Writing Effective Business Cases: Beyond Costs and Returns
A business case is more than just a financial justification—it is the foundation for decision-making, accountability, and measuring success. Done well, it clarifies the why, what, how, and who of a project, providing stakeholders with confidence to commit resources. Done poorly, it risks being a tick-box exercise that fails to anticipate hidden costs, regulatory obligations, or diverse stakeholder needs.
What Is a Business Case?
A business case formally presents the rationale for undertaking a project or investment. It seeks approval, secures funding, and sets expectations. It is also a living reference point against which outcomes and performance can later be evaluated.
Core Components of a Business Case
While formats vary, most robust business cases include the following headings:
1. Executive Summary – A concise overview of purpose, proposal, and expected outcomes.
2. Strategic Fit & Objectives – How the proposal aligns with organisational strategy, priorities, or compliance requirements.
3. Options Analysis – The rationale for chosen approach, including alternatives considered and rejected.
4. Scope & Deliverables – What is included, what is excluded, and what success looks like.
5. Costs & Funding –
Capital costs (infrastructure, technology, assets).
Operational costs (staffing, licensing, maintenance, training).
Ongoing costs beyond implementation.
6. Benefits & Value –
Financial (savings, revenue growth).
Non-financial (customer satisfaction, compliance, risk reduction, social impact).
7. Risks & Constraints – Potential threats, dependencies, or limitations, with mitigation strategies.
8. Governance & RACI – Who is Responsible, Accountable, Consulted, and Informed, and the approval process required.
9. Implementation Plan – Timeline, milestones, and resource needs.
10. Evaluation & Success Criteria – How progress and benefits will be measured, both during and after delivery.
Common Challenges in Business Case Development
Narrow focus on costs – Many cases calculate purchase or setup costs but neglect ongoing revenue spend such as licensing, maintenance, or training. This is like buying a car without considering fuel, insurance, or servicing.
Ignoring stakeholder diversity – Different stakeholders value different things: Finance cares about ROI, Compliance about regulation, Operations about feasibility, and Customers about usability.
Overlooking non-financial benefits – Improved culture, reduced risk, or enhanced reputation can be just as critical as cost savings.
Weak governance – Unclear ownership or approval processes can stall decisions or create ambiguity later.
Approval hurdles – Whether requiring a signed document, formal board approval, or email confirmation, clarity is needed on what constitutes valid authorisation.
Best Practices for Building Strong Business Cases
1. Engage stakeholders early – Use the RACI model to ensure diverse voices are heard and expectations understood.
2. Balance lead and lag measures – Show both predictive indicators (training uptake, system usage) and outcome indicators (cost savings, compliance achieved).
3. Include the full cost of ownership – Capital + operational + future costs. Avoid “surprise” expenses that undermine credibility.
4. Articulate non-financial value – Regulatory compliance, risk reduction, customer satisfaction, or staff well-being often justify investment as much as financial return.
5. Provide options, not ultimatums – Present at least two or three feasible approaches, showing why the preferred option is best.
6. Keep it clear and concise – Decision-makers may only read the summary and key numbers. Use appendices for detailed analysis.
7. Define success up front – Include measurable outcomes so the business case doubles as a benchmark for later evaluation.
The Business Case as a Living Document
A strong business case is not only about permission to proceed; it is also about performance management. Returning to it after delivery helps organisations ask: Did we achieve our intended benefits? Did costs align with projections? Were risks managed effectively?
Conclusion
An effective business case balances rigour with clarity. It ensures consensus, builds confidence, and provides a shared framework for delivery and evaluation. By anticipating challenges, including the full range of costs and benefits, and engaging stakeholders early, organisations can avoid costly surprises and create a solid foundation for successful outcomes.