The Business Case for Business Cases
Business cases are one of those artifacts that people understand and appreciate but do not always do. The good news is that they do not need to take a lot of time or be overly complex in order to be of value. To make the business case for business cases, I would like to address 1) Why writing Business Cases should be common organizational practice before initiating projects, 2) Who defines the business need, and 3) How Business Cases contribute to organizational success.
Why Business Cases
In order to meet its goals, an organization typically takes on many programs, projects, or other initiatives. At the end of the project, the organization expects to feel good about the investment made. The sentiment should be a resounding, “Yes, that was money well spent!” That will only be the understanding if the initiative helps the organization reach its vision, strategic direction, and business objectives.
Charters meet this need to some extent. However, once a charter is penned, the expense has already gone into prioritizing the initiative, assigning a sponsor, and finding resources to manage and deliver the project. In most organizations, these decisions involve meeting time with high-ranking (and expensive) resources.
Requiring a business case as an input to a charter mitigates the expense of those decisions as well as the risk of chartering ill-conceived projects. I recall an environment in which I was required to present a business case for any idea I had for a new initiative. This was helpful to me by forcing me to think through and do a bit of groundwork prior to a project consuming more organizational resources, and it was helpful to the organization by providing input into prioritizing initiatives.
The anchor for a business case is the definition of the business need. That is, what is the problem or opportunity that is presented to the organization? Whether the project is likely to use an agile or adaptive or more traditional, waterfall approach, this needs to be clearly articulated before anyone can determine with any confidence whether or not applying organizational resources to a project makes sense.
Who Defines the Business Need?
Ask a business analyst (BA) who should define the business need and you might hear that it is the BA’s role to do so. After all, the business need defines the business problem or opportunity, which BAs have to understand in order to recommend appropriate solutions. BAs know that all requirements should trace to the business need, so it is important to spend the necessary time to truly understand it.
Ask a project manager (PM) the same question and they may say the same thing – that they are the ones who should determine the business problem or opportunity. They know their project will not succeed if it does not help support organizational goals and if it does not solve real business problems. The business need becomes the project’s foundation. Just as requirements link to the business problems, so do each project objective and deliverable. Since PMs are accountable for meeting the project’s objectives, many PMs want a part in defining the business need.
So, who should define the business need? The PMs, because they have to meet the project objectives? The BAs because they have to define the solution requirements? Best practice suggests that the person or group requesting the project should define the business need, and that person or group needs to be high enough in the organization to sell the idea, to get the organization enthusiastic enough about the endeavor to fund and prioritize it, and to rally the necessary organizational resources. This responsibility is best handled by a sponsor, steering committee, regulatory or compliance body, or a fairly high-level Subject Matter Expert (SME). Project managers and business analysts are most effective when they are neutral facilitators, not owners. Both roles need to make recommendations and can certainly recommend which projects to undertake, but they are not the ultimate decision-makers. They work with and advise decision-makers. When PMs and BAs move away from advising and into decision-making, facilitating and advising become far more difficult.
How Business Cases Contribute to Organizational Success
A business case does not need to be formal or heavy. A lightweight document or even just the intellectual exercise and discussion to provide clarity around the key components of a solid business case will yield better outcomes for organizational investments. Here’s how:
- The business case illuminates the reason for an investment before time (and the related money) is spent sanctioning a project and assigning resources.
- Business case authors have to think through options for addressing a business need. Chartering a project is essential, but charters assume a particular approach to solving a problem is the right or only option. The nature of the business case is to explore options.
- Construction of a business case requires feasibility In my experience, this is one of the most important elements. I can come up with some pretty great ideas…some pretty great, unrealistic ideas! Organizational time is not well spent deliberating about ideas that are not feasible and business cases help preclude that from happening.
- The work that goes into assessing high-level cost, time, and other resources gets leveraged when developing the charter and in early planning.
- Before applying resources to initiating a project, business cases are a collaborative opportunity to confirm the organization’s vision and strategic objectives.
Having to think through whether an idea is worth pursuing is the essence of a business case. Creating a habit around developing a good, well-scaled business case stands to benefit everyone in an organization. Consider your project environment and stakeholders and make it easy to develop and understand a business case.
Everyone involved in organizational initiatives should know how to answer the question, “Why does it make sense for us to invest our resources in this project?” A business case provides the answer.
Andrea Brockmeier, PMP, CSM, PMI-PBA, BRMP is the Director of Project Management for Watermark Learning. Andrea is an experienced trainer, facilitator, speaker, and project manager, with over 25 years of business experience. Andrea oversees certification and skills development curriculum in project management, business analysis, and leadership. She has been a speaker at IIBA® and PMI® conferences and is an active volunteer. She enjoys practicing what she teaches and has a steady stream of projects that she manages. Andrea is highly committed to partnering with her clients through projects, consulting, and training, and seeks to make every engagement enjoyable as well as valuable.