Introduction.

This article explains how to write a business case. It includes 2 business case examples and a free business case template for you to <span data-mce-type="bookmark" style="display: inline-block; width: 0px; overflow: hidden; line-height: 0;" class="mce_SELRES_start">download

What is a business case?project managers

A business case is the justification for some activity (e.g. a project) undertaken by your organisation. It weighs up the timescales, costs and risks of doing the activity against the benefits to be gained. Think of it as weighing up the pros and cons and then taking a sensible decision. to clearly assign each task to one or more Responsible persons. This helps to avoid confusion and ensure that everyone knows who is doing what. The matrix also helps in

A business case forms an essential component of the curriculum of the stakeholder engagementbest project management courses by identifying who needs to be consulted or informed at each stage of the project..The RACI matrix is not always required, for example, for small and short-term projects or projects with a small team of stakeholders. In such cases, communication and coordination can be achieved in a less formal way. However, for most projects of medium and larger size, the use of a RACI matrix is a simple and effective way to organise work and improve communication.

Personal business caseCreating a RACI matrix

You may also use a business case to justify an investment you make in your personal life. For example, when you’re thinking of moving home to another area. You and your spouse will need to understand the costs of moving, the timescales and risks involved, and weigh these up against the benefits to be gained e.g. saving time traveling to your office, or your children able to go to a better school.Six steps guide to building a RACI chart

Why have a business case?The following are the steps to create a RACI matrix:

Projects should not just start on a whim or because of vanity – although a lot of money has been wasted over the years on such Identify the tasksprojects: List all the tasks and milestones of the project in the left column of the RACI matrix..Define the stakeholders

For business organisations, justification for a project usually takes a commercial form i.e. evaluating how much money could be made from the investment. For example, investing money in developing a new software app to bring first to market, might be deemed to bring certain monetary benefits (in terms of sales) which exceeds the costs of investment.: List all the project stakeholders in the top row of the matrix.

For government organisations, justification is probably not a commercial one, but could be based upon giving value for money to achieve certain benefits. For example, a public health campaign extolling the benefits of flu-vaccinations for elderly people, might be judged as giving greater value for money than having no campaign, and instead relying on treating patients in hospital once they have contracted the virus.Assign the roles

With so many competing claims being made on scarce funds, organisations need the assurance that the decision they are taking is the right one. After all, there will not be enough funds to pay for all the ideas for projects which are floating around the organisation.: For each task, assign one of the four roles (R, A, C, I) to each stakeholder.

Who uses a business case?Review and refine

Business cases can be used by many different levels of management within an organisation. Not only are they used to justify the investment in an individual project, but also they are typically used by a : Check that each task has at least one R and one A, and that there are no conflicts or ambiguities in the assignments.portfolio managementValidate office to help it decide which projects will contribute to the organisation’s strategic goals. That way, they can filter out the bad ideas for projects, and only fund projects which will contribute to strategic goals.: Confirm the RACI matrix with the team members and stakeholders to ensure accuracy and agreement.

A business case is also often used by a project sponsor or project executive to help it decide if they should invest in a specific project.Distribute

In all cases, the business case must be written and approved prior to any major commitment of resources.: Share the RACI matrix with all the stakeholders and make it accessible for reference and updates.

What form does a business case take?Best practices for assigning roles

Business cases can take many forms – digital or analogue. The tools you use to create one are also many and varied. Common business tools such as Microsoft Office might be used. Rather than being a document or slide deck however, it could equally be in the form of an email.The following are some tips for assigning roles in a RACI matrix:

Equally, a business case could be written by hand on a whiteboard or flipchart, or on the back of a cigarette packet!Make sure that all the team members understand the RACI definitions and agree on the roles.

What you should always remember is that a business case does not have to be a huge long document. In fact, it should be as short as possible, and only include the most important information. That way it cuts out the noise and provides decision-makers with just the right information to enable them to take sensible decisions.Assign roles based on the skills, authority, and availability of the team members, and not just on their positions.

For those of you interested in Avoid assigning too many Consulted and Informed roles, as this can lead to information overload and unnecessary communication.project managementConsider the scope and complexity of the project when defining the tasks and assigning the roles., the project management methodology known as Update the RACI matrix as the project progresses or as changes occur in the team or the tasks.PRINCE2Common mistakes to avoid focuses its decision-making on a project on having a viable business case.The following are some common mistakes to avoid when creating a RACI matrix:

Business case examples: Ensure that all the stakeholders agree on the roles and responsibilities assigned to them or to others.

We will now give you 2 business case examples. The first example is one which you might find useful for taking decisions in your personal life. The 2nd business case example is more business focused project.Not updating the RACI matrix

Business case example 1: Moving home: The RACI matrix should be a living document, not a static one. Review and update it as needed.

Suppose you and your spouse are considering moving to a new home. You will need to weigh up the pros and cons of moving. This is done using a business case. You might not call it that, but that’s what it is. Let’s look at an example.Not using the RACI matrix consistently

Reason: Ensure that all the team members use the RACI matrix as a reference and respect the roles and responsibilities assigned.

As you can see from the example, the first thing to be clear about in a business case is the reason for doing the project or activity. In this example, the couple has answered the question RACI matrix templates and toolsWhy?A RACI matrix can be created using different tools and templates. Here are some of them: In fact, there are two problems here – the local school and John’s long commute.Spreadsheet software

Options considered: You can use a simple Excel or Google Sheets template to create a RACI matrix, which allows you to customise and format the chart.

A business case should weigh up the competing options which have been considered. After all, there is usually more than one option. Perhaps an alternative option would have been for John to change his job to one nearer their current house. However, this wouldn’t solve the issue with the school.Project management software

Benefits: Many project management tools,

The benefits of a project or activity are the positive things you’re going to get back in return for your investment of time and money. In this case, the kids will get a better education, and John will save time each day.

Timescalessuch as Monday.com, offer built-in RACI matrix features, which allow you to create, share, and update the matrix along with other project elements.

It’s also important to understand how long the investment of resources will take. This is so that the organisation (or family in this case) knows when the resources will be freed up to work on other RACI matrix softwareprojects: There are some specialised software that focus on creating and managing RACI matrices, which offer advanced features and integrations. or activities.Visual collaboration tools

There are usually 2 timescales to consider. First, the timescale of the project or activity – in this case 3 months to find a new house and move there. Second, the time over which the benefits shall be realized. In this case it’s 5 years until the kids leave school.: There are some visual collaboration platforms, such as Miro, which offer interactive RACI matrix templates, which allow you to create and collaborate on the matrix visually.

CostsChoose the tool that best suits your team’s needs and preferences, and that integrates well with your existing

The costs of doing the project or activity is the next important bit of information. On this project, the costs of moving to a new house will be £5,000. These are the project costs.project management processes

However, the couple will spend an additional £2,000/year for every year over which the business case is calculated. For a project in an organisation, this is usually referred to as the operational costs of maintaining and operating the projects outputs e.g. an IT system. At this point, the couple knows the total costs over the timescales when the benefits shall be realized.. Remember that a RACI matrix is only as good as its clarity and consistency, so make sure that you use it correctly and regularly.

RisksEnhance your skills with our expert-led courses

For any activity or project, it’s also important to understand the major risks involved. Risks are the uncertain things which may or may not happen during the period of the investment. There is only one risk identified here, which is the risk that the couple might lose touch with friends who live close to them right now.

Investment appraisal

The next section is where the costs and timescales and risks are weighed up. For this project, it’s a simple decision for the couple to decide if it’s worth spending money over the next 5 years to give their kids better schooling and to save John 2 hours a day commuting.

For an organisation to decide if an investment is worthwhile, however, there are several different ways in which it can decide about the investment.Self-paced

Often in organisations there are rules defined to help business analysts or APM PFQ blended onlineproject managers write what’s called an investment appraisal. In the next example, we’ll look at one example known as net benefits.£749 +vat

Business case example 2: Handheld device project

Imagine a heating repair services company that uses a paper-based set of forms filled in by an engineer during site visits. The spare parts required to fix the heater are recorded on a form which is given to staff to process back in the office. They then order the parts, and schedule a follow-up visit for the engineer to fix the heater.

Let’s now look at this example business case.: Evaluate the effectiveness of RACI for lessons learned and future

Executive summaryprojects

This sample business case contains an executive summary. This section briefly describes the selected option and the key benefits it will bring..

ReasonsUsing RACI to enhance communication

The reasons for the project are clearly spelled out when describing the 3 current problems which the company faces.RACI charts establish clear

Optionslines of communication

In this example, there are 2 options (other than do nothing) which have been examined. Each option is summarized and the reason why option 3 is the preferred option has been stated. by identifying who needs what information and when, Minimising unnecessary meetings and emails, clarifying decision-making processes, and ensuring all relevant parties are consulted.

BenefitsAsk team members to consult the RACI matrix when sending updates or requesting input.

The expected benefits of reduced overheads are clearly stated. Benefits should be measurable and quantifiable. That means that the benefits can be measured later. But what about the reduced errors, rescheduled appointments and customer contract cancellations? Aren’t they benefits?Resolving conflicts and ambiguities in RACI assignments

Well, these are in fact something else – they’re called outcomes. Outcomes are the results of the changes which come about by using the new handheld devices. The ways you measure the improvements resulting from these outcomes are known as benefits.Facilitate discussions to resolve conflicts by reviewing the project scope and objectives, clarifying role definitions and expectations, considering team members’ skills and workloads, making necessary adjustments to balance responsibilities, and documenting and communicating any changes.

Dis-benefitsTeam members should have regular discussions about their RACI roles to avoid misunderstandings and encourage collaboration.

This example also contains a dis-benefit which is that the back-office staff morale will be lower due to reduced overtime payments. A dis-benefit, if you’re wondering, is a negative consequence of a project. It’s not the same as a risk which implies something uncertain. A dis-benefit is something which you know will happen because of the project and it has negative consequences for the organisation. It’s the opposite of a benefit!RACI and Agile project management

TimescalesAlthough RACI is a common tool in the traditional project management, it can be adapted and integrated with

Just as we saw in the previous example, the business case contains 2 timescales – the project timescales (i.e. the time it will take to complete the project) and the benefits realization timescales (i.e. the time over which benefits are expected to be realized).Agile methodologies

Costs as well. Here are some tips on how to do that:

Again, there are 2 costs – project costs and the ongoing operational costs over the benefits realization timescale. When the decision is taken whether to invest in this project, the total costs (i.e. project costs and ongoing operational costs) are weighed against the expected benefits over the same time period.Use RACI for high-level project roles and responsibilities

RisksAdapt RACI for each sprint or iteration

One major risk has been identified in this example, but on your project, there could be many risks.Focus on team roles instead of individual assignments

Investment appraisalIncorporate RACI discussions into sprint planning and retrospectives.

The final section is the investment appraisal. The investment technique used in this example is called net benefits. As you can see from the table, the project and operational costs are recorded for each year of the investment.In

The project lasts 1 year which is why the project costs are zero after year 1. Of course, the benefits won’t be realized until the solution is in place and the company starts to use the handheld devices.Scrum

The net benefits are simply the total benefits minus the total costs. This shows that the company will start to get a return on its investment sometime towards the end of year 2. This knowledge is vital if the decision-makers are to take a sensible decision about whether to invest in the project., RACI can be used to define roles and responsibilities for each Scrum ceremony, epic, and user story. For example:

Business case templateA Product Owner is Accountable for prioritising and approving the product backlog items.

This simple A business case templateScrum Master is free to download.is Responsible for facilitating the Scrum process and addressing impediments.

SummaryThe Development Team is Responsible for delivering potentially shippable product increments.

A business case is the most important document on any project. That’s because it justifies the investment.By using RACI in Scrum, teams can achieve a balance between structure and flexibility.

It helps an organisation be clear about why a project is needed, and what the results of the investment will be. This is crucial because no organisation has unlimited funds to spend on an unlimited number of projects. Therefore, a business case gives confidence to senior managers when deciding to invest in one project rather than another.RACI matrix variations and alternatives

However, as you have seen in this article, a business case is something which you can find useful when taking major decisions in your own personal life. Remember – a business case doesn’t need to be a lengthy document. It could easily be a few notes scribbled on the back of something or even sent in an email.In addition to the standard RACI matrix, there are several variations and alternatives that can be used for specific project needs. Here are a few examples:

Whatever form your business case takes, remember one thing – it will help you or your organisation take sensible decisions about committing time and resources to a project or activity.RASCI (adding the ‘supportive’ role)

Remember, if you want to learn more about developing a business case, and learn many of the techniques useful for assessing business problems, consider attending a classroom Supportivebusiness analyst course: People who support the Responsible person in completing the task..This could be useful for

Business case FAQsChoosing the right model for your project

Who approves a business case?When choosing a RACI matrix model for your project, there are several factors to consider. Here are some key ones:

Usually on a project, the project sponsor (the person or people who are committing the funds) will approve a business case. Before approving it, they need to have confidence that the problems have been addressed and the right solution has been selected, that the benefits are achievable and realistic, when the investment will pay off, and how big will the return on investment be.The complexity and size of the project

What makes a good business case?The structure and culture of the team

As you have seen in this article, there’s several important bits of information which goes into a business case. Don’t spend unnecessary time though adding information which isn’t required. Your project sponsor will have to read your business case before they approve it, and you don’t want to make their job any harder than it already is!The decision-making processes in place

There are several things you can use to check whether your business case is adequate or not. Here’s a checklist of 13 questions to ask yourself before you submit your business case to your sponsor for approval:The communication needs and preferences

1. Are the reasons for the project consistent with the corporate, The level of involvement of the stakeholders.portfolioThe key is to select the model that best fits your project requirements and helps to optimise clarity and efficiency. or Benefits and limitations of RACIprogramme managementAdvantages of using RACI in project management strategies?RACI matrices provide several benefits for project management, including:
2. Is the Clarityproject plan: Establishes clear roles and responsibilities for each task in a project aligned with the business case? (e.g. are the costs and timescales in the project plan correctly reflected in the business case?)Accountability
3. Are the benefits clearly identified and justified?: Ensures that each task has an assigned responsible person
4. Is it clear how the benefits will be realized?Efficiency
5. Is it clearly defined what will judged a successful outcome?: Reduces duplication of work and confusion by defining roles
6. Is the preferred business option clearly stated, along with the reasons why?Communication
7. If the project requires external procurement, is the preferred sourcing option stated, and why?: Facilitates better information flow among team members
8. Is it clearly stated how any necessary funding will be obtained?Conflict resolution
9. Does the business case include non-financial, as well as financial criteria?: Provides a framework for addressing role-related conflicts
10. Does the business case include operations and maintenance costs and risks?Workload management
11. Does the business case include project costs and risks?: Identifies potential overloading of team members with multiple responsibilities.
12. Does the business case conform to organisational accounting standards (e.g. break-even analysis and cash-flow conventions)?These advantages make RACI matrices a valuable tool for smooth project execution and improved team performance.
13. Are the major risks faced by the project explicitly stated, together with any proposed responses?Potential drawbacks and challenges

How do you write a good business case?While RACI offers many benefits, some potential drawbacks and challenges may include:

A good business case must contain certain key information including:Time-consuming

• The reasons for doing the project;: Creating and maintaining RACI matrices can be labor-intensive and time-consuming
• The business options which have been considered, including the base business options of do nothing, so something, or do something else;Oversimplification
• Project and operational costs;: RACI may oversimplify complex projects and not capture all nuances
• Project and operational timescales;Rigidity
• Benefits, expressed in measurable terms;: The RACI framework can be rigid, leading to a lack of flexibility if not regularly updated
• Investment appraisal (or cost benefit analysis);Misinterpretation
• Major risks and their mitigation plans;: Team members may misinterpret their assigned roles in the matrix

How long is a business case?Resistance

A good business should be long enough that it contains all the information needed for the decision-makers to take an informed decision about whether to invest in the project. That means, remove any waffle, and only include information which helps decision-making.: Some team members may resist the structured approach of RACI