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Whatever your work or responsibility, it is likely that at some point you will need to make out a case for investment of resources in your area. But simply justifying your use of resources is not the best or even a good reason for building a Business Case. So what is

The REAL Benefit of a Business Case?

The purpose of a Business Case is primarily to help you create the best possible project, that will have the greatest chance of delivering the maximum value to the organisation.    Request our free White Paper - How to Build A Business Case for Learning & Development by e-mailing helen@3ctraining.co.uk

What happens when you ignore the real purpose?

A business case is nominally to help make a decision about allocation of resources. Frequently, others are making a decision about resources that you want or need to deliver business goals. However, if you focus on the case as purely a decision-making tool for others, you are ignoring the real benefit of doing it. Here are some traps to be aware of:

• You over-estimate the potential benefit of the project
• You under-estimate the costs of the project
• You under-estimate or ignore some of the risks involved
• You adjust the projects nominal goals in line with organisational objectives, while designing the project to meet other goals you consider more important or relevant

These approaches are very common in organisations with tight decision-making criteria. On the surface, it appears absolutely right that every project must fit the guidelines. However, when you design your Business Case only to show how you meet the needs of the organisation, you miss the point of doing the Business Case.

Here is an alternative approach:

1. Start with the organisational goals and not the project

Work from the top down. How does your project contribute to the goals? Is the project adding any other value outside the stated goals? Does the bulk of the value come from the benefits outside the organisational goals or is it directly in line with them? If the benefits are largely outside the stated goals you might re-consider the project. While it might seem locally important, it is diverting resources from delivering the main goals.

Using resources on projects that seem valuable in themselves but do not deliver the overall target, is one of the main reasons that organisations fail to deliver. It is not that a project was wrong or not worthwhile, it is more that the project was not focused on the prime drivers of the organisation. Project owners can get very upset that good projects are sidelined, but if the projects are not substantially aligned (and that means 75% or more of the benefits) to delivering organisational goals, then they are not a good use of resources.

2. Under-estimate the benefits

After you have valued the benefits, do a variation. Assume the benefits were halved, or came in a year later, or only reached a quarter of the target audience. Look hard at the real value.

Now, rather than throw the project out, look at what you can do in terms of project design to ensure that the benefits are really driven out. This might mean changing the speed of delivery, increasing follow up or using a different implementation method. Obviously, it depends on your project.

3. Over estimate the costs

What if costs doubled or tripled or a recurring cost appeared? Take the same approach – how can you design cost control into the project? How can you reduce initial costs or reduce risk costs? Would a pilot programme reduce the costs of the roll out? Would a pilot programme increase costs but reduce risk?

4. Look at risks

Be really tough on yourself about risk. What if the company is bought or sold, if strategy changes, if key people leave or if the project is only half completed? A half completed bridge is useless, where as a half completed language course may have considerable practical value. Use your risk analysis to help avoid, minimise or counter-act risk. This might increase initial costs, but improve the likelihood of driving out benefits.

Why Build a Business Case?

The purpose of building a Business Case is to get the best possible project, which in business terms means the maximum value for the least cost and risk. It is one thing to write a case that looks like this and another thing to actually build the case to deliver the result. In your case, you might want to highlight each design amendment or feature as it complements the aims of the business. You need to focus your project on delivering outcomes. The Business Case then explains how the outcomes are delivered and what they might be worth to the business.

By the time you have finished a really good Business Case, your project may look nothing like the original idea. Building the case is an integral part of project design and not an afterthought to get you the resources. If you approach it in this way, you will find all your projects deliver better results for the organisation at less risk.

We have just finished a new White Paper called ‘How to Build a Business Case for Learning & Development Programmes'. It is free. To get your copy simply e-mail a request to Helen@3ctraining.co.uk

The approach we outline in the White Paper can be readily adapted to all forms of human performance Business Cases and the tools can be used widely across many types of investment.

Find out more by joining our Topic Taster at the HRD exhibition in early April. The Topic Taster is free. More details can be found on the website www.3ctraining.co.uk

Management Voice Index
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