Business Cases · Business Analysis Notes

What it is#

In the BABOK® Guide, a business case captures the rationale for a project or other change initiative. As summarized in the Watermark study tables, it works through these elements:

Need assessment: the problem or opportunity, and why it matters now.
Desired outcomes: what success looks like, ideally measurable.
Assessment of alternatives: for each option, its scope, feasibility, assumptions, risks and constraints, plus a financial analysis and an estimate of value.
Recommended solution: the option to pursue, and why.

The BCS book adds that a business case is a living document. It is revisited at each decision point in the life cycle: after the feasibility study, after requirements analysis, after solution design, before implementation, and in a post-project review of benefits. At each point the question is the same: is this still worth doing?

This page covers the technique. For the full BCS treatment of feasibility, cost and benefit categories, investment appraisal (payback, net present value, internal rate of return) and benefits management, see Building a Business Case and Financial Justification.

When to use it#

When a decision-maker must approve, fund or prioritize a change.
When defining a change strategy and comparing ways to reach a future state.
When recommending a solution option, or assessing a major requirements change.
When planning the analysis approach, to scale analysis effort to what is at stake.
After delivery, as the baseline for measuring whether the expected value arrived.

When not to use it, or what to add: for small changes inside an already-approved budget, a short rationale in the backlog item is enough. A business case is only as good as its assumptions: the BABOK Guide warns that it can reflect its author’s bias, is often not updated once the initiative starts, and its cost and benefit assumptions may prove wrong. Use Financial Analysis for the numbers, Risk Analysis and Management for uncertainty, and Decision Analysis for complex trade-offs.

How to do it#

State the need from the organization’s point of view, with evidence of its impact.
Define desired outcomes as measurable objectives with dates.
Generate options, then shortlist. The BCS book suggests narrowing to three or four, since more cannot be analyzed in depth, and almost always including “do nothing”. Sometimes it really is best; if not, describing the consequences of inaction strengthens your argument.
Assess feasibility of each option. The BCS book uses three lenses: business (fit with strategy, culture and regulation), technical (performance, security, skills, compatibility) and financial (budget, funding, return, cash flow).
Estimate costs and benefits. Separate tangible items (you can put a reliable money value on them) from intangible ones. The BCS book advises naming intangible benefits clearly without inventing money values for them, and using conservative assumptions accepted in your organization.
Identify risks, assumptions and constraints for each option.
Recommend one option and state the decision you need.
Write a strong summary. The BCS book notes that the management summary is often the only part senior readers study: what was examined, the options with pros and cons, and the recommendation. It also suggests presenting benefits before costs.
Revisit the case at each decision point, and compare actual benefits with expected ones after delivery.

Example#

The Workshop (a fictional chain of 12 bike-repair shops) prepares a business case for online booking and repair-status notifications.

Need: front-desk staff spend much of their day on booking and status calls; customers complain they cannot find out when bikes will be ready.
Desired outcomes: most bookings made online within a year; status calls substantially reduced; no increase in front-desk headcount.
Options: (1) do nothing; (2) hire extra front-desk staff at the busiest workshops; (3) subscribe to an off-the-shelf booking service with notifications; (4) commission a custom system from the outside development team.
Assessment: option 2 is feasible but raises costs permanently and does not help customers outside opening hours; option 4 fits best but costs most and takes longest; option 3 is quick and cheap but integration with parts ordering is uncertain.
Recommendation: option 3 now, with a check after six months; revisit option 4 when parts ordering is in scope.

Template#

Template

## Management summary
What we examined, the options, the recommendation, the decision needed.

## Business need
Problem or opportunity; evidence; impact of doing nothing.

## Desired outcomes
| Objective | Measure | Target | Date |

## Options considered
| Option | Scope | Feasibility (business / technical / financial) | Key risks | Assumptions |

## Benefits and costs
| Option | Tangible benefits | Intangible benefits | One-off costs | Ongoing costs |

## Recommendation
Chosen option, rationale, next decision point.

Common mistakes#

Leaving out “do nothing” → include it, or reviewers will ask why it was ignored.
Inflating intangible benefits → name them honestly; invented figures undermine trust in the whole case.
Optimistic assumptions → use conservative, organization-standard assumptions and show sensitivity.
Forgetting business-side costs → include staff time for testing, training and transition, not only build costs.
A one-time document → revisit the case at each decision point and after delivery.
Writing for yourself → lead with the summary and the decision you need.

Sources and further reading#

IIBA. A Guide to the Business Analysis Body of Knowledge (BABOK® Guide), version 3. International Institute of Business Analysis, 2015. Technique 10.7 “Business Cases”.
Watermark Learning. BABOK v3 Study Tables. 2016. (study aid for the BABOK Guide): summary of technique 10.7, its elements, strengths, limitations and usage.
D. Paul, D. Yeates, J. Cadle (eds.). Business Analysis, 2nd ed. BCS, The Chartered Institute for IT, 2010. Ch. 13 (the business case as a living document, options, feasibility, structure, costs and benefits).