A Business Case consists of a decision-making tool used to determine whether an investment will create value. Typically it consist of a well structured document where it states the investment purpose followed by the business impacts estimation (benefits) and costs in order to determine whether the decision under analysis will be profitable or not. A Business Case should be free of non-validated assumptions, following a rational and impartial process allowed by the usage of business research methods to validate cause-effect relations between phenomenons.
Facing a context where resources are scarce and face unpredictable constrains, companies ought to decide as to which investments they should invest that maximize the most value to their business. If organizations are currently living in a competitive market where customers’ needs are continuously changing, then the ability to manage the internal resources (employees), “listen” to the market and convert that valuable information into innovative projects are key to keep creating value to customers and wealth for organizations. This is why the initiatives appraisals through business cases become an essential vehicle to assist top management converting the company strategy into execution. Why? Because to foster business growth, energize employees and attract new customers continuously, companies need to invest – invest the resources in the projects that will bring positive results and generate wealth to the business. This is where Business Cases based on scientific management have a crucial role on the decision-making process.
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Since the business need may come from different possible origins, either top down, bottom-up, middle management or even triggered from external sources, it is essential that a benefits mind-set is “educated” across the organization’s teams so they clearly understand the value of their innovative contributions and initiative proposals. Once the business needs are identified, the business case becomes helpful on providing insightful data on which solutions proposed will better suit the problem, need or opportunity reported and how much value they will return (maximizing ROI) and consequently support top management decisions on knowing what, how and when to invest resources towards maximizing business value.
The Business Case process must be rational, objective and impartial where two different people, when analysing under the same circumstances and conditions, will reach the same or very similar results (scientific management principle).
If organizations aim to succeed, it is a priority to understand the value of making effective projects (make the right projects) and secondly managing them efficiently (managing them right).