The business case should be where you capture, not lose, value
You can miss 25% or more of the project’s potential value in the business case by not identifying the true business outcomes and all of their benefits.
That’s a quarter of the potential value gone before you start!
Although business cases have been around for a while they are probably the most misunderstood of project documents.
Understanding the business case
People think they’re financial documents – they are not, they’re strategic documents, intended to show how each potential investment contributes to the delivery of the organization’s strategy.
People also think that business cases exist to justify the project’s costs – this is also wrong, they exist to capture the project’s value proposition and then its cost of delivery.
But, as a result of the misunderstandings in relation to business cases, few business cases effectively measure a project’s strategic contribution or capture the project’s full value proposition. These gaps and failings directly lead to massive value loss through missing many of the potential benefits.
Your approach determines your results
Think about it – if you see the business case as justifying the project’s costs, then the only type of benefits you’ll consider are financial benefits (to offset the financial costs).
But when you see the business case as capturing the total value proposition all types of benefits - customer, competitive, capability, productivity and risk-reduction benefits - are all valid. Many of these (usually ignored benefits) can subsequently be converted into quantifiable financial benefits greatly increasing the financial value of the project.
Most business cases in use today still inadvertently destroy value. Business cases and business case processes need to be value focused to ensure if they deliver, not destroy, value. A good place to start is by defining a full Value Equation.