Financial modelling terms explained

Business Case Development

Learn how to create a compelling business case with this comprehensive guide.

Developing a business case is a crucial step in the project management process. It serves as a strategic tool that outlines the justification for undertaking a project or programme. It provides a framework for planning and management of the project, while ensuring the project is continually aligned with business objectives.

The business case documents the justification for the undertaking of a project based on the estimated cost of development and implementation against the risks and the anticipated business benefits and savings to be gained.

Understanding Business Case Development

Business case development is a process by which an organization evaluates the feasibility of a project. It involves identifying the business needs, assessing the available options, analyzing the risks and benefits, and presenting a compelling case to stakeholders.

The process begins with identifying a business problem or opportunity. This could be anything from improving a current process, launching a new product, or entering a new market.

The next step is to assess the available options to address the problem or opportunity. This involves conducting a feasibility study to determine the viability of each option.

Once the options have been assessed, the next step is to analyze the risks and benefits associated with each option. This involves conducting a risk assessment and a cost-benefit analysis.

Identifying Business Needs

Identifying business needs is the first step in the business case development process. This involves understanding the organization's strategic objectives and identifying any gaps or opportunities that exist.

This step requires a deep understanding of the organization's business model, market trends, and competitive landscape. It also involves engaging with stakeholders to understand their needs and expectations.

Once the business needs have been identified, they should be clearly articulated in the business case. This will help to ensure that the project is aligned with the organization's strategic objectives.

Assessing Available Options

Once the business needs have been identified, the next step is to assess the available options to address these needs. This involves conducting a feasibility study to determine the viability of each option.

The feasibility study should consider factors such as cost, time, resources, and technical feasibility. It should also consider the potential impact on the organization's operations and strategic objectives.

Once the feasibility study has been completed, the options should be ranked based on their viability and potential impact. This will help to inform the decision-making process.

Analyzing Risks and Benefits

The next step in the business case development process is to analyze the risks and benefits associated with each option. This involves conducting a risk assessment and a cost-benefit analysis.

The risk assessment should identify any potential risks associated with each option and assess their potential impact. This could include risks related to cost, time, resources, and technical feasibility.

The cost-benefit analysis should compare the costs associated with each option against the potential benefits. This will help to determine the return on investment (ROI) for each option.

Presenting the Business Case

Once the business case has been developed, the next step is to present it to the stakeholders. This involves clearly articulating the business needs, the available options, the risks and benefits, and the recommended solution.

The presentation should be clear, concise, and compelling. It should highlight the strategic alignment of the project, the potential benefits, and the ROI.

The presentation should also address any potential concerns or objections from the stakeholders. This could include addressing any risks, providing evidence to support the feasibility of the solution, and demonstrating the potential impact on the organization's operations and strategic objectives.

Once the business case has been presented, it should be reviewed and approved by the stakeholders. This will ensure that the project is aligned with the organization's strategic objectives and has the support of the stakeholders.

Conclusion

Business case development is a critical process in project management. It provides a strategic framework for planning and managing projects, while ensuring alignment with business objectives.

By understanding the business needs, assessing the available options, analyzing the risks and benefits, and presenting a compelling case, organizations can ensure that their projects deliver value and achieve their strategic objectives.

With a well-developed business case, organizations can make informed decisions, mitigate risks, and maximize the return on their investment.

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