Generic Outline for Constructing a Business Case

Adapted from Project Manager's MBA by D.J.Cohen and R.J.Graham

Executive Summary

• Description of the project

• Market, customer, and competition

• Cost-benefit analysis

• Sensitivity analysis, risk assessment, and contingencies

• Definitions of success and failure

Description of the Project

• Purpose of the → investment (expected gains from the project outcome during its lifecycle)

• Key reasons for pursuing the project  (competitive advantages of the project against other project proposals; advantages of the business model, expected contribution to the shareholder value)

• Strategic alignment  (contribution of the project outcome during its entire lifecycle to implementing the company's strategy for sustaining competitive advantage)

• The → value proposition  (core characteristics that make this venture uniquely valuable to its customers and will allow continued success over time)

• Project requirements (an overview connecting the requirements with specific contributions to the business success of the entire venture)

• Project goal, milestones, and major deliverables  (a list relating these items to the business success of the entire venture)

Market, Customers, and Competition

• Market analysis

  • Critical success factors

  • Strengths, weaknesses, opportunities, threats (SWOT analysis)

  • Market size and segmentation

  • Market trends  (during the project outcome lifecycle)

• Customer and end-user analysis

  • Customer and end-user identification

  • Fulfillment of customer and end-user needs

• Competitive analysis

  • Identification of both direct and indirect competitors

  • Competitors' offerings

  • Competitive advantage to be produced by the project

  • Countermoves competitors might make  >>>

  • New competitors  (who are not active at present but may appear)

  • Contingency plans  (what you intend to do to meet countermoves by existing competitors and prepare for new competitors)

Cost-Benefit Analysis

• Financial model

  • Cash flows in  (from output during its lifecycle)

  • Cash flows out  (direct and indirect expenses)

  • Financial analysis  (financial statements projected out for the required number of years, including → revenue model and → profit generation strategies, income statement, balance sheet, net present value, and discounted economic value added)

  • Assumptions  (about financial model, market, competition, technology and any other contingency that may influence the projected numbers of the financial analysis)

  • Assumption tests  (opportunities that will allow testing of the assumptions)

• Non-quantitative factors

  • Opportunity costs  (what would company gain by investing the project resources in other opportunity)

  • Benefits  (e.g. enhanced → core competencies / → capabilities of the company)  >> 

Sensitivity, Risks, and Contingencies

• Sensitivity analysis

  • Critical assumptions

  • Assumption change  (critical factors and their influence on the results of the venture)

• Risk analysis

  • Identification of risks

  • Quantification of risks

  • Risk management  >> 

  • Contingency plan  (minimizing damage if a high-probability event occurs; monitoring the medium-probability events)

• Contingencies and dependencies

  • Value chain analysis  (what must happen beyond the boundaries of the project to make the investment successful)

  • Responsibility matrix  (the roles of the project team members)

Definitions of Success and Failure

• Metrics

  • Economic factors/measures

  • Strategic factors/measures

• Methods

  • Process  (how data will be collected to report metrics)

  • Responsibility  (roles of the people who will be responsible for collecting the data)