THE BUSINESS

CASE GUIDE.
5 STEPS TO DEVELOP A
SOLID BUSINESS CASE

www.chasegroup.com.au
 Chase Consulting Group
Melbourne
Victoria 3113 AUSTRALIA

ABN 3308899035
ACN 099528435
Internet: www.chasegroup.com.au

Dr Craig Peacock
Director
Chase Consulting Group
E: [email protected]
P: +61 412 71 4549

Copyright 2020 Chase Consulting Group Pty Ltd. All

rights reserved. No part of this publication may be
reproduced, distributed, or transmitted in any form
or by any means, or stored in a database or retrieval
system, without the prior written permission from
Chase Consulting Group.

www.chasegroup.com.au 2
About this Guide

01 What is it?
An executive guide on the planning and the steps for
developing business cases.

This is not a manual or workbook on the preparation,

evaluation and approval of business cases.

02 Why do I need it?

The process of developing a solid business case
is critically important for securing the approval for
innovations, projects and investments.

A well-executed process enables you to increase the

benefits and the value of the proposed investment,
and it reduces risks. It will also lead to a much greater
likelihood of securing support to proceed with the
investment.

03 Who is it for?
Organisations, executives and professionals.

Whether you are learning how to develop business

cases, proving that the business case is worth
it, determining the recommended solution, or
quantifying how much money, people and time will
be required, this guide is for you.

04 Who is it from?
This guide was prepared by Chase Consulting, a
leader in business cases, innovation and strategy for
organisations.

www.chasegroup.com.au 3
Content
03 About this guide.

05 What is the business case?

06 A business case is different to the business plan.

08 Why create a business case?

10 Types of business cases?

12 The business case document.

16 5 Steps to developing a solid Business case.

Confirm the opportunity

Analyse and develop shortlisted options
Evaluate the options
Implementation strategy
Recommendation

19 Case study

21 Conclusion

23 How can we help.

www.chasegroup.com.au 4
01 WHAT IS THE
BUSINESS CASE?
It is becoming increasingly important for the board and senior
management to focus on investments that deliver true business
value. Initiatives throughout the business, including innovations;
business ventures; factory relocations; new products and
services; and IT investments, are accepted or rejected based on
the business value they deliver.

To get the board or management to approve a project, it is necessary to

build a business case that demonstrates why the project is needed and
what the benefits of the project will be when it is finalised.

The reasons and benefits of a project may seem perfectly obvious to you
and others who are intimately involved with it, however, to stakeholders and
other decision-makers it may not be so obvious.

Often they are dealing with a myriad of different business units and objectives
and tasks which need to be done. A well-prepared business case can help your
project standout amongst the competing priorities within the organisation
and may be the key to getting approval and finances for the project.

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02
A BUSINESS CASE IS
DIFFERENT TO THE
BUSINESS PLAN.
A business case answers the question:

“what will happen if we proceed with this investment decision?”

The justification for the business case is presented in a carefully constructed

document detailing the rationale to convince a decision-maker to approve
the investment recommendation.

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02 A Business Case is Different
to the Business Plan.

THE FUNDAMENTAL QUESTIONS TO CONSIDER IN

DEVELOPING THE BUSINESS CASE ARE:

Which of the alternatives should we invest in to generate the most

value for the organisation?

o Are other alternatives more profitable?

o Will this investment deliver benefits of high value?

Is it strategically the best approach?

Should the organisations consider investing at all in this proposal?

The practical question must also be addressed: can the business

proposal be implemented as planned, delivered to time and
budget and produce the expected benefits?

The making of a business case will carefully examine the benefits

and risks involved proceeding with the recommendation; the
alternatives and the benefits of the recommendation; and the
risks of not proceeding.

A strong business case will make a compelling recommendation for

implementation.In comparison, a business plan is a documented
set of business goals, objectives and strategies that an organisation
is aiming to achieve over the next three to five years.

The business plan includes market information, customer

segmentation, products and services, sales forecasts and cost
estimates, and financial forecasts.

The business case is a process to critically examine the

opportunities, alternatives, project stages, and financial
investment to make a recommendation for the best course of
action that will create business value

A BUSINESS CASE IS DIFFERENT TO THE BUSINESS PLAN www.chasegroup.com.au 7

03
WHY CREATE A
BUSINESS CASE?
Preparing the business case enables you to take a disciplined
approach to critically examine the opportunity, the
alternatives, the project stages and the financial investment
to make a recommendation for the best course of action to
create the business value.

When the time is taken to develop a solid business case,

the investment proposal is much more informed. In turn,
this will increase the benefits and value of the project and
reduces the risks. There is also a much greater likelihood of
securing support to proceed with the investment.

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03 Why Create a Business Case?

A business case is required when you need to:

01 DEMONSTRATE.
Demonstrate the value of a proposed innovation,
product or service would generate for your
organisation.

02 OBTAIN.
Obtain board approval for investment.

03 DECIDE.
Decide whether to outsource a particular function.

04 RELOCATE.
Relocate business operations and manufacturing
facilities.

05 PRIORITISE.
Prioritise projects within your organisation that
are competing for funding and resources.

06 SECURE.
Secure financial funding and resources
to implement the project.

By well-documenting the business case, you be able to

proficiently present the recommendation to stakeholders
whose support is required for approval.

The documented business case will provide confidence

and a level of certainty that the considered proposal will be
successful.

WHY CREATE A BUSINESS CASE? www.chasegroup.com.au 9

04
TYPES OF
BUSINESS CASES
The required depth of analysis that is documented in support of your case
will be based on the size and complexity of the investment decision.

“The business case for an investment of $5m

or less is much simpler than the business
case for an investment of $500m or more.”

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04 Types of business Cases.

The business case sets out a The business case should be

justification for the investment that prepared early in the project before
would be required by a potential any decision has been made to
investment. initiate.

For large investments and high-risk It allows the organisation to explore

projects, a preliminary business is often the high-level options for meeting
prepared as the first step in preparing business requirements. This may
the full business case. include an assessment of comparable
projects.
It is used to decide whether the potential
project merits being investigated in Experienced organisations may have
more detail. in-house expertise allowing them to
prepare a business case. However,
For example, the preliminary business some organisations will not have
case may include cost estimates that the full range of skills required and
have a 20% tolerance, whereas the full may wish to appoint an independent
business case would include costings management consultant to assist
with less than 10% tolerance. them.

“PREPARE THE BUSINESS CASE

EARLY IN THE PROJECT”

TYPES OF BUSINESS CASES www.chasegroup.com.au 11

05
THE BUSINESS
CASE DOCUMENT
What should THE business
case EXPLAIN?

What is the business case structure?

Need business case templates?

www.chasegroup.com.au 12
 THE BUSINESS CASE DOCUMENT

A business case document should explain the following:

01 Key objectives.

02 Outline the business need.

Provide relevant background and supporting information

03
to put the investment into context.

Describe how the investment aligns with the

04
organisation strategic business plan.

Provide a robust estimate of the whole-of-life

05
costs of the investment, and its financial benefits.

06 Estimate the non-financial benefits of the investment.

Describe the approach to be used, including

07 timelines, resources, the procurement strategy
and governance.
Rigorously assess the inherent risks, including
08 how they are likely to affect the investment and
outline strategies for mitigating them.

Convey the level of uncertainty surrounding the

09
proposal.

Provide options for the board and management

10
to consider in reaching a decision.

THE BUSINESS CASE DOCUMENT www.chasegroup.com.au 13

 WHAT IS THE BUSINESS CASE STRUCTURE?

In our 20 years of experience developing successful business

cases, all business cases have a consistent structure of:

01 Executive summary

02 Project definition

03 Business requirements

04 Evaluation of options

05 Recommendation

06 Strategic logic of the project

07 Benefits

08 Risks

09 Project stages & duration

10 Financial analysis

11 Estimate of project team resources

12 Project authorisation

THE BUSINESS CASE DOCUMENT www.chasegroup.com.au 14

 NEED BUSINESS
CASE TEMPLATES?
A business case workbook can guide you through the
process of producing the Business Case document.

The templates detail the key information you will need

in the business case document and provides valuable
tips and insights.

A proven business case

template is the catalyst
for bringing more rigour
to the development of
business cases.

Chase’s Business Case Workbook

and Templates can help you, and your
organisation develop high-quality
business cases.

Get Me the Workbook Details.

THE BUSINESS CASE DOCUMENT www.chasegroup.com.au 15

06 FIVE STEPS TO
DEVELOPING A SOLID
BUSINESS CASE.
The process of developing the business case is important; a well-executed
process enables you to develop a solid business case that increases the benefits
and value and reduces the risks. This also leads to a much greater likelihood of
securing support to proceed with the investment.

5 steps to delevop a solid business case

Step 1: Confirm Step 2: Analyze Step 3: Evaluate Step 4:
Step 5:
the opportunify and develop the options
Table 1 Implementation
Recommendation
shortlisted options strategy

1.1 Launch the business 2.1 Identify the alternative 3.1 Analyse how the 4.1 Create the implementation 5.1 Confirm the recommended
case project. approaches alternatives will affect plan for the recommended option
the business objetives option
1.2 Confirm the business 2.2 Select three of four 3.2 Select the preferred - How will you achieve 5.2 Document the business case
opportunity
options to analyse option, taking into your goal,
- Project definition / scope
- Invest logic account the strategic - Who will be accountable - Strategic benefits
2.3 Gather information and financial value for each milestone,
- Financial benefits
about each alternative created and the risks - How will you mitigate the - Non financial benefits
1.3 Specify the high level 2.4 Analyze options and project risks - Fit with the corporate strategy
business requirements develop shortlisted - Implementation approach
options - Risk
- Financial analysis
5.3 Present business case for
approval

www.chasegroup.com.au 16
06 Five Steps to Developing
a Solid Business Case

01 Step 1: Confirm the opportunity

Take the time at the beginning of the process to critically examine the business need and
outcome, including the competitive environment, the strategic fit, the specific business
needs and scope.Describe the situation and the business opportunity that your proposal
will impact. This will include the background to project, the investment logic and the high-
level business requirements.

02 Step 2: Analyse and develop shortlisted options

Identify the alternative approaches and select three or four options to analyse. Gather
information about each alternative, analyse the options and develop the shortlisted
options.If you have identified more than four options, rank the options from possible to
not likely. This will be different in every organisation.

Consider them from different viewpoints, the opportunities that will accelerate the growth
of the organisation, the long-term strategic direction, what might disrupt your industry or
sector, your front-line staff, key stakeholders and from your customer’s perspective.

03 Step 3: Evaluate the options

Evaluate how the alternatives will deliver on the business objectives, then select the
preferred option, taking into account the strategic and financial value created and the risks.
What is the cost-benefit analysis? The cost-benefit analysis is the estimation and
evaluation of net benefits of the recommended business case option. It is a critical section
of the business case.

The benefits include:

· Financial benefits
· Strategic benefits
· Other organisation and societal benefits

FIVE STEPS TO DEVELOPING A SOLID BUSINESS CASE www.chasegroup.com.au 17

06 Five Steps to Developing
a Solid Business Case

04 Step 4: Implementation strategy

Create the implementation plan for the preferred option, detailing how to achieve the
business objectives, who will be accountable for each milestone, and how to mitigate the
project risks.

Even the most carefully

planned project can run
into trouble. No matter how
well you plan, your project
can always encounter
unexpected problems.

Risk planning helps identify the

potential problems that could cause
trouble for your project.

The implementation strategy enables you to start quantifying the how much money,
people, resources and time is required to implement the project and deliver the strategic
and financial benefits.

05 Step 5: Recommendation
Confirm the recommended option. Create the business case documents and present
the business case recommendation to the board and management team for approval to
proceed.

You will need to complete all of these steps to create a high-quality business case.

The process of developing a solid business case is critically important for securing the
approval for projects and investments.

A well-executed process enables you to increase the benefits and the value of the proposed
investment, and it reduces risks. It will also lead to a much greater likelihood of securing
support to proceed with the investment.

FIVE STEPS TO DEVELOPING A SOLID BUSINESS CASE www.chasegroup.com.au 18

07
CASE STUDY:
Opportunity:
A leading international chemical distributor was looking
for a demand planning and forecasting system to
improve inventory management, reduce supply chain
costs and make better purchasing decisions.

APPROACH:
Chase Consulting developed the business case for their
demand forecasting system project.

The project identified the critical organisational

requirements, short-listed suitable vendors, modelled
the financial benefits as part of the business case, and
developed the implementation plan.

CASE STUDY www.chasegroup.com.au 19

07 Case study.

25% Results:
Our client reduced their inventory by
Inventory over twenty-five per cent; $3m better
than projected in the business case,
Reduction while simultaneously achieving a ten
per cent growth in sales.

The business managers who are

$3m
responsible for ordering and managing
stock, use their industry and market
knowledge along with the demand
forecasting system recommended
order quantities and timings to make
better purchasing decisions.
Better than
projected One flow-on effect of the
implementation has been a reduction
of aged stock by over fifty per cent.

The client gained direct benefits

10%
from the systemised purchasing
procedure.

In conjunction with improved

forecasting accuracy, they can
produce accurate and timely
Growth in purchasing plans that can be easily
sales adapted to the changing conditions of
the business.

CASE STUDY www.chasegroup.com.au 20

08
CONCLUSION.
“The weakest part of the business
case process can create havoc in
meeting the timelines for approval.”

www.chasegroup.com.au 21
 BEING TOLD THAT THE FINANCIALS,
ESPECIALLY THE OPERATIONAL
COSTS REQUIRED TO EMBED AND
SUPPORT THE INNOVATION INTO
“BUSINESS AS USUAL” OPERATIONS,
HAS BEEN UNDERDONE CAN BE
DISAPPOINTING AND DISCOURAGING.
It also means going back, redoing work that has been
previously done, reengaging with key stakeholders, partners
and suppliers. Rework creates significant time pressures and
stress you don’t need as you frantically prepare for the next
decision-making cycle.

Remember that value is only realised when the innovation or project

is fully embedded into the organisation as “business as usual”.

Take time upfront and at key milestones to plan, identify

and evaluate the underlying assumptions and key risks. The
investment proposal will be much more informed. In turn, this
increases the benefits and the value of the project and reduces
the risks. Plus, there is a much greater likelihood of securing
support to proceed with the investment.

Help us improve this guide.

How could this guide have been better? Let us know! From time to time, we revise
our guides, and your input will help us help you in the future. Email us at info@
chasegroup.com.au

CONCLUSION www.chasegroup.com.au 22
09
HOW WE CAN HELP.
Chase Consulting has been developing business cases for over 20 years.

We have helped organisations develop business cases to secure equity

investments, government grants, board and management approval for
innovations, projects, start-ups, and scaling up organisations.

www.chasegroup.com.au 23
 Business Case Workbook and Templates

The Business Case Workbook is an essential guide

for busy professionals. The workbook guides you
through the process of producing the Business
Case. It provides all the templates to develop a
compelling business case.

GET DETAILS

Business Case Starter Kit

The Business Case Starter Kit is the essential pack

to kick start you on your business case journey. It
contains the Business Case Workbook, Templates
and your 30-minute Coaching Session.

GET DETAILS

Business Case Coaching

The business case program teaches you how to

develop successful business cases for innovation
projects. The business case coaching program is
designed to create high-quality business cases. It
will take your business case to the next level and
save you time.

GET DETAILS

HOW WE CAN HELP www.chasegroup.com.au 24

 To find out how Chase Consulting can help you develop
high-quality business cases, contact us:

ABN 3308899035
ACN 099528435
Internet: www.chasegroup.com.au

Dr Craig Peacock
Director
Chase Consulting Group
E: [email protected]
P: +61 412 71 4549

HOW WE CAN HELP www.chasegroup.com.au 25

 Chase Consulting’s Business Case Coaching program
can help your organisation develop high-quality
business cases that secure the financial funding and
resources to implement projects.

NEED HELP IMPROVING YOUR

BUSINESS CASES?

The Business Case coaching sessions is the essential

program to kick start you on your business case journey.

Let’s explore how we can help.

REQUEST YOUR FREE

CONSULTATION
https://chaseconsulting.com.au/business-case-contact-us

HOW WE CAN HELP www.chasegroup.com.au 26