Business

cases
made simple

◗ Introduction 3
◗ Aims of the business case 4
◗ Writing the business case 5
◗ Gaining support for the business case 11
◗ Updating the business case 14
◗ Conclusion 15
◗ References and further information 16

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 Acknowledgements
This guide was produced with help from the partners and staff at Sayer
Vincent, as well as support from staff and trustees of CFDG.

CFDG (Charity Finance Directors’ Group) is the professional body for

finance directors within the sector, and has nearly 1,600 members. CFDG
provides assistance to charities on a range of issues, such as accounting,
taxation, audit and other finance-related functions. CFDG’s mission is to
deliver services that are valued by members and enable those with financial
responsibility in the charity sector to develop and adopt best practice.
For more information go to www.cfdg.org.uk

sayer vincent Sayer Vincent only works with charities and not-for-profit organisations.
consultants and auditors
Our work focuses on making charities more effective through improved
infrastructure, reporting and governance. We help charities with mergers,
systems implementations and training. Charities appoint us as consultants,
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you to find effective solutions to them.
For more information, go to www.sayervincent.co.uk

Published by CFDG
First published 2009
Copyright © CFDG and Sayer Vincent
All rights reserved

No part of this book may be reproduced by any means, or transmitted,

or translated into a machine language without prior permission in
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source must be given.

CFDG and Sayer Vincent shall not be liable for loss or damage arising
out of or in connection with the use of this publication. This is a
comprehensive limitation of liability that applies to all damages of any
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Introduction

We all make decisions every day. These may be very simple, like
whether to have cereals or toast for breakfast. Or they could be more
complex, such as resigning from a job to return to studying with a
future goal in mind. Life is full of decisions and many of them contain
elements of uncertainty.

For an individual, decisions may be made based on past experiences or

advice from friends and family. A decision about what to have for
breakfast could be instantaneous based on what you find in the
cupboard. But some decisions may involve taking time to gather
information and attempting to balance the positives and negatives.

For organisations, decisions involving investment in IT tend to be of the

complex variety. The decision is likely to affect current and future
activities. A business case is a document that describes the need for
change and projects that will enable the change. Implementing projects
requires resources to be invested, including management and staff time
and money. There are many competing demands on an organisation’s
resources and some projects may not be worth this effort. Documenting
the need for change and how the change will be achieved in a business
case provides senior managers and trustees with information to
evaluate the project and understand the impact the project will have on
the organisation.

The business case also provides the framework for the approved project
and organisations refer to it throughout the project when people
suggest changes – typically to the scope of the project, timescale or
costs. It is helpful to review and update the business case at key points
to make sure that the reasons for the project are still valid and that it is
achieving what it set out to do.

This guide is to help you put together business cases to support good
decision-making, particularly for investment in IT. It suggests ways
which may help provide a structure to the decision-making process, and
for presenting this information in a way that makes decision-making
easier. A sound business case will help secure commitment and
engagement across the organisation and ultimately lead to a greater
chance of success for the project.

Business cases made simple 3

 Aims of the business case

When an organisation faces a major decision, it is important that all the

relevant information to enable the decision to be made is gathered
together into a coherent business case. The main purpose of a business
case is for you to:
• Explain the reasons for the change and proposed project(s) to enable
the change – and why it is worth investing in this
• Give reassurance that staff and volunteers involved can manage the
project
• Gain support and commitment to the change and project at senior
levels.

The business case is a living document and you’ll use it during the
project to:
• Monitor progress
• Confirm whether any requests for changes are in scope
• Evaluate the key outcomes
• Confirm that the project continues to justify the effort and resources
being used.

Use of the business case throughout the project

Agreeing the project Key stages Completion
• Will the proposed project or • Are the objectives still • Has the project delivered
investment help our valid? the changes identified and
organisation meet its • Is the project still meeting the expected outcomes and
strategic objectives? the objectives? deliverables?
• Do we have the information • Do we need to update any • What lessons have we
to take an informed sections of the business learned to improve how we
decision about the case with additional produce, monitor and
proposed change and information? update the business case
investment required? for future projects?
• Is the proposed change
worth the time and cost
involved?

Business cases made simple 4

 Writing the business case

Usually a small group of people or one member of staff will write a

business case. The format of a document setting out a business case
can vary, and your organisation may have specific information
requirements for decision-making, but if the following components are
present, it will form a good basis for a collective decision.

Section Purpose for decision-makers

1 Introduction States the aim of the business case – the proposed change and
purpose of the project

2 Reasons Explains current issues and why the project is needed

3 Key outcomes and Highlights the expected immediate and long-term benefits of the
success criteria change

4 Options and costs Outlines the main options for addressing the issues, including
summary costs

5 Recommendation Expands on and justifies the recommended solution

The following sections are written based on the recommendation

6 Impact analysis Presents an assessment of the impact of the project on the

organisation including financial and cultural impact, and an
assessment of the organisation’s capability and readiness to carry
out the project

7 Risk assessment Summarises the key risks and how they will be managed

8 Outline plan Gives a high level plan of main activities, timescale and key decision
points

9 Project governance Shows how the project will be structured and levels of decision-
and organisational making; also includes any standards that need to be considered
standards

The document has a logical sequence:

1 Introduction
This is a short section that gives the aim of the business case. It
summarises the change and how this will be achieved. It can also
include the purpose of the business case, how it is structured, how and
when it was compiled, how it should be used, how it relates to any
other documents that have already been produced, and how it will be
updated as the project progresses.

Business cases made simple 5

Key questions to answer in this section:
• What is the proposal?
• What is the scope of the change?
• What will be the main output?

Example
Currently you’re managing supporter contact details using an Access
database developed in-house, spreadsheets and paper records, and
you’d like to communicate with supporters more frequently and
efficiently. You expect to achieve that by using a new database; this
will involve a project to select and implement the database.

2 Reasons
This section explains the background to the proposed project, including
any work that you’ve carried out already. It is important to summarise
the strategic issues that the proposed project will address. You may
have supporting material gathered from meetings and workshops with
staff and volunteers and you could include this as an appendix.

Key questions to answer in this section:

• What is the problem you are trying to solve?
• What change is needed?
• Why does this need to happen now?
• What are the implications if your organisation doesn’t carry out the
change?

Example
Various members of staff are keeping their own records and some
supporters receive letters – often with similar information from
different people about your work. You need to manage
communications with supporters so that they remain committed to
your organisation. You are concerned that if you don’t change then
you will lose supporters.

3 Key outcomes and success criteria

This section describes the key outcomes and main benefits anticipated
from the change or decision. The benefits may be tangible and
quantifiable but could also be intangible. Where possible it is helpful to
provide measures which will be used during the project and afterwards
to assess the impact of what the project has achieved.

Key questions to answer in this section:

• How will the change contribute to the achievement of the strategic
objectives?
• Are there any services or events that are dependent on the
successful outcome of the project?

Business cases made simple 6

• What are the benefits – during and at the end of the project, and
longer term?
• What are the key success criteria? How will you know that the
project has achieved its aims?

Example
Overall benefits of your organisation having one system for supporter
information could be that you are able to build up a picture of your
supporters and manage communications with them more efficiently.
This could be measured by ensuring that all information is held in the
database and you receive fewer complaints.

4 Options and costs

This section describes the main options for addressing the issues. You
should examine each option in turn, as objectively as possible, and set
out:
• An overall description of the option
• An analysis of the extent to which the option could be expected to
achieve the key outcomes
• The inherent strengths of the option and the opportunities which the
option might present to the organisation
• The inherent weaknesses of the option and any risks to which the
option would expose the organisation
• The resourcing implications for the organisation, including:
– The likely implementation timescale
– The demand for staff/volunteer involvement
– The indicative external costs
– The likely on-going maintenance costs

Key questions to answer in this section:

• What are the main characteristics of each option?
• What is the timescale?
• What would be the internal and external costs?
• What are the pros and cons of each option?

Example
When considering purchasing a new database, options could include
developing your current database, carrying out a new bespoke
development or procuring an off-the-shelf, package-based solution.

5 Recommendation
This section describes the recommended option, including a summary
of the reasons why it is the most likely to achieve the key outcomes.

Key questions to answer in this section:

• Why is the recommended solution the best one for your organisation?
• What assumptions are you making?

Business cases made simple 7

 Example
You may decide that the best option is to purchase an off-the-shelf,
package-based solution. You explain that the reasons for this
recommendation include having on-going support and maintenance
for the database. You assume that there are software packages
available that will meet your organisation’s needs.

6 Impact analysis
This section aims to provide an overall assessment of how the change
and the project will affect your organisation. The areas to consider
include:
• Financial impact: detailed costings for the project and budget
required, and expected return on investment
• Cultural impact: any change to, or reinforcement of, the
organisation’s values and approach
• Capability: an assessment of the organisation’s ability to carry out
the project in the proposed timescale, previous experience of change
projects, and overall commitment to the change

In this section you will need to include summary financial forecasts,

explaining the key assumptions you have made. You may include more
detailed financial forecasts in the appendices.

When considering the impact, it’s important to be aware of any

activities that will be affected during the project – for example, if staff
are helping with the project, does that affect their ability to carry out
their day-to-day responsibilities? You should also highlight any cost
savings as a result of the change.

Key questions to answer in this section:

• Do the benefits outweigh the costs?
• What is the financial impact of this decision?
• How much initial funding will be required?
• How will it affect the longer-term finances of the organisation?
• Will the change affect the values of the organisation?
• How does this affect overall ways of working (e.g. changing from
working in small offices to an open plan office)?
• Do people accept the change and will they be committed to it?
• What experience does the organisation have of this type of project?
• What lessons can be learned from previous projects?

Example
The financial forecasts include probable one-off costs such as new
equipment and software licences, and probable recurring costs, such
as support. You also include likely notional costs including time
required from staff and volunteers in selecting the database and
project activities.

Business cases made simple 8

7 Risk assessment
This section summarises the key risks that you’ve identified. The risks
cover those that could arise from the change, and those related to your
organisation’s ability to carry out the project. The section should refer
to a risk register which will analyse each risk in terms of likelihood and
of the degree to which the risk would, if realised, prevent any of the
key outcomes from being achieved. The risk register will record the
overall response to managing each risk and suggest mitigating
countermeasures should the risk be realised. You should also consider
any opportunity risks.

Key questions to answer in this section:

• What are the risks involved?
• What are the consequences of them materialising?
• Do you have contingency plans to help you deal with these risks?
• What opportunity risks might arise too?

Example
You identify the risk that staff may not have the time to help with the
project and that this could lead to delays. To manage this, you
identify the need to recruit temporary staff to work on the day to day
administration to free up staff time, although this will obviously have
cost implications and will therefore need to be factored into the costs
section.

8 Outline plan
This section is a high level project plan showing the main activities and
the overall timescale for the project, through to achievement of the key
outcomes. It’s helpful to divide this into stages. You should also make
sure that you include activities to manage the risks you’ve identified.

Key questions to answer in this section:

• What is the timetable for any decisions and the major stages of this
plan?
• Which staff and volunteers would need to be involved in the project,
how much time would they need to spend, and when?

Example
You identify the key stages as selecting the new database, purchasing
the equipment, developing the database, and staff/volunteer training.

9 Project governance and organisational standards

This section describes the governance framework (e.g. steering group,
project management, project team) that will support the project during
the subsequent stages. You could look at this in later stages after the
business case has been agreed. However, it is particularly useful to

Business cases made simple 9

consider project governance at this stage if your organisation is not
used to a structured project management approach, or if there are
particular requirements that would impact significantly on the project’s
success – such as involvement of trustees.

The section may include:

• The proposed roles and responsibilities in the project
• The proposed project tolerances (e.g. how much timescales can be
changed before a meeting/decision is required)
• How people will make decisions in the project

You should also record any organisational standards that will apply,
such as ISO or procurement requirements.

Key questions to answer in this section:

• Who is sponsoring the project?
• What roles and responsibilities will staff, volunteers and external
suppliers have on the project?
• How will key decisions be made?
• Are there any standards that we need to take into account?

Example
You have identified the need for a small steering group for the
project, made up of senior managers whose area of responsibility
will be affected by the new database. You identify their
responsibilities and the need for them to meet when key decisions
will be made.

Business cases made simple 10

 Gaining support for the business case

The findings of proper consultation or research will be valuable in

supporting a decision that involves a long-term commitment or a
significant change in direction for the organisation. Sometimes
gathering information for the business case can be the easy part – it
can be harder to persuade people that the change is worth the effort. It
helps if you identify the “stakeholders” in the change project – they are
the people who have an interest in the project and can affect its
outcome – and discuss the project with them while you’re creating the
business case.

A good test is to consider the questions a sceptical friend might ask

and try to answer them as you write it. For example:
• What evidence do you have to suggest that there is a problem?
• How will what you propose address the problem?
• Have you tested your suggestion in a small way to see if your theory
is valid?
• What will you do if beneficiaries or funders do not like your proposal?
• Have you checked whether they consider this to be an appropriate
course of action?
• Do people support your idea?

It’s useful to list the different groups of people who will be affected by
the change and, at a high level, what types of interest they’ll have in
the project. You can map this on a chart or table.

Example outline stakeholder map

People impacted Support needed

Decision- Service Provide Work on Provide

making changes resources project funding

Trustees ✓ ✓

Senior management ✓ ✓ ✓

Staff (you could break

✓
this down by team)

Volunteers ✓

Donors ✓

Beneficiaries ✓

Business cases made simple 11

 You can then start to identify what you can do to inform them about the
change, gauge whether they’re likely to be supportive or sceptical, and
what you can do to build up their commitment. There are various ways
to do this – through individual meetings, workshops, presentations,
email and other communications.

Section Purpose for decision-makers Involvement of stakeholders

1 Introduction States the aim of the business

case – the proposed change
and purpose of the project

2 Reasons Explains current issues and Meetings and workshops to:

why the project is needed • Understand the issues and need
for change
3 Key outcomes and Highlights the expected
• Identify the benefits
success criteria immediate and long-term
• Agree the critical success factors
benefits of the change

4 Options and costs Outlines the main options for Workshops with potential suppliers
addressing the issues, to identify possible options
including summary costs

5 Recommendation Expands on and justifies the Workshops to discuss the options and
recommended solution identify the preferred solution(s)

The following sections are written based on the recommendation

6 Impact analysis Presents an assessment of the Meetings with finance staff and the
impact of the project on the treasurer to agree format for financial
organisation including financial information and to help provide
and cultural impact, and an information, e.g. on internal costs
assessment of the organisation’s Meetings with senior managers to
capability and readiness to carry discuss resource requirements and to
out the project gauge commitment to the change
7 Risk assessment Summarises the key risks Meeting with potential team
and how they will be managed members

8 Outline plan Gives a high level plan of main Meetings with staff to find out about
activities, timescale and key future events and meetings so that
decision points the plan can dovetail with these if
possible

9 Project governance Shows how the project will be Meeting with potential teams to
and organisational structured and levels of agree terms of reference and ways
standards decision-making; also includes of working
any standards that need to be
considered

Business cases made simple 12

It’s worth the effort in building up a good relationship with decision-
makers so that they have a good understanding of what you’re aiming
to achieve, and will trust and support you throughout the project. By
involving stakeholders you’ll help them build up ownership and
commitment to the change.

Key questions to answer:

• Who will this decision affect?
• What will be the impact on beneficiaries, staff, donors and others?
• Have you asked them about this decision or researched the effects on
them?
• What support will you need from them?
• What actions do you need to take to gain this support?

Business cases made simple 13

 Updating the business case

After the project has been approved, you’ll find that the business case
needs to be updated with new information. You’ll need to review the
document to make sure that it’s still relevant – that the needs and the
solution are still valid. Senior managers will want confirmation that the
project is still viable and achievable and that the investment is still
worth it.

In practice, it’s worth identifying key review points – at the end of

stages and when further decisions are required. The sections that are
likely to change more frequently are shown in the table below.

Section Updates and changes during project

1 Introduction

2 Reasons

3 Key outcomes and If the expected benefits are no longer achievable, then review whether
success criteria the project should be changed or closed

4 Options and costs

5 Recommendation If the chosen solution will no longer meet the needs, consider whether
the project is still viable or needs to be changed with an alternative
solution

Update to reflect any change in scope

The following sections are written based on the recommendation

6 Impact analysis Update to reflect any increases/ decreases in cost and any changes
that affect the organisation’s ability to complete the project

7 Risk assessment Include new risks identified and their management

8 Outline plan Update with new activities, changes in dates and tasks that address
new risks

9 Project governance Reflect any changes in team roles

and organisational
standards

Key questions to answer:

• Has the scope of the project changed?
• Has the resourcing changed?
• Have any of the risks been realised?
• Are there any new risks?
• Have we identified any new activities?
• Do we need to make changes to the project team?
• Is the project still meeting its objectives?

Business cases made simple 14

Conclusion

We all make decisions every day. However, for organisations, the way
in which decisions are made and ensuring that all risks in respect of a
particular decision have been considered, including financial risks, can
be critical to their long-term survival.

While a risk can be a threat to an organisation, an appropriate level of

risk-taking may also create opportunities. Using a structured approach
to discussing and categorising risk within your organisation, together
with the appropriate tools to assess any financial risk, should enable
decision makers to be presented with a coherent business case,
allowing an informed decision to be made.

The construction of the business case for a proposed activity is an

important and valuable process in itself. It can greatly enhance the
quality of the project plan and ensure that you have support for the
project before the implementation begins. You will then need to review
the business case at key stages to make sure that the project remains
viable and is still achieving its objectives. You’ll use it at the end of the
project to compare achievements against the original aims.

Business cases made simple 15

References and further information

Business case
OGC (Office of Government Commerce)
www.ogc.gov.uk/documentation_and_templates_business_case.asp

Business case template guidance

BERR (Department for Business Enterprise & Regulatory Reform)
www.berr.gov.uk/aboutus/corporate/projectcentre/pm-templates/
page13161.html

Business case: auditor’s guide

I&DeA (improvement and development agency)
www.idea.gov.uk/idk/core/page.do?pageId=5820981

Charity Commission
www.charity-commission.gov.uk/

Making the Business Case

James A Cannon
published by CIPD, 2006
ISBN: 9781843981350

Managing Successful Projects with PRINCE2 2005

OGC (Office of Government Commerce)
ISBN: 9780113310869

Project and programme management: developing a business case

I&DeA (improvement and development agency)
http://www.idea.gov.uk/idk/core/page.do?pageId=5820962
Accessed March 2009

Business cases made simple 16

made simple guides
Made Simple guides are aimed at finance professionals and other
managers working in charities. They cover technical areas such
as tax and VAT treatments as well as information management
areas and aim to provide practical guidance to busy managers
and trustees in charities.

The content of guides is correct at the time of going to print, but

inevitably legal changes, case law and new financial reporting
standards will change. You are therefore advised to check any
particular actions you plan to take with the appropriate authority
before committing yourself. No responsibility is accepted by the
authors for reliance placed on the content of this guide.

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Business cases made simple 17