Business case. Evaluate the benefits, costs and risks of a project.
What are business cases? What advantages do they offer? And how is the associated document created?
What is a business case?
At the beginning of every project, there is the why. Why should the business carry out a new project? What benefits can be gained from it? And are the costs worthwhile? A business case tries to answer these questions. It argues why the project would be beneficial, which costs, benefits and risks the new investment would have. The benefit can be financial, but it can also consider other criteria such as workload or increased satisfaction. A business case supports itself on figures for this argument, for example, the expected cost reduction in a percentage or a cash flow account. The decision makers can then approve or reject the project proposal.
Questions that a business case answers:
- Why should we carry out the project? What happens if we don’t?
- What economic benefits could we achieve for the organization?
- What are the risks?
- How high is the potential cost?
- How long will the project take?
Business case according to PRINCE2
The business case can serve not only as the foundation for the approval of a project, but also as an ongoing commercial justification. This is how it is stipulated by the project management method PRINCE2. Here, the business case is revised in regular intervals and, based on this information, it is checked whether the project is still worthwhile up to the current state. This way stakeholders and sponsors can always get current information on the state of the project.
A business case according to PRINCE2 evaluates whether a project is:
- achievable and
- a worthwhile investment.