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Main Purpose Of Business Case Plus 4 Key Areas Covered

Paul Naybour Paul Naybour

Published: 26th November 2015

Main purpose for the BC is justifying the need for the project against three vital things Cost, Benefits and Risks. BC includes studied options and identifies the preferred option which will form the project. BC enables Organisations to decide the viability of the project and take the go or no-go decision. BC is a vital document that will be used by the sponsor at the end of the project during the benefits realisation. For Example, BC is developed for a project for crossing a river.
Four Key areas covered in the BC are as follows:
1-Strategic case is one of the areas covered in the BC. It describes the project background, why it is needed and what are the problems / opportunities for which the project was commissioned. That is important and it gives general introduction to the project, what problems or opportunities it is commissioned for, and what are its surrounding circumstances. For example, project for crossing the river will be commissioned by the developers who will be building a new development on the other side of the river.
2-Options appraisal is another area covered in the BC. It includes study to all the possible options (including the option of doing nothing). Studied options are refined and all discarded except for the preferred option which will form the project and will move forward to the definition stage. For example, options for crossing the river are using ferry, building bridge or tunnel or using cable cars, preferred option is building a bridge.
3-Expected benefits is one key area covered in the BC. It includes identifying both financial and non-financial benefits that will be expected from the project. Benefits should be in agreement with the users’ requirements and have to go in line with the requirements management process. These will be key references to the sponsor at the end of the project at benefits realisation. For example, expected benefits from the project for crossing the river is providing short route between the city centre and the new development across the river which will encourage people to buy properties at the new development.
4-Commercial aspects is another key area covered in the business case. It includes high level cost estimates for works in the project, it also includes investment appraisal study and funding plan. That is important as will enable the sponsors to conduct a feasibility study and assess the viability of the project, and decide the go or no go for the project. For example, costs for the project of crossing the river are extremely high and cannot be justified against the gained benefits therefore the project will be cancelled.