What is business case? | APM

Five elements of a business case

A common way of thinking about a business case is using these five elements:

1.  Strategic context: The compelling case for change.
2.  Economic analysis: Return on investment based on investment appraisal of options.
3.  Commercial approach: Derived from the sourcing strategy and procurement strategy.
4.  Financial case: Affordability to the organisation in the time frame.
5.  Management approach: Roles, governance structure, life cycle choice, etc.

The business case is reviewed and revised at decision gates as more mature estimates and information become available. The approved business case provides a record of the decisions made by governance about how to achieve the required return on investment from the work. It documents the options considered and it is normal practice to include the ‘do-nothing’ option as a reference. Through this approach, the business case becomes a record of the recommended option with rationale and evidence to support the decision.

The presentation of the business case, if approved, results in the formal startup of the project, programme or portfolio. The sponsor owns the business case.

It brings together the investment appraisal with evidence of how the investment is intended to lead to realisation of the intended benefits. All projects must have a business case that demonstrates the value of the work and it is outlined during the concept phase of the life cycle.