Template: Business Case - Tom Horvath



INTRODUCTION: Business Case Template | |

|The template content starts on page 3. |

|What This Is |

|A business case is a formal document that describes the business reason for initiating a software development project. For example, a software|

|project might decrease processing time for a specific task, and the "business case" may be that the existing staff can serve additional |

|clients without adding additional resources. A well-written business case provides a compelling justification for a change by explaining what |

|system or process is lacking and describes a high-level recommendation for the best possible solution. |

|A typical business case describes the business problem, the possible solutions, the risks and benefits of each course of action, and the |

|solution recommended for approval. The scope of this document is proportional to the size and risk of the project. Larger, riskier, and more |

|expensive projects typically warrant a more formal and quantitative assessment of the business rationale. |

|Why It’s Useful |

|In essence, the business case helps communicate the objectives of the project, and provides the information necessary to receive funding |

|approval. Establishing the business case helps pinpoint the specific benefits and costs of a proposed solution—information the project sponsor|

|needs to be confident in the selected approach. By describing the risks tied to each solution, the business case also allows decision makers |

|to determine their level of risk tolerance, and establishes a realistic expectation of the amount of risk associated with the approved |

|project. |

|By including information on all reasonable alternatives—including the option to make no change at all—the business case also requires that the|

|project requestor(s) justify the value to the company. Project approvers review the relative merits of all available options, instead of |

|making project selection decisions in a vacuum. This should result in the dismissal of any proposals that do not have demonstrable value. |

|However, the usefulness of the business case document does not end with the permission to move forward. Used properly and reviewed regularly, |

|it can serve as a barometer throughout the project to insure the solution still meets business needs and the project is in tune with changing |

|environments. |

|How to Use It |

|Begin developing the business case as soon as you start the project—usually first thing after the project sponsor submits the initial project |

|request. The Project Manager may enlist the help of the Business Analyst or other business resources in order to complete the information in |

|this document. |

|Share the initial draft of the business case with the project sponsor and solicit feedback. Incorporate sponsor feedback into the document in |

|order to complete the business case. |

|The project sponsor should share the completed business case with the appropriate parties in order to secure project funding. (This will vary |

|from organization to organization.) |

|Once the business case has been reviewed and the project approved for funding, use the business case to establish the success criteria for the|

|project. Your team will have a clear understanding of the key factors determining whether the project's goals have been accomplished (and the |

|project completed). |

|Review the business case throughout the project to verify that the initial justification is still valid, and to verify that the project will |

|deliver the solution to the business need. If a review shows that an original business need has changed, this may result in the termination of|

|the project or serious changes to the project scope. |

The template content starts on page 3.

|The template content starts on the following page. |

|About the Author |

|Sinikka L. Waugh, PMP, is the founder and head coach of the project management coaching firm Your Clear Next Step, L.L.C. Sinikka is an |

|actively practicing project management consultant, known for consistently helping teams find innovative ways to leverage effective project |

|strategies across multiple disciplines and technologies. With over 10 years in project roles (primarily program manager, project manager, and |

|business analyst) Sinikka has successfully applied project and leadership expertise to improve project performance in a wide variety of |

|industries, including publishing, education, product fulfillment and distribution, insurance, event and travel management, human resources, |

|and financial services. As a coach, Sinikka’s down-to-earth, “try this now” approach blends with her passion for helping others improve. Her |

|energetic and engaging style helps make both the art and science of project management accessible to those she works with. |

|Sinikka holds a BA from Central College, an MA from the University of Iowa, and is a certified Project Management Professional through the |

|Project Management Institute. |

The template content starts on the next page.

Business Case Document

Throughout this document, annotations in blue italicized type will explain the typical use and content of each section of the document. Normal text provides an abbreviated example of typical document text. You should customize the text to fit your project and delete the blue annotations when finished.

EXECUTIVE SUMMARY

Business Case Summary

Describe the business rationale for the desired solution. Include reasons for selecting the approach, especially from a business perspective.

In the current environment, orders received by mail are opened and batched using high-speed mail processing equipment. They are shipped in batches to data entry resources located in the metropolitan area. Data entry specialists key the orders into a file that is saved onto an individual data disks and then delivered back to the processing center. The files are then uploaded and processed in batch. The consequent delays in order processing are resulting in lower customer satisfaction scores from customers who order by mail than customers who place orders online. In addition, rising fuel and insurance costs for delivery are negatively impacting the profit margin on mail orders.

The intent of this project is to leverage imaging technology to scan the orders to a temporary data store, and implement a secure location for data entry specialists to directly input the orders using images of the mailed orders, rather than keying from the hard copy. If this project is successful, future use of optical character recognition (OCR) or intelligent character recognition (ICR) may be implemented to further reduce manual data entry time.

Anticipated Outcomes

Describe the desired outcome that should result by completing the project. Where possible, include quantifiable measures such as projected cost savings, increased revenues, etc.

■ Reduce order entry time for mailed orders from 3 days to 1 day.

■ Improve customer satisfaction from customers who order by mail by 5 percentage points.

■ Reduce expenses by $50K annually (reduction in fuel, insurance, and vehicle maintenance costs).

■ Improve profit margin on manual orders by 3% per order.

Critical Success Factors

Define the things that must happen in order for the project to be deemed a success. This may include a list of specific success criteria that must be reached in order for the project team to determine that the project is complete.

■ Imaging technology must be successfully implemented.

■ Online data store for imaged orders must be secure.

■ Data entry resources must have secure connectivity to the order entry location.

BUSINESS NEED

Business Context

Describe the current business environment. This could include the current business process, current software systems, current hardware availability, and the current technology environment.

Imaging technology exists within the company, and has been successfully leveraged by the XYZ department, but that equipment is currently being used to capacity. New equipment must be purchased and installed to support this project. The internal Information Security team has recently approved the use of ABC technology for secure intranet sites. Approximately 30% of data entry specialists do not currently have high-speed internet access.

Problem Statement

Define the scope of the business problem. Include a list of business constraints.

Web orders are processed more quickly than orders placed by mail, but approximately 35% of order revenue is generated by mail orders. 80% of those who have been customers for 5 years or longer continue to place orders by mail, but the costs of these orders is higher per order than web orders, and continues to increase, while customer satisfaction for mail orders has been steadily declining. Our current vendor for mail processing equipment does not offer any associated imaging equipment, but has a partnership with a third party specializing in imaging.

Business Need

Define the need that is to be alleviated. This describes the project’s purpose and expected end results, in business terms, independent of the solution.

When this project is successful, mail orders will be processed faster and more cost-effectively than they are today, without compromising the security of the information.

RECOMMENDED SOLUTION

Solution Overview

Provide an overview of the solution preferred by the project sponsor.

Imaging technology will allow orders to be imaged during the high-speed mail processing cycle so that each order is only handled one time. Cost-effective remote data entry resources will continue to be leveraged, but expenses associated with delivery will be reduced significantly or eliminated.

Solution Detail

Provide additional detail about the preferred solution. This may include a description of the proposed business process and technology environment. It should include a detailed description of the proposed software and hardware, and a description of the performance measures desired.

Solution Benefits

Use this section to outline the benefits of the selected solution.

ALTERNATIVE SOLUTIONS

List all other solutions considered, including the option to take no action. Identify the scope of the solution, the degree to which it meets the stated business needs, the resources required to implement it, the risks, costs, and any other relevant details. Additionally, explain why the solution was not selected as the desired means of addressing the business need.

|Alternative |Description |Reason Rejected |

|Considered | | |

|Take no action now |Continue to leverage existing |Decreasing customer satisfaction scores are falling outside of the tolerance for |

| |process without any changes. |customer service; budget forecasts for next year indicate a shortfall between the |

| | |funds available for insurance and fuel and the anticipated expenses. Doing nothing|

| | |will likely cause (A) a potential loss of long-term customers as well as (B) cost |

| | |reductions in other areas of the department to offset the increased insurance |

| | |premiums and fuel costs. |

|Change insurance |End the contract with the current |Current insurance provider does not have the most competitive rates on delivery |

|providers |insurance provider and seek out a |driver insurance, however, we receive significant discounts on other insurance |

| |different provider with more |coverage because we have multiple insurance products through this vendor. Changing|

| |affordable rates. |vendors would likely increase our insurance costs in other areas. Additionally, |

| | |this solution only addresses the rising cost of insurance premiums; it does not |

| | |address the rising fuel costs or the decreasing customer satisfaction scores. |

|Move data entry |Discontinue the use of off-site |The current mail processing facility does not have the space to accommodate the |

|function in-house |data entry specialists, and allow |additional data entry specialists required. Space could be built out at a |

| |all data to be keyed internally. |neighboring facility, however the costs of space modification are high, and, |

| | |without an imaging solution, the paper orders would still need to move from one |

| | |location to another. Processing times would not be significantly improved. |

| | |Off-site data entry employment opportunities continues to be a selling point for |

| | |our company, allowing us to attract certain talent in the current market, and |

| | |causing us to remain in the top 5 Workplaces with the Most Flexible Employment |

| | |Options list for the past 17 years. |

COSTS, RISKS, AND BENEFITS

Costs

Outline expected costs for completing the project. Include a detailed review of the expected return on investment, as well.

|Project Costs |Details |Frequency |Amount |

|Project staffing |Manager, business analysis team, technical team, quality |One-time |$XX,XXX.XX |

| |assurance team | | |

| |(estimated total of Y hrs at $Z/hr average) | | |

|Software |Imaging software, purchase & installation |One-time |$XX,XXX.XX |

|Consulting fees |Imaging software consulting fees – $X one-time |One-time |$XX,XXX.XX |

| |(Y hrs at $Z/hr) | | |

|Software |Imaging software, ongoing maintenance |Ongoing |$X,XXX.XX / year |

|Total anticipated costs over 3| | |$XXX,XXX.XX |

|yrs | | | |

|Cost Reductions |Details |Frequency |Amount |

|Eliminated fuel costs |100% elimination of delivery fuel costs |Ongoing |$XX,XXX.XX / year |

| |(Note: calculation based on projected fuel cost of | | |

| |$X.XX/gallon) | | |

|Eliminated delivery driver |100% elimination of delivery driver insurance (delivery drivers|Ongoing |$XX,XXX.XX / year |

|insurance costs |are no longer needed) | | |

|Total anticipated tangible | |One-time |$XXX,XXX.XX |

|cost reductions over 3 yrs | | | |

Anticipated benefit over 3 years: $________ (anticipated cost reductions minus anticipated project costs)

Risks

Known risks should be listed here. Include project risks, as well as the risks or costs of not proceeding.

If the third-party imaging vendor does not provide a compatible imaging solution for our existing mail processing system, “once and done” order handling with high-speed equipment will not be feasible.

Benefits

Describe the benefits of the desired business outcomes.

Mail orders are processed faster, more efficiently, and at a lower cost. Comparison of costs and expected benefits over 3 years shows a net savings of $XXX,XXX.XX. Customer satisfaction scores for mail orders (measured monthly) are expected to increase within the first three months.

IMPLEMENTATION DETAILS

Assumptions

List the project assumptions for the selected solution. In particular, list the assumptions that were a factor in the establishment of project costs, ROI, timeline, etc.

Current high-speed mail processing equipment has at least 5 years of remaining production use.

Resources

Describe the availability of a project sponsor, a project leadership team, technical team resources, business team availability, etc.

Successful implementation requires the participation of the project sponsor, a part-time project manager, and staff.

Deliverables

List desired project deliverables, the owner of each, and any dependencies impacting delivery. The sample below does not show target dates for the deliverables, although these can be included.

|ID |Deliverable |Owner |Dependencies |

|1 |Feasibility study to determine if 3rd party imaging vendor |Tech lead |Vendor availability |

| |software is compatible | | |

|2 |Vendor negotiations and contract completion |Strategic Sourcing |Deliverable #1 |

|3 |Architectural design for order entry portal |Tech lead | |

|4 |Security review and approval for order entry portal |Tech Lead, Information Security |Deliverable #3 |

|5 |Data Entry Resource change/transition management plan |Change & Communication team |Decision on goal state |

| | | |solution |

|6 |Detailed implementation timeline |Project Manager |Deliverables #1-5 |

|7 |Installation of imaging software |Project team |Deliverable #6 |

Implementation Timeline

List project milestones and establish a high-level project schedule. This may include the project management approach, phase/stage definitions, technical delivery activities, and other information relevant to establishing a work estimate. You might also define the critical path, to highlight relationships and dependencies between project activities. Alternatively, you may simply link/refer to the project plan if one exists. (The tangible, measurable deliverables to be produced are listed in the previous section, while this section is structured around the project management methodology.)

|Project Phase |Target Begin Date |Target End Date |

|Planning |02/15/20xx |05/18/20xx |

|Execution |06/02/20xx |03/30/20xx |

|Go-Live/Implementation |04/01/20xx |08/31/20xx |

|Closing |09/01/20xx |11/01/20xx |

CONCLUSIONS AND RECOMMENDATIONS

Highlight any additional conclusions reached while developing this business case, or additional recommendations to consider before moving forward with this project.

This team recommends proceeding with the project, as stated above, within the next 6 months. If any of the stated assumptions prove to be false, it will be critical to re-evaluate the business case as needed. If costs of insurance and fuel remain constant or decrease, the priority of this project would be lowered. If this project is not implemented within the lifecycle of the existing high-speed mail processing equipment, then imaging should be included as a requirement for the new/replacement equipment.

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