Project

Business Case

Sheikh Morshed Jahan

Professor
IBA, University of Dhaka
What?

Establishing justification for undertaking a project …

Financial
Operational
Managerial
Technical
Strategic
Environmental
Social
Legal/regulatory
Political
Why?
To ascertain whether a problem or opportunity warrants a
response
To identify and select the best alternative to resolve an
agreed upon problem
To identify and select the best way to exploit an agreed
upon opportunity
To asses the justification of executing a project
To gain formal approval to proceed with a proposed
project
To compare options for a project that has already
received funding
To choose between projects competing for limited funds
Benefits?
Verify strategic alignment
Promote understanding of the project
Promote consensus among stakeholders
Support sound risk management
Forced decision makers to follow a format
that ensures all relevant factors have been
considered as objectively as possible
When?
Investment size is substantial
Project has broad stakeholder base
Widespread understanding of the project is
valuable
Buy-in and commitment are critical success
factors
Avoiding resistance and non-compliance
High level of uncertainties exists in the project
Project benefit stream is complex
Who prepares?
Lead author/sponsor/project manager
Supporting author/sponsor/future project
team members
Financial experts, with organizational
knowledge
Analysts/researchers
Subject matter experts
Stakeholders
Business Case Development
Process

Prepare and
present the
Develop case
preliminary
Determine the project plan
best/most
Identify appropriate
alternative option
Define & courses of
analyze action
Identify
business
initiative
Critical success factors in Business
case Development
Identify all costs and benefits
Effectively translate soft (intangible) benefits
Involve the right people
Ensure impartiality
Use assumptions appropriately
Descriptivr
Reasonable
Visible
Used only when needed
Qualities of a well-prepared business
case
Thorough
Unbiased
Quantitatively focused
Logical
Clear and understandable
Conclusive
Compelling
Recommended business case
structure
1. Front Matter/Administrative Details
2. Executive Summary
3. Situational Assessment
4. Alternatives Assessment
5. Risks & Sensitivity Analysis
6. Contingencies & Dependencies
7. Implementation Strategies & Action Planning
8. Summary, Conclusion & Recommendations
Project Business Case(financial analysis)

Video …
https://www.youtube.com/watch?
v=yJMqj0tkas8

Team Exercise …
Hand-out on NPV, IRR, …
Other Approaches to Project Selection
Scoring
Weighted
Non-weighted
Non-numerical
Sacred Cow
Competitive Necessity
Operational Necessity
Q-sort