Strategies for preparing robust business cases

This post is a high-level guide for those who need to obtain approval for initiatives that will contribute to the future success of your organisation.

In today’s decision-making environment it is important to present a compelling proposition and to enlist a stakeholder alliance that supports this as a priority. These strategies assist in achieving both of these outcomes.

It is a guide to making a business case succeed.

The insights I offer are based on specific examples from research and project practices we have been involved in across the world, which I have generalised here for communication purposes. 

Let’s start at the beginning – What is a business case?

A business case is a justification for a project.

This justification is a tool to help decision-makers allocate limited resources in the best way to meet organisational or community needs.

To do this, a business case outlines the reasons a particular project, policy, strategy, or design is needed – and why the proposed solution should be approved or funded. It ultimately addresses the question of whether the benefits of the project exceed the costs or risks of implementing it.

So what are some of the key challenges?

First, the problem being solved is often based on the combined effects of multiple future scenarios, with associated uncertainty surrounding the impacts. If there is no agreement on the problems and opportunities, there can be no business case.

Second, business cases are usually multi-dimensional and provide several benefits. Don’t be led down a path of a business case based on a purely information systems approach rather than focusing on the optimal solution to a specific problem. You need to create community-wide benefits; that can be measured and valued.

Third, the costs are short-term but the benefits are long-term. Innovation & Transformation Programs create benefits that are the sum of many incremental actions and projects. This means that there can be a lag between investment in an individual project and the realisation of these benefits. The challenge lies in framing today’s expenditure as an investment in the future rather than as an inefficiency.

From challenges to strategies: preparing a robust business case

We’ve translated these challenges into three key risks to a business case and identified strategies in response.

01 – Know the real decision-maker

The business case is not written for you. Understand the audience that you are pitching to, and what will influence their decision.

Clarify who the business case is for, and what their needs are. To succeed, you will need to demonstrate the project’s relevance to them. Be aware that their understanding of what an Innovation & Transformation Program is may differ from your own; you need to understand their criteria when assessing a business case.

Identify the decision-maker by establishing who has the power to deliver what you need.

• For this group, map your understanding of their drivers, values, and beliefs; and incorporate these needs in your business case.
• Similarly, understand who has an influence on these decision-makers. Understand that some will be more influential than others.

02 – Frame your business case within a broader context, to make the drivers for change more compelling

Each area of your organisation needs to establish its own context for the business case. Communicating how the project fits within a larger context will link it to external drivers for change which are more likely to resonate with a wider audience.

Link your project to an outcome that others need to deliver. This will build support for your project.

Your aim is to show that this project can help others to deliver the outcomes they are accountable for.

Each business unit should define its own context for change, based on what the popular issues are.

This helps you to understand what the next step is.

• Link the business case to your organisation’s policy and strategy initiatives. Ask yourself:

“What benefits and contributions can this project deliver in terms of meeting these policies and strategies?”

03 – Have a “community” engagement strategy

Decision-makers will ask who supports the business case and will heed the opinion of those they trust. Develop a community engagement strategy to build this support.

• A successful business case garners the support of all community groups in your organisation.
• A community strategy will convey the key messages from your business case.
• The aim is to build a common vision in collaboration with these stakeholders. 
• A common vision is one that ensures a common orientation for all the different portfolio areas.

Determine how you will engage these stakeholders, and whether you need their input early to help shape the messages. Visualise the positive changes of your proposal and communicate them to identified beneficiaries.

• Use plain English explanations of key concepts and the types of assets that you are proposing.
• Explain how the systems work now and what will be different in the future.

04 – Build a team of advocates for your project

A good business case is evidence-based and has strong stakeholder support. Getting buy-in can be time-consuming but is worthwhile.

Decision-makers are more inclined to support a business case that is jointly proposed by an alliance of stakeholders, particularly those who will be instrumental in delivering the project.

Similarly, decision-makers will be more supportive if they can see that there is input from others in the organisation’s community, representing a cross-section of everyone.

• Frame your project within the broader organisational objectives.
• Understand the barriers to buy-in. These might include the power of vested interests against change or elite opinion. 

05 – Let the base case paint a picture of the likely future, not a picture of today

All business cases need a “business-as-usual” scenario as a comparison for the proposed project.

But as your benchmark, think about the future result of business-as-usual.

The long-term nature of the investment means that your base case should compare future A with future B, not future A with today.

Paint a picture of the organisation in “X” years’ time if current policies and practices were continued, including the good and the bad. Use this future state as your point of reference to articulate and evaluate the benefits of your proposal; identify the additional (not total) benefits or reduction in the impact that your project will provide beyond this business-as-usual scenario.

06 – Scale: tell the story of the individual business units and the organisation-wide benefits

Make the business case relevant for everyone – both in the immediate business unit and for other communities across the organisation who are impacted by these initiatives.

A successful business case is one that clearly identifies tangible benefits. Be aware, however, that the needs, benefits, and impacts may be far-reaching: either long-term or widely distributed.

07 – Valuing costs and benefits

A business case will present costs and benefits across a broad range of outcomes:

• All business cases will include an assessment of the size of costs and benefits of a project. This is fundamental to the decision of whether to approve or reject the project.

• Valuation is the exercise of determining how important the expected changes are. Monetary valuation is most usual, but other approaches may assist in developing conclusions about the importance of different benefits.
• Valuation will focus on the elements of your proposal that vary across the options, ignoring elements that are common. One aim is to differentiate or rank options for decision-makers.
• Identify and assess the benefits from the perspective of end-users.

Identifying the benefits:

• Understanding aspirations for all business units will drive the identification and valuation of benefits and identify direct beneficiaries.
• Consider how your target audience would decide whether an investment in an Innovation / Transformation Program is worthwhile. Can you explain these criteria? Does this project meet these criteria?
• Decide which benefits to include by engaging with your community and your decision-makers. This makes the valuation activity a two-step process of first agreeing on which benefits to include and secondly describing their importance.

08 – Distributed impacts: who benefits and who pays?

It is likely that the project will include a mixture of benefits that are short- and long-term, as well as a mix of stakeholders, some of whom will pay while others will benefit. A business case based on a whole of business community-level assessment can reconcile these aspects.

Many of the benefits of an Innovation / Transformation Program are long-term — they are based on a projection of needs into the future. In contrast, most costs are short-term. The business case needs to address the question of who pays or takes the risk for these long-term benefits.

• Identify who bears the risk and who has to pay, and include them as an audience for the business case.
• Present a business case that considers whole-of-business-community cost rather than a single business unit cost (acknowledging that individual business units still need to understand a business case from their own perspective — but the community-level case may also be compelling).
• A business case is often targeted at those who pay the capital costs, but equally important are those who inherit the assets and risk: the long-term effects or benefits. 

09 – Address the counter-argument

Ensure that you understand – and can respond to – any argument that your project is not needed.

It is likely that there is a popular counter-argument (often quite rational) against the change or project that you are suggesting. 

• Anticipate, identify, and navigate these counter-arguments.
• Approaches to address them will be informed by the strategies we outlined above.
• Develop a business case that is flexible enough to respond to changing agendas; don’t lock yourself into a position; be ready to reframe your message into a new narrative.

10 – Funding base

Link your business case – fully or in part – to an agreed funding source.

A business case that is linked to a funding commitment is more likely to be approved.

• Identify all parts of your organisation that can / should commit core funding as a base for action.
• Make links to sustainable funding sources within your organisation so that the change becomes core business.

A final thought… The Foundation for Project Success

Projects are driven by their Business Cases. This goal outweighs technical objectives, which are merely there to deliver value to the organisation. 

Developing and maintaining a solid Business Case will help ensure that 

• All parties will have a common understanding of the value the program is intended to produce; 
• The organisation will have a clear, ongoing basis for determining whether the program is worth continuing; 
• Resources are used effectively (on the right projects within the program ); 
• Priorities are clearly established for the project manager and the organisation; and 
• There will be a clear basis (through continuous benefits review) for assessing project success. 

If a Business Case is planned and managed effectively, it dramatically increases the likelihood of the project’s success. Good luck!

About the Author

Jason Novobranec is Implementary’s Chief Operating Officer.

With over 20 years of Consulting, Program Management & Senior Leadership experience, Jason has delivered initiatives for large multi-national / multi-regional organisations as well as SME’s and is an expert in shaping solutions to fit a customer’s project needs.