Business case: From a loose idea to a successful project

For companies that want to plan and implement their projects and investments carefully, the business case is an indispensable tool. It ensures that every investment is thoroughly examined and evaluated before important resources are allocated. The business case serves as a solid basis for decision-making and ensures that all aspects are carefully considered.

In this article, we explain what a business case is, what benefits and opportunities it offers and what costs and risks need to be considered. This article also discusses how this project can be almost completely automated using the latest technologies and illustrates the targeted implementation with a practical example.

What is a business case?

A business case is a detailed documentation that

  • Economic efficiency
  • Feasibility
  • Added value

of a project or investment. It includes both financial and non-financial factors and provides a structured method for assessing the potential outcomes and impacts of a project.

Among other things, all basic information about the project, such as risks, resources, objectives or a new investment that has already been made or still needs to be made, is taken into account.

The Gabler Business Dictionary defines the business case as an action or investment with a positive cost/benefit ratio, which is understood from an instrumental perspective as a prerequisite for responsible behavior in competition.

Benefits of a business case

Sound basis for decision-making

The biggest advantage of a business case is that it provides a sound basis for decision-making. It enables decision makers to review all relevant data and resources relating to a project and make informed judgments to achieve the objectives set. The systematic examination of all relevant data ensures that no significant aspects of a project are overlooked, which in turn underlines competitive project management.

Risk analysis

A business case contains a comprehensive assessment of risks (risk assessment). This identifies potential dangers and evaluates their probability and possible impact. This allows risk mitigation measures to be developed, which, for example, increases the likelihood of project success. This is particularly important for projects with a complex basis, where investments are often high and risks are often diverse and difficult to predict.

Transparency and traceability

By creating a business case, a high degree of transparency and traceability is achieved. By documenting all assumptions, calculations and decision-making processes, these are comprehensible for all parties involved. This promotes confidence in the decisions made, facilitates communication within the company and once again clearly demonstrates the enormous importance of this document. A well-documented project enables every step of the project to be tracked and reviewed.

Costs of a business case

Production costs

The creation of a business case involves a considerable amount of project management work. This includes collecting and analyzing data, creating forecasts and carrying out risk assessments. Depending on the complexity of the project, this can take up a lot of time and resources. The effort involved can be considerable, especially for large and complex projects.

Consulting and training costs

In some cases, it makes sense to bring in external consultants to support the creation of the business case. They are able to provide valuable expertise and experience, but this comes at an additional cost. It may also be necessary to provide internal training so that everyone involved understands and can apply the methods, meaning, tools and objectives for creating business case projects.

Opportunity costs

The creation of a business case ties up resources that could potentially be used elsewhere. This applies in particular to the time and commitment of managers and specialist staff. It is therefore important to consider the opportunity costs and weigh up whether the potential benefit justifies the resources invested. The investment in creation must be well thought out to ensure maximum benefit.

Opportunities

Improved resource utilization

A well-prepared business case helps to use operational resources more efficiently. By accurately assessing the resources required and the expected results, projects can be prioritized to bring the greatest benefit to the company. This leads to a better allocation of time, money and personnel. This is a crucial success factor, especially for large plans with a high investment.

Increasing the success rate

Projects that are launched on the basis of a sound business case have a higher success rate. This is because potential problems can be identified and resolved at an early stage before they jeopardize the progress of the project. In addition, clear objectives and success criteria can be defined, which serve as guidelines for project implementation. These clear guidelines help to drive the project forward in a targeted and efficient manner.

Innovation Promotion

A business case can also serve as a catalyst for innovation. The structured examination and assessment of new ideas, goals and projects creates an environment in which innovations are promoted and driven forward in a targeted manner. At best, this helps to ensure that the company remains competitive and continues to develop. New projects that are supported by well-founded decisions have the potential to bring about ground-breaking changes.

Risks

Missing data and assumptions

Missing or inaccurate data is a major risk factor when preparing a business case. Forecasts, assumptions and the subsequent decision are often based on historical data and estimates that turn out to be potentially inaccurate. This can lead to incorrect conclusions. A comprehensive project suffers if the foundations are not correct.

Overoptimism

There is a risk that a business case will be created too optimistically, especially if those responsible strongly believe in an optimistic assessment of the project's success. This can lead to risks and costs being underestimated and the expected benefits being overestimated. A realistic and critical view is therefore essential in order to evaluate the project objectively.

Resistance within the company

Not all employees and departments immediately recognize the necessity and benefits of a business case. Resistance and delays can occur, especially if the creation of the business case is perceived as an additional burden. Open communication and the involvement of all relevant stakeholders are therefore crucial for success and are of great importance.

Automate business cases

Having looked at the basics, benefits, opportunities, costs and risks of a business case up to this point in the article, the question arises as to whether - or rather - how modern technologies can support this process. One such technology is Konfuzio, a AI-supported software for advanced document processingwhich was specially developed to optimize business processes through automation and the Extraction of data and information from documents and e-mails.

Konfuzio offers unique advantages through the automation of processes and the precise extraction of data from a wide variety of sources.

These skills are essential to make the creation of a business case more efficient and precise:

Automated data capture from various document types

Konfuzio uses advanced AI technologies for automated data collection and processing. The platform can extract data from a variety of sources, including invoices, reports, contracts and emails. This automated capture significantly reduces manual effort and minimizes the risk of errors, resulting in faster and more accurate business case creation. This is particularly helpful for complex projects with extensive data requirements.

Intelligent data extraction and integration

Konfuzio enables the precise extraction of relevant data and its integration into the business case. This includes financial data, operational key figures and other important information that contributes to decision-making in the company. The seamless integration of this data into the business case creates a solid information base that significantly improves the quality of the assessment, as all relevant data can be considered and analyzed. For any project, regardless of its size, this integration is of paramount importance.

Efficient retrieval of archived content

One of the biggest advantages of Konfuzio is its ability to find and subsequently extract information from already archived and digitized documents. The so-called document chat function is particularly useful when it comes to finding quick and precise answers to important questions or collecting older data for the business case, further reducing manual effort. Read more about the Confucius Doc Chat in our related articleto find out about further benefits.

How to create a business case with Konfuzio

The creation of a business case with Konfuzio follows a clear and structured process:

  1. Data collection and extraction - Start by collecting all relevant documents and emails. Konfuzio automatically extracts the required data and information.
  2. Data integration - The extracted data can be seamlessly integrated into the business case to create a comprehensive information base.
  3. Analysis and assessment - Based on the integrated data, well-founded analyses can be carried out and assessments made. This makes it possible to realistically assess potential benefits and risks.
  4. Risk assessment - Identify and assess potential risks using the precisely extracted data.
  5. Documentation and communication - All assumptions, data sources and analyses are documented in a clear and comprehensible format to facilitate communication and understanding of the results.

Use Case

A company with 1000 employees is planning to introduce a new ERP system and needs to create a business case for it. The use of Konfuzio brings the following advantages:

Automated recording of costs and benefits
All relevant cost data from quotations, contracts and emails are automatically recorded and integrated into the business case. This saves time and reduces errors.

Data-based decision-making
Based on the precisely extracted data, well-founded analyses can be carried out and decisions derived. Data integration makes it easier to carry out a comprehensive assessment of the project. In this way, well-founded decisions lead the project to success.

Risk assessment
The Konfuzio platform identifies potential risks such as implementation problems or unexpected costs through automated data preparation for in-depth analysis and thus supports their usability. This enables a well-founded risk assessment and the development of risk mitigation measures. Every decision is supported by a precise risk assessment.

Transparent documentation
All assumptions, data sources and analyses are documented in a clear and comprehensible format. This makes it easier to communicate and understand the results.

With the support of intelligent software, the company can ensure that the business case is well-founded, comprehensive and precise. This in turn increases the likelihood that the project will be approved and can be successfully implemented.

Conclusion

The use of a business case is essential for the successful planning and implementation of projects. Modern technologies such as Konfuzio make the creation process more efficient by automating data collection and extraction, enabling in-depth analysis and accelerated decision-making. Companies that use Konfuzio can implement their projects with a higher success rate, fewer risks and within a shorter planning phase. In this way, the business case becomes not just a document, but a strategic tool for sustainable business success.

Every project that is supported by a sound business case has the potential to be realized successfully and efficiently.

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Charlotte Goetz Avatar

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