Purpose of the business case
The business case provides a justification for undertaking the project, providing a rationale for this solution. It assesses the benefits, cost, and risks, as well as alternative options and competing demands for scarce resource and budget.
Upon approval by decision makers, the business case provides a forecast, albeit uncertain of project outcomes and contribution to the projected benefits set out in the business case. This uncertainty decreases as the project is implemented, during which the business case must be updated to reflect current knowledge.
And when the project is complete, an assessment can be made as to how accurate the original projections were and the degree to which benefits were achieved. This is essential in order to ensure effective transition to operations and to learn lessons for the development of future business cases.
Prior to business case approval
Prior to approval, the business case should include details of how benefits will be measured.
It can do this by addressing the following:
1.Identification of a benefits owner with accountability for measuring the benefits after implementation.
2.The expected period over which the benefits will be realised.
3.The key performance indicators (KPI's) for measuring the benefits.
4.Processes that need to be in place for measuring the benefits.
5.The outcomes achieved as a result.
A benefits map such as shown in figure 1.0 below can be a useful technique for visually setting out the KPI's, measures and desired outcomes.Remember that additional actions or reporting may need to be implemented in order to obtain the measures.
Figure 1.0 Benefits Map Example
The financial benefits table example as shown below in table 1.0 can be used to agree who should be responsible for checking the benefits implementation and working out how to measure them. This should be supported by quantified data where possible.
Table 1.0 Financial Benefits Table Example
In addition to the benefit owner, specific roles, and responsibilities in terms of benefit measurement may be set out, as well as the processes required to measure them.
Checkpoints after approval and during implementation
Once the benefits case is approved there should be regular check points throughout the project to ensure it is still on track to meet these benefits.There are many reasons, both internal and external, why the business case may be diluted and not worthwhile anymore. Early change in direction or even project termination should then be considered.
Changes to any of the following could lead to re-assessment:
Appropriate checkpoints might be prior to starting a new phase of a project or after assessing change requests.
Review after project completion
After completion there should be an assessment of outcomes against original projections. If the benefits expected were not achieved, it is important to understand why. Such review allows you to improve future business cases, determine whether additional business readiness activities should be implemented, and improve decision making.
Here are some scenarios I have come across where lessons were learned from post-project review, and which demonstrate its importance.
This article demonstrates the importance of reviewing the business case throughout the lifecycle of the project and after implementation. A business case is a prediction of the future which is not certain. Understanding whether a project is meeting expectations enables it to be stopped and money spent elsewhere if necessary. Knowledge of a project's success or failure can also improve decision making from the lessons learned.
Helen Winter is a project manager and business architect with over a decade of experience managing IT and business change projects. She is the author of Business Analyst Handbook (Kogan Page, 2017) and writes the online magazine Business Bullet
In February 2021 Helen provided a PMI UK lunch-and-learn webinar titled Best Practice Guidelines and Templates for Business Cases. The recording, presentation and Mentimeter results can be found here