HOW TO DEVELOP A BUSINESS CASE?

Most organizations decide to fund a project because obviously, they anticipate a return on the investment (ROI). A business case describes this anticipated return. For a BA to know a project, he or she must understand the business case. Sometimes the BA will be asked to develop the business case as the first task of a project or before a project has been approved. Understanding the importance of developing business case is a key business analysis skill.

Have you ever tried to convince your spouse that you should get a new car? Why did you decide to buy a new pair of shoes? When you are working to persuade someone (even yourself) to take action, you are building acase.

A business case is an explanation of why the organization has decided to go with a project. The wordcase comes from the legal profession and means an argument for or against something: “we are building a case for…”, Business cases which depict the value of an endeavor.

The mechanisms to evaluate business case are:

Feasibility Study: A feasibility study determines the practicability and workability of a potential solution before a project is approved. It answers the question: “Can it be done?”

Cost/benefit analysis: This activity focuses on financial analysis of the potential solution, using economic calculations to project the potential return on investment and payback period. It answers the questions, “what are the costs VS benefits of doing it?” Some costs and benefits are not easily measurable. Benefits like goodwill and positive public relations are referred to as intangible. Costs that are easily measured are referred to as tangible.

                Building a business case involves bringing together research, logical reasoning, and financial estimates. In addition, business case development requires creativity and big picture thinking.

Bottom line is,Business case development and cost/benefit analysis are important skills for business analysis professionals to develop early in their careers.