A documented business case can help your organisation to make savvy decisions about whether to start, continue, or stop specific IT projects. However, some IT departments struggle to develop high-quality business cases. In this article, we’ll explore the key attributes of a strong IT business case that can help justify your next technology project.
What is a business case?
First, let’s start with the basics. Your business case serves as the initial documented justification for the project (the baseline) but it must also be kept up to date. As the project progresses, it is likely to face challenges and require adjustments. The viability of the project must be continually evaluated, typically following significant decisions, through updated versions of the business case.
But don’t lose that baseline business case! Comparing where a project ended up versus how it was originally conceived can offer a lot of insight into how your organisation manages change.
Generally, a business case is used to make a compelling argument for why a specific project, product, or investment should be approved. Your business case should include detailed information about the problem or opportunity, as well as potential solutions, projected costs, benefits, risks, and the expected return on investment.
The goal of a business case is to provide decision-makers with the information they need to decide whether a specific project should go ahead. A well-written business case can help to secure funding, resources, and support for a proposed venture.
A well-constructed business case is also critical for securing buy-in from other stakeholders, including frontline staff, investors, regulators, and so forth. It helps ensure that everyone is aligned and understands the purpose, scope, and expected outcomes of a given project. In short, a compelling business case is an essential tool for any company looking to evolve, grow, and succeed.
What are the critical elements of an IT business case?
Putting together a compelling business case should be a comprehensive process that addresses several critical aspects. Let’s take a closer look at the steps you’ll need to take so that your business case is accurate and useful.
Formulate a problem statement:
Your business case should start with a clear statement of the problem or opportunity that needs to be addressed. This will help to ensure that everyone is on the same page and understands the purpose of the proposed IT project.
Engage key stakeholders:
As you develop your business case, you should actively engage with various stakeholders, including internal and external customers, impacted business units, and the broader IT team within your organisation. When you’re liaising with each stakeholder group, write a brief impact assessment to articulate the advantages and disadvantages that affect them.
Ensure there is business alignment:
Your business case should demonstrate how a proposed IT project aligns with wider organisational goals and objectives. You’ll also need to demonstrate how your planned project fits within or extends the business’ current technology capabilities whilst aligning to your organisation’s enterprise architecture. Lastly, you should identify any negative impacts to your company that may arise as a result of the project going ahead.
Identify benefits and metrics:
When preparing a business case, you should contemplate how the benefits of a proposed project will be measured – do this as early as possible. When a project is particularly complex, a ‘benefits realisation plan’ is too often deferred until well into the execution phase. Instead, your business case should clearly highlight the benefits that a project will deliver, and provide a metric on how these outcomes will be measured.
Conduct a risk analysis:
Risk assessment and risk management are essential tools in project management. However, many business cases don’t take risks into account until a new project has already been initiated. By identifying and evaluating key risks within your business case, potential hazards can be mitigated before your IT project gets too far underway.
Offer different options:
While many business cases present only one proposed solution, the gold standard is to analyse three or more viable options, including the impact of a “do nothing” option. This not only shows that thorough strategic thinking has been performed – it also allows decision-makers to consider other ways a given problem might be solved. Use the executive summary of your business case to highlight which of the three options seems to be preferable or recommended, and why.
Test the implementation process:
Your business case should include a high-level blueprint or roadmap for implementation. It’s important to stress-test this implementation process, ideally in a war-gaming style session, to ensure your approach can withstand any potential problems that may arise. Testing your proposed implementation process can save time and money down the line. Consider running a pre-mortem to consider what could happen in the project – both positive and negative – and then make a plan to address these before you start.
Take a holistic view:
The best business cases consider the people, processes, and holistic organisational issues related to successful project delivery. There should be no technology projects that exist in a silo. The best IT projects influence and improve overall business capabilities and align with the organisation’s broader business strategy.
Consider portfolio impacts:
Organisations with a portfolio of concurrent IT projects may have a higher risk of one-off failure. Therefore, you should consider the impact and dependencies your proposed project may have on the rest of your organisational portfolio. Your business case may need to reflect new timelines and budgets to ensure that each distinct project is completed successfully.
Make an environmental analysis:
Naturally, your business case should also consider the current environment that a proposed project will take place within. This may include Political, Economic, Social, Technological, Environmental, and Legal factors. Consider using these as inputs for your risk analysis.
Perform solid financial analysis:
A solid financial analysis should also be included within your business case. You should delve into the total costs involved, as well as the financial gains presented by your project. This analysis should be risk-adjusted and include a sensitivity analysis to ensure that both internal and external factors that influence costs are understood.
Don’t forget a governance model:
Some professionals believe that governance considerations can wait until the latter stages of a new project. However, covering general governance arrangements in your business case can help to anticipate and counteract any potential roadblocks and ensure the right level of executive sponsorship and stakeholder buy-in.
What happens to your business case as projects commence?
Starting a project usually means we have a general idea of what the end result will be. As your project gets underway though, your business case may need to accommodate new changes due to time, cost, and other constraints.
Remember that using your business case to record any changing factors will help keep the project on track. Adding real-time updates also helps project managers to understand how the project must be adapted to meet its original goals. Your business case is a living, breathing document that can be referred to over the life of the project.
What should you take away from this article?
A business case is a crucial document for IT professionals. Use a business case to outline proposed solutions to the problem or opportunity the organisation is evaluating. Your business case should help your IT department to articulate anticipated outcomes and to justify the investment of resources – including time, money, and expertise.
Your business case will become a tool for making informed decisions and ensuring that resources are allocated in a manner that delivers the greatest value to the business. A well-crafted business case provides a roadmap for new IT projects and will help ensure that your team remains on track to deliver the intended results.