
  • Active participation from all stakeholders
  • A reasonable timeline for planning, implementation and delivery
  • A perfect fit of available talent with that required
  • A clear understanding of objectives and ground realities including clear and potential opportunities and risks
  • Periodic evaluation and course correction
  • Proper understanding about how it will benefit the customer and the company

One must understand that all of this is possible in the light of the three classic constraints of time, cost and scope.

A Business Case aims to address the above issue by giving clear and precise answers for questions such as:

  1. What is it – is it possible to implement without shaking the system
  2. For whom is it- how will stakeholders benefit from it. This also involves the company along with the key beneficiaries – the customers.
  3. How will it be done- do we have a concrete plan and have we preempted the pros and cons. One must ensure that what we’re set to do has not already been done and that all other options have already been tapped.
  4. In how much time- will it be reasonable time within which the project will be drafted and implemented as per the plan.
  5. How will it benefit- to all those involved by adding value. At this point, you answer the ‘Why’ part of the case and others can intervene if they feel it does not justify the resources being utilized. It always helps to plug in gaps at the beginning rather than later.
  6. What will be the cost- are the expenses justified through the enhanced returns- either monetarily or through enhanced customer satisfaction, increased market share and the like
  7. What will be the outcome – will it better our current way of functioning
  8. How will it add value – to the company and also to the stakeholders as compared to what and how it is presently being done
  9. Who will be responsible for the same – the team behind the implementation and their level of dedication (of course this can only be perceived and not quantified)

A project is a solution to some current or potential problem or unmet need. It is a known fact that most projects fail because they lack accuracy in the form of answers to the above questions.

So right from the time you present the Business Case to the time you evaluate its implementation, you move from answering “what do you want to do and how” to “Have you justifiably achieved what you wanted to do by utilizing the time and resources required for it”.

Though the two questions seem a logical extension of one another, it takes accountability and planning to an all-new level in doing so.

Building A Good Business Case

As we saw above, a Business Case is not a new proposition but a requirement to better an aspect of an existing business. From my experience, I put forth the following steps in preparing a strong Business Case that has full potential to serve its purpose-

  • Be clear about the objective– At the outset, one must be clear about what is it that you intend to propose. Then come the allies in the form of opportunity it presents to better the existing way of function for the company. What exactly does the business need and what is required to address that unmet need forms the foundation of your document over which the whole structure can be built.
  • Take stock of options already tracked – don’t miss out work that has already been done and incorporate the lessons learned from it. It even serves to highlight the need in the light of the work already done and the need for a better alternative to achieve the objective. Not taking stock of alternatives leaves your case weak because unless you convincingly rule out other available options, you cannot be convinced about the workability of the one in your hand.
  • Back it with data- Nothing works better than hard core data, information and facts to back your case. Always be armed with data that can convince anyone about the need for and the benefit of implementing a project. Make sure your data is authentic, relevant and updated. Also, analyze data and present using graphs, charts and diagrams so that it becomes all the more convincing.

Core Components of a Business Case

Do ensure you have the following in place before you begin:

  1. Define the project in precise terms. That sets the ball rolling clear and sharp
  2. The objective of the project
  • The scope for launching it
  1. Data and information to support your case
  2. Criteria and requirements gathered from all stakeholders to meet the expectations
  3. Plan in detail
  • Estimated Cost and how you intend to use it
  • Risk analysis
  1. SWOT analysis
  2. Timeline in which you intend to roll out and reach completion
  3. Governance issues as to who will be responsible for what and how
  • Scope for Course correction
  • Tracking progress and mechanisms to check

In spite of taking all necessary precautions and being fully armed with data and a plan for implementation, not all Business Cases see the light of the day. Many don’t even stand a chance at getting approved and few more just wither away in execution stage. This happens because the whole premise of a Business case is fraught with its own challenges.

Challenges In Developing A Good Business Case

  1. Not having a clear objective at hand. Many projects and concepts are too lofty to be actually implemented, forget their outcomes. A wish or desire, a temporary need or a fleeting problem cannot qualify to become a full fledged Business Case. One must understand that a Business Case if meant to solve a real problem or meet an unmet real and present need in the existing business.
  2. Too long a timeframe- projects and processes that run for too long bear the risk of becoming a burden, both financially and also in terms of execution. They also lose track of their viability and relevance in the first place. Companies can barely sustain lengthy projects that cannot achieve promised timelines as they eat away on precious resources, which would otherwise be allocated to more meritorious ones.
  3. Lack of clarity about roles – all work is inherently done by humans, especially the planning and execution part of it. Not having clearly demarcated roles, responsibilities and accountability built into the project means that there’s no one to lead and solve problems mid-way. It also runs the risk of demotivating or alienating team members.
  4. Faulty, incomplete or outdated data- data is powerful only when it is relevant and updated. Anything that is outdated or not relevant to the people and the business at hand becomes obsolete and is a waste of time, effort and money. Not to mention that it could lead to faulty outcomes if you base your project on such data.
  5. Dwindling funds- too many projects fail to live up to fruition when funds that back them dwindle, either eating away on allocation or drying up from the company itself. Not getting the much needed lifeline means that your project can no longer be sustained.
  6. Lack of standardization – whether in analyzing data, comparing likes to likes and likes, quality issues or benchmarking. This makes it difficult to evaluate progress as also to ascertain outcomes.


Addressing Challenges While Building a Business Case

The only way to address challenges, whether preempted or the ones you encounter mid-way, is to be prepared for any eventuality.

If you’re strong at the planning stage and have a clear objective and plan of execution in hand, with obvious benefits, having a reasonable timeframe and require funds that can be made available without causing a dent in the budget, then your project and in turn your Business Plan stands a chance of overcoming any odds.

Experts advise on having checking mechanisms in place, so you don’t miss the point of no return in case you need to.

A Business Case, unlike a Business Plan, can see several changes as it is being implemented, but the core objective and the structure must always remain intact.