Business case

1. HOW TO BUILD A
BUSINESS CASE
Annalisa Caponera
Photo:“Spirale”byMiaFelicitaBertelli

2. Summary
1. Definition and purpose
2. The journey to develop a
Business case
3. The Canadian Template
Flickr: “Iron Crystal” by Michael Dales,

3. Part 1
Definition
and
Purpose
Flickr: “Pen and Ink” by Heather,

4. A Business Case is...
“An assessment of the costs
and benefits associated with
a proposed initiative”
The Business Analysis Body of Knowledge®
Flickr:“Dictionary”bysAeroZar,

5. Purpose
Justify the project in terms of the value added to
the business:
[1] The Business Analysis Body of Knowledge®
1. as a result of the deployed
solution
2. as compared to the cost
to develop and operate
the solution[1]
Flickr:“Money!“byHansSplinter

6. Purpose also may[1]
 Include
 qualitative and quantitative benefits
 estimates of cost and time
 Present
 expected cash flow consequences
of the action over time
 the used methods for quantifying
benefits and costs.
[1] The Business Analysis Body of Knowledge®
Flickr: “Dictionary: time“ by Cat

7. It must be...
1. clear
2. accurate
3. realistic
4. credible
5. objective
6. tailored on the investor
goals
Photo by Flickr

8. And also it has to...
1. Respect the requirements
2. Quantify the value of
investment in term of cost
and benefits
3. Target the right goals
Photo by Flickr

9. Part 2
The journey to
develop a
Business Case
Flickr: “Pen and Ink” by Heather,

10. 4 stages of Knowledge
Understand the process and objectives
Gather the inputs
Do the
analysis
Tell the
story
Photo by Flickr

11. Understand the objectives
To transform the idea into a BC
formal document you need to
1. Find the executive
sponsor
2. Clarify what has to be
done
3. Make a plan
Flickr:“”Golflandstart”byToddDailey

12. Objectives follow people
 Identify Stakeholders
 Give them the right importance
with the RACI Matrix
Responsible
Accountable
Consulted
Informed
PhotobyFlickr

13. Set the value of objectives
Identify Objectives of
stakeholders
Organize them by
1. the importance of
stakeholders
2. their impact on your business
Find the right balance
PhotobyFlickr

14. Gather the inputs
Collect what you know
Assume what you can’t
collect
Keep it:
 realistic
 credible
 objective
PhotobyFlickr

15. Involve People
 Stakeholders helps to
 gather data and
 validate assumptions
 Data and assumptions
come
 from experts across the
company or
 independent research

16. Do the analysis
1. Study the gathered
inputs to build a detailed
model of
1. your product
2. your development project
2. Model various scenarios
3. Calculate the project
value in term of
1. costs, income, profits and
payback
PhotobyFlickr

17. And finally... Tell the story
Keep it:
1. Clear
2. Objective
3. Believable
4. Tailored on
preferences and
targets of people who
judge it
Photo by Flickr

18. Part 3
The Canadian
Method
Flickr: “Pen and Ink” by Heather,

19. What is it?
A method written by the Treasury
Board of Canada
“to support the development of a
strong business case that links
investments with program results
and, ultimately, with the strategic
outcomes of the organization”
PhotobyFlickr

20. Main characteristics
1. Completeness
2. Simplicity
3. Financial focus
4. Standard template
world-wide recognized
Photo by Flickr

21. Structure
Phase 1
Strategic Context
• Step 1 Business Needs and Desired Outcomes
Phase 2
Analysis and
Recommendation
• Step 2 Preliminary Options Analysis
• Step 3 Viable Options
• Step 4 Justification and Recommendation
Phase 3
Management and
Capacity
• Step 5 Managing the Investment

22. Phase 1: Strategic Context
Establish the case for
change
Clearly define the need for
the investment
PhotobyFlickr

23. Step 1- Business Needs and Desired Outcomes
Focus on:
 Strategic Environment
 Strategic Fit
 Description of the
Business Need
 Scope
Phase 1
Strategic Context
• Step 1 Business Needs and Desired Outcomes
Phase 2
Analysis and
Recommendation
• Step 2 Preliminary Options Analysis
• Step 3 Viable Options
• Step 4 Justification and Recommendation
Phase 3
Management and
Capacity
• Step 5 Managing the Investment

24. Phase 2: Analysis and Recommendation
It’s the heart of the business case
Provide answers to the following key
questions :
1. How will we get there?
a) viable options
b) associated costs and benefits
2. What is the best option?
a) financial appraisal to ascertain
funding
b) affordability
c) cost balancing in relation to
benefits and risks.
PhotobyFlickr

25. Phase 2: Steps
 Step 2 - the Preliminary Options Analysis: the Evaluation Criteria, a List of Possible
Options, the Screening of Options, and the Rationale for Discounted and Viable
Options.
 Step 3 - the Viable Options: Alignment, Costs, Cost-Benefit Analysis, Implementation
and Capacity, Risk, Benchmark, Policy and Standard Considerations and, lastly,
Advantages and Disadvantages.
 Step 4 - the Justification and Recommendation: Comparison Summary of the options,
and identification of the Preferred Option.
Phase 1
Strategic Context
• Step 1 Business Needs and Desired Outcomes
Phase 2
Analysis and
Recommendation
• Step 2 Preliminary Options Analysis
• Step 3 Viable Options
• Step 4 Justification and Recommendation
Phase 3
Management and
Capacity
• Step 5 Managing the Investment

26. Phase 3: Management and Capacity
Demonstrate the investment will be
managed effectively:
1. Assuring that all the appropriate
project and outcome management
strategies are in place
2. Showing how those strategies will be
used to guide the project through a
controlled environment to achieve
the desired business outcomes.
Photo by Flickr

27. Step 5 - Managing the Investment
Provide consideration to
 Governance and
Oversight
 Project Management
Strategy
 Outcome Management
Strategy
 Risk Management
Strategy
 Change Management
Strategy
 Performance
Measurement Strategy
Phase 1
Strategic Context
• Step 1 Business Needs and Desired Outcomes
Phase 2
Analysis and
Recommendation
• Step 2 Preliminary Options Analysis
• Step 3 Viable Options
• Step 4 Justification and Recommendation
Phase 3
Management and
Capacity
• Step 5 Managing the Investment

28. Photo by Flickr Contact me on