What is a 'business case'?

A business case is a comprehensive document that justifies the investment in a project by detailing the benefits, costs, and risks associated with it. It serves as a crucial tool for decision-makers, helping them understand the rationale behind undertaking a project. The business case highlights potential benefits, such as increased revenue or improved efficiency, and compares these with the estimated costs and risks involved, thereby providing a clear rationale for proceeding with the investment.

This document is typically used at the initial stages of a project to evaluate its viability and to gain approval from stakeholders. It ensures that all necessary information is presented for informed decision-making, enabling organizations to proceed with projects that offer the best return on investment.

In contrast, a document that outlines the budget for a project focuses specifically on financial aspects, rather than the broader business justification provided by a business case. A report summarizing project outcomes reviews what has already occurred, lacking the forward-looking perspective of a business case. Lastly, a legal contract between stakeholders governs terms and obligations rather than evaluating the justification for starting a project. Thus, the definition of a business case as a document that justifies project investment encompasses its purpose and the vital components it addresses.