Definition: Business Case

A business case in the context of project and program management provides the basic rationale and justification to the organization to charter the project or program under consideration. It is a formal document that officially authorizes the existence of the project and the program and highlights the overall solution or approach that the program will use to meet the business objective and need. In that context, it also provides a cost-benefit assessment of the approach or solution that is included in the document. The document is primarily intended for executives, funding organizations, and program or project sponsors. In most organizations, this document must be approved by the various stakeholders and executives before a project or program charter can be issued by the program sponsor to the project or program manager.

Sections and topics in the business can vary from one situation to another, but the common information should include the following:

Strategic context – The business case should provide an overview of the high-level organizational context to make the business case of the project or program under consideration easier to understand and comprehend.
Project / Program objectives and goals – The goals of the project and program must be stated along with how those goals are aligned with the organization’s overall business strategy.
Description of business benefits, outcomes, and the need – This is the most important section of the business case as it articulates the real business need for the project or program.
Available options – The business case should identify all available options to meet the business need under consideration.
Cost / Benefit analysis – The business case document should perform a detailed cost and benefit analysis of the all the above options.
Decision criteria – The business case document should delineate the criteria that are being used to evaluate the available options. The document should also state the applicability of those criteria for the organization and how those evaluation criteria are aligned with overall organizational objectives.
Risk Assessment – The document should detail a comprehensive risk assessment of all the options. This includes detailing the risks with all the options and how they will be mitigated. These risks should be considered when performing the cost and benefit analysis of the solution.