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The Business Case

Unlike the Project Charter, the Business Case is a dynamic document and should always contain up to date information about the project's costs and benefits. This is especially true around business decision points/gate reviews/phase exit reviews when the document will be used (along with other information about the state of the project) to determine the advisability of continuing with the next phase.

Costs

Information about costs will be gathered at a high level initially. A cost estimate will usually be based on the initial Scope Statement unless the project is a carbon copy of one done by your organization before, and historical information is available which will give you a more accurate forecast. After the work has been broken down, a more accurate forecast will be available by rolling up the budgets for individual items in the WBS. If you're undertaking a software development project, it's likely you can derive a fairly accurate cost estimate by totalling up the number of hours for the activities in the WBS and multiplying this figure by the loaded labor rate for your resources. However the adjustment is done, it should be done before the phase exit review for the planning phase is conducted so that the most accurate, up-to-date prediction of costs is available for that meeting.

The costs portion of the Business Case should be updated when more accurate information is available for the project budget. For example, if the actual cost for plumbing the first floor of a 10 story building was 25% under the budgeted cost, the budgets for the remaining 9 floors should be updated and the cost updated in the Business Case. Cost should also be updated every time a change request which affects the budget is approved. You need to review the Business Case every time a phase exit review is conducted to ensure that the latest and most accurate estimate for costs has been captured. Costs at later phases will include both actuals and budgets.

Benefits

Benefits will include both tangible benefits and intangible benefits. Examples of tangible benefits will include expected revenue from the project and expected cost savings. For example, if the project delivers a software system to replace a "legacy" system, tangible benefits might include an expected increase in revenue from additional customers, or increased revenue from existing customers. Tangible benefits might also include expected cost savings from an expected reduction in support costs.

Intangible benefits might include such things as improved customer satisfaction, improved morale for support staff, or an opportunity to compete in a new market. Don't forget that your project should align with your organization's strategic goals and objectives and the Business Case Benefits statement will be the proper place to capture this alignment.

Your benefits statement should be updated whenever new information is discovered that would affect the tangible benefits, such as changes in the market place, a new potential customer for the system, or the loss of an existing customer. Intangible benefits may also change as more is known about the project and the resulting products or services. For example, you may learn that a competitor has introduced a similar software system and not experienced the improvement in customer satisfaction they expected. The benefits statement in your Business Case needs to be reviewed in advance of each phase exit review to ensure it captures the most accurate and up-to-date information available on benefits.

Your benefits statement should be revisited whenever a change that affects the scope of your project is approved. Review the tangible and intangible benefits against the change in scope to ensure that the benefits are not affected; re-state them if they are.

Scope Statement

The Scope Statement for the initial version of your Business Case will be derived from the project's Initial Scope Statement. This statement will be the same one you used to derive the scope statement for your Project Charter, so you may want to cut and paste the Scope Statement from it. Keep in mind that the Scope Statement will have to be adjusted whenever a change adding to or eliminating scope is approved.

If any of the project's benefits depend on the performance of the system the project is delivering, your Scope Statement should capture any performance, load, or stress measurements that the system must deliver in order to realize the benefit.

Project Goals & Objectives Table

This table is a simple tool that can be used to articulate and organize the goals and objectives of the project. It should be used to support the Business Case for the project but can also be used as a supporting document or appendix for the Project Charter. The project's goals and objectives should support the project's stated benefits; each benefit should be supported by one or more objective however every objective may not be directly related to a benefit. For example, a goal might be that the project complete one month before a legislatively mandated deadline; while this goal will be important to the project, it won't necessarily relate to any of the benefits. The project success should be measured against the degree to which these goals and objectives have been met.



NAME DESCRIPTION TYPE OF FILE  
Business Case Template An MS Word 2003 Document Word Documents Download
Project Goals & Objectives Table Word Documents Download