The case for business cases - What’s the business case for doing a business case?

Looking through the white papers and other material we produce on the subject you may get the feeling that our approach to business case development would take a long time and expend large sums of money. However, as we have had more and more experience, not just at the front end of projects but as they are delivered, our opinion is quite the reverse.

Particularly over the last year, we have seen large scale programmes disbanded in to smaller, related initiatives. These have often been more successful because the process of gaining investment approval is quicker and easier, and the projects themselves deliver their intended benefits much faster. Similarly, we have seen large scale programmes flounder as the process of getting to business case approval takes many months and large sums of money. In some cases we have seen in excess of £1 million spent on business case development alone.

Firstly, there is no magic solution. Often, as with problems in any change programme, there are organisational pressures that simply cannot be addressed within the scope of one initiative. Large organisations can have tortuous budgetary approval processes which may force a business case to be developed in a non-ideal way. Business cases become an obstacle to be overcome rather than being seen as a valuable part of the project lifecycle.

We believe that the time spent doing a business case is not only necessary, but can be immeasurably useful at focussing the direction of later stages of project inception. They key is to focus attention on the areas that really matter and will maximise the chances of project success.

It is quite often the sign-off authorities themselves who are the easiest to convince in terms of circumventing needless work. What they will need is up-front agreement on what you are, and aren't going to do. Make sure the arguments are backed up by facts, risk analysis and documentary evidence. Then, timebox the whole business case process with a review period well in advance of the deadline, and ensure the budgetary sign-off authority has clear visibility of progress at that stage to make a call on how to proceed.

If you do have flexibility in the early stages of business case development, a focus on a few central themes can save a great deal of time. There are always going to be unknowns, and the temptation is to do a great deal of analysis at the early stages to minimise the uncertainty. This can often be wasted, or can miss the point. We have seen projects where many man months are spent analysing whether a cost is £90K or £100K, when elsewhere in the programme there are ~1 million+ uncertainties which have no more analysis spent on them.

One reason for this is the split of programmes into different projects at an early stage, with appointed managers for each. Consider whether this is premature, or whether the split of resource is reasonable. For example, a programme of 4 different projects may often have 4 respective project managers appointed at an early stage of inception, yet it is very rare for the split of time, effort and risk of these projects to be equal. Even if the projects end up identically sized, the chances are one will be much more understood "business as usual" effort than the others.

It's very difficult to provide useful advice at such a generic level, particularly in a short article on a web site, but some quick pointers to consider are:

  • Get executive buy-in to the business case approach. Justify what you are and aren't going to do up-front. Understand up-front the success (and failure) criteria of the business case development itself.
  • Focus on a few central themes in the business case, justifying why they are the key cost and benefit areas. These central themes should include the majority of cost and benefit, and areas of highest risk. Justify exceptions from the case, highlighting expected risks and issues. Get agreement to these exceptions as early as possible. We have a few ideas about what your themes should be as well - clearly these are dependant on your project, but a good rule of thumb is to focus the benefits side on cost reduction/avoidance first (if possible). Revenue generation benefits should be clearly highlighted as resultant from this project (as opposed to other marketing and sales initiatives going on), and income protection benefits are notoriously difficult to prove.
  • Time-box business case development. Set a review date well within your limits to review with the sign-off authority what is and isn't achievable.
  • Phase your programme to initiate work up-front, possibly while the inception of other areas is still being worked on. However, ensure the areas being initiated are those that are clearly understood, and ramp up the minimal resource in that area to get productive. Time and again we see whole project teams arriving with little direction of what they should be doing at that stage.
  • Continually revisit the business case during the project, focussing as much on additional benefits identified as costs.

Good luck with your own business case development, and of course let us know if you could do with some support from us. Hopefully, with a little up-front scope restriction on the business case itself, and focus on the areas that matter, your project will get off the ground quicker, and ultimately prove more successful.

And even if you never did manage to minimise the up-front effort, congratulations at least on trying to do a business case at all. You'd be amazed at the projects that get started without one - and end without one almost as quickly.