Developing Guidance on when to use a Business Cases

What is a Business Case?

A Business Case is a proposal to invest significant resource in an undertaking (or change) that will provide specific benefits to the owning organisation. In doing so, the business case must provide fundamental information to decision makers to ensure that the proposal is:

affordable

deliverable and that the inherent risks have been considered and analysed

the right proposal to invest effort or resource in at the time, and that it will deliver value (business benefit) for the resource it will consume

A Business Cases should define the underlying Business need or opportunity and potential options, together with ‘deliverability’ of those options in line with Business needs. It also provides the fundamental platform for defining the key aims (objectives) of a project and is a crucial input to the project management process. Therefore, a Business cases itself has three key objectives:

to define specific Business objectives and proposed option / proposal, and the tangible benefits this will bring

to ensure that the proposal is inherently ‘deliverable’ within the timescales and broad resources estimated

to provide the input to the decision making process that will confirm Business commitment to the proposal or otherwise.

When to or not to develop a Business Case?

In most Businesses, projects often fall into three categories:

Strategic: e.g. opening up new business lines or major new market opportunities

Tactical: to deliver / maintain core business

Operational: delivering or maintaining core capability.

Business Cases should always be prepared for all category 1 & 2 projects, and usually for category 3. In category 3, where there are few decisions to be made, a full business case may not be required, however, the objectives of any project must always be recorded and validated with stakeholders as part of effective project management.

It is important to provide guidance in any business (by providing simple 'rules') for when a business case is required, otherwise a vacuum often occurs where staff are simply unsure when one is needed. The following is very simple but could at least be a starting point for doing this in your business:

Highly likely to require a full Business Case:	Less likely to require a full Business Case:
New business process / system	Minor system / process change
Major change to Business Process	Simple new report
Significant investment	Maintenance task
Asset procurement / development
Change in key business practice

Other factors that also influence whether a Business Case is required or beneficial / required:

1. degree of importance to the Business
2. level of effort involved in delivering the solution inherent in the business case
3. level of risk required in the proposal / solution / or benefits
4. quantity of benefit in the proposal.

Magdalen Centre
Oxford Science Park
Oxford, OX4 4GA
England, UK

Tel : +44 (0)1865 784040
Fax: +44 (0)1865 784042
Email