How to write an accurate business case
You want to invest, but you don’t know how much to invest, what to invest in or when to invest. In times like this, we turn to a business case.
We have both written and reviewed business cases, and it is never easy to be certain of the right approach to a business case and they are always easier to poke holes in than write. They are essentially a way of reducing the uncertainty when making a guess or a bet, rarely do we know all the potential factors that will affect the profit or costs of implementing a new project.
There are many different variations on a business case, but in brief, a business case should include:
- Your business problem
- The benefits and risks of any options
- The return on investment
- A final recommendation
What your business case shouldn’t be is war and peace.
Make a list and check it twice
The number one error in business cases is to underestimate your costs. When thinking through your project, write down everything that comes to mind that might involve a cost, try running it past other people, and try sleeping on it. Review it over and over. It’s so common to not consider something that seems all too obvious when it crops up during the project.
Consider an optimism bias
If your investment is going to involve a long or complex implementation, consider adding an optimisation bias. Based on research and guidance from the HM Treasury Green book, It’s likely the project will cost 30-40% more in resources than your estimate. Humans are bad at estimates, it’s just a fact.
Consider the risks and mitigations
Think through the risks that might occur at each stage of your project, what the impact of the risk occurring would be and what mitigations you might need.
Look at alternatives
It’s always useful to have a counterpoint to your ideas. What else can you do with that money, is your plan really the best one?
Once you’ve written your business case ask people to have a look at it for you. Can they spot anything you’ve missed; does it make sense to them? The extra time you spend preparing now can save you pain later.
This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated to us.