statements describes business case project

Which of the following statements best describes the business case for the project

A Business Case Analysis (BCA) provides a best-value analysis that considers not only cost but other quantifiable and non-quantifiable factors supporting an investment decision. This can include but is not limited to performance, producibility, reliability, maintainability, and supportability enhancements.

Definition: A Business Case Analysis is a Program Management tool used to evaluate potential business decisions for best-value determinations.

Purpose of a Business Case Analysis (BCA)

A BCA is a useful tool that assists in refining the myriad of decisions that go into determining the best value strategy.  It follows an iterative process, conducted and updated as needed throughout the life cycle as program plans evolve and react to changes in the business and mission environment.

Business Case Analysis (BCA) use

A Business Case Analysis is used for the following:

  • Is used in the initial decision to invest in a project.
  • Guides the decision to select among alternative approaches.
  • Is used to validate any proposed scope, schedule, or budget changes during the course of the project.
  • Should also be used to identify the various budget accounts and amounts affected by the various product support strategies.
  • Should be a living document ‘ as project or organization changes occur they should be reflected in updates to the business case.
  • Should be used to validate that planned benefits are realized at the completion of the project.
  • Makes the team consider all of the costs, risks, and benefits of making a decision

Business Case Analysis (BCA) Report Content

As a minimum, a BCA should include:

  • Executive Summary: An overview of the BCA
  • Introduction: An introduction that defines what the case is about (the subject) and why (its purpose) it is necessary. The introduction presents the objectives addressed by the subject of the case.
  • Methods and Assumptions: state the analysis methods and rationale that fixes the boundaries of the case (whose costs and benefits are examined over what time period). This section outlines the rules for deciding what belongs in the case and what does not, along with the important assumptions.
  • Impacts: The business impacts are the financial and non-financial business impacts expected in one or more scenarios.
  • Risk assessment: show how results depend on important assumptions (‘what if’) and the likelihood for other results to surface.
  • Conclusions and Recommendations: specific actions based on business objectives and the analysis results.

Performance-Based Logistics (PBL) BCA

DoD has promulgated the Guiding Principles for conducting a Performance-Based Logistics (PBL) BCA in USD(AT&L) Memorandum, Performance-Based Logistics (PBL) Business Case Analysis (BCA), 23 January 2004. OSD has issued guidance emphasizing the use of the Business Case Analysis as a fundamental tool to support PBL support strategic decisions.

Difference Between a Business Case and Business Case Analysis

They are the same regarding results, but a business case normally refers to the report, and business case analysis refers to the analysis.

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Updated: 9/26/2022

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Definition

A business case provides justification for undertaking a project, programme or portfolio.

It evaluates the benefit, cost and risk of alternative options and provides a rationale for the preferred solution.

Definition from APM Body of Knowledge 7th edition 

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Five elements of a business case

A common way of thinking about a business case is using these five elements:

  1.  Strategic context: The compelling case for change.
  2.  Economic analysis: Return on investment based on investment appraisal of options.
  3.  Commercial approach: Derived from the sourcing strategy and procurement strategy.
  4.  Financial case: Affordability to the organisation in the time frame.
  5.  Management approach: Roles, governance structure, life cycle choice, etc.

The business case is reviewed and revised at decision gates as more mature estimates and information become available. The approved business case provides a record of the decisions made by governance about how to achieve the required return on investment from the work. It documents the options considered and it is normal practice to include the ‘do-nothing’ option as a reference. Through this approach, the business case becomes a record of the recommended option with rationale and evidence to support the decision.

The presentation of the business case, if approved, results in the formal startup of the project, programme or portfolio. The sponsor owns the business case.

It brings together the investment appraisal with evidence of how the investment is intended to lead to realisation of the intended benefits. All projects must have a business case that demonstrates the value of the work and it is outlined during the concept phase of the life cycle.

Starting out in project management

Your essential guide to the basics of project management. Written for anyone new to projects or wishing to progress their career as a project professional Starting Out charts the journey of the APM project life cycle, from concept through to delivery and handover.

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Related reading

Most people see the business case process as a form of medieval torture administered by accountants. They also, with some justification, question the quality and value of the business case once created... read more.

Business cases can be tricky to get right. It calls on a lot of different skills – writing, presentation, budget management, even sales skills – to create a strong case for the project, its scope, benefits and the funds allocated to it... read more.

On Wednesday 14th September, the case for a business case was delivered by Peter Langley for the South East Branch at BAE in Rochester. A good number of people supported the event and many good examples and questions came from the floor during the evening... read more.

In UK government Projects, HM Treasury Green Book and Five Case model provide a structured approach to making and appraising investment proposals... read more

There’s an increasing requirement, across both the public and private sector, to ensure that investment decisions are based on sound reasoning and with clear spending objectives... read more.

APM Body of Knowledge 7th edition

The APM Body of Knowledge 7th edition is a foundational resource providing the concepts, functions and activities that make up professional project management. It reflects the developing profession, recognising project-based working at all levels, and across all sectors for influencers, decision makers, project professionals and their teams. 

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