A business case is an essential business document that consists of the reasons for starting the project and evaluates the advantages, budget, cost, and risk factors associated with the project. There must be a business case for every project including a virtual project which shows the value of the work and has all the information related to the project. However, creating a business case is a complex process and requires great attention.
If you are an entrepreneur and are creating a business case, the below tips will surely help you do so.
1. Determine the benefits of creating the business case
The first step in creating a business case is to evaluate how it will benefit the team and the organization, which will motivate everyone working on the project. You can determine the advantages according to how and why the business case is being developed. For example, if you are developing a business case of a risky project it will help you in determining the alternate options in case of failures and problems.
2. Develop the case in accordance with the business strategy
Make sure that you show in your case how your project is in line with the business strategy and benefits the customer. There can be many advantages of the project but if its outcome doesn’t benefit the end customer, the project is considered irrelevant.
3. Determine the requirements of your intended audience
To complete a project successfully, it is very important that you know the needs and requirements of your target audience. You must first identify every individual the business case is for and then determine their requirements which will help you in developing your business case.
4. Figure out the best valuation method for your virtual project
There are many valuation techniques such as net present value, payback period, etc. each having its own advantages and disadvantages. For example, the advantage of the payback period is that it is easily understandable and you can compare it to other projects, however, it doesn’t take into account the time value of money.
These methods are the financial indicators and you must choose one or more which is appropriate for your project and organization.
5. Make sure to address the main features included in every business case
Every business case must highlight the benefits of the project and the calculations of costs such as future cost, one-time cost of implementing the new process, expected profit, and revenues, etc. You must ensure that your business case has all these contents.
6. Determine the costs of the current process
You must calculate the cost associated with your current process or system which includes the workforce costs, cost of maintenance of existing hardware and software, operating costs, the cost for innovation and competition. Keep in mind the workforce cost includes wages, overheads, training costs, etc. and make sure to include the missed opportunity as well.
7. Estimate the one-time expenses
Calculating the one-time costs associated with the project in detail will make your analysis more credible. Make a list of the main categories and their subcategories, and make sure to estimate the expenses for each and every subcategory. For example, capital costs include the costs for vendor training, hardware, software, installation services, etc.
8. Evaluate and highlight the advantages of the new system
To determine the benefits of implementing the new system:
· Compare the costs of the old system with the new one
· Mention the reduction in work
· Determine the time it takes to complete a certain task with the new system
· Define other process improvements
9. Anticipate the risks associated with the project
There are some risk factors associated with every project, make sure to evaluate your project to determine its risk factors and mention these in your business case. Take into account all the sources of risk and errors such as inferior organizational structure, etc.
10. Determine if there are any transfer of costs
Sometimes the costs of the new system are transferred to other groups, processes or departments, so remember to access if there are any costs transfer and include these to the cost of the new system.
Don’t forget to use these tips to create an effective business case for your project.
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