What is Business Case? Mention uses of Business Case.

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Business Case

Marks: 5M

Year: May-12, Dec-13

  • A business case captures the reasoning for initiating a project or task. It is often presented in a well-structured written document, but may also sometimes come in the form of a short verbal argument or presentation.

  • The logic of the business case is that, whenever resources such as money or effort are consumed, they should be in support of a specific business need.

  • Business case depends on business attitude and business volume.

  • Business cases can range from comprehensive and highly structured, as required by formal project management methodologies, to informal and brief.

  • Information included in a formal business case could be the background of the project, the expected business benefits, the options considered, the expected costs of the project, a gap analysis and the expected risks.

    Reasons for creating a business case:

    Business cases are created to help decision-makers ensure that:

  • The proposed initiative will have value and relative priority compared to alternative initiatives based on the objectives and expected benefits laid out in the business case.

  • The performance indicators found in the business case are identified to be used for proactive realisation of the business and behavioural change.

    a Key elements of the Business Case report:

    A good business case report, which brings confidence and accountability into the field of making investment decisions, is a compilation of all information collected during enterprise analysis and the business case process. The key purpose is to provide evidence and justification for continuing with the investment proposition. Here is a recommended structure:

    1 Preface

    2 Table of Contents

    3 Executive Briefing

    1.1 Recommendation
    1.2 Summary of Results
    1.3 Decision to be Taken

    d Introduction

    i. Business Drivers

    ii. Scope

    iii. Financial Metrics

    e Analysis

    i. Assumptions

    ii. Cash Flow Statement (NPV)

    iii. Costs

    iv. Benefits

    v. Risk

    vi. Strategic Options

    vii. Opportunity Costs

    f Conclusion, Recommendation, and Next Steps

    g Appendix

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