Change Management Initiative - Business Case Importance
Updated: Apr 3, 2022
It is always worth checking that the change programme is not a pet project caused by the hunch and launch syndrome, without strategic consideration or a plan on how the benefits will be realised
The business case provides the commercial reasons for starting the change programme, as well as justifying the investment of the organisation’s resources, time and effort before starting. It is developed to assess the change programme’s balance between costs and benefits.
The business case could either be basic and high-level, or detailed and comprehensive. The business case includes key parameters used to assess the objectives and constraints for the intended change programme. The business case may include details about problems or opportunities; business and operational impacts; cost benefit analysis; alternative solutions; and risks. The business case establishes the authority, intent and philosophy of the business need. It also serves as a formal declaration of the value that the programme is expected to deliver and a justification for the resources that will be expended to deliver it. The four typical components of the business case are:
Cost Benefit Analysis: A technique used to compare the total costs of the change programme against its benefits, using common metrics (monetary units, market share, etc.). Change programme decisions are based on whether there is a net benefit or cost to the approach, i.e. total benefits minus total costs.
Alternative Solutions: Assessing other possible courses of action, solutions or change programmes. It is about asking an independent and challenging question, ‘Are there alternatives and have they been investigated?’
Risks: The probability of occurrence of a specific event that affects the pursuit of change objectives. Risks are not negative by definition. Risks are potential external events that could have a negative impact (although not always) on the change programme if they occur. Risk also refers to the combined likelihood of the event occurring and the impact on the change programme if the event does occur.
Business and Operational Impacts: This relates back to organisational change capacity. The analysis of business and operational impacts could provide invaluable insights to the sponsor and change team. It is about performing a systematic process to determine and evaluate the potential impacts on normal day-to-day operations.
The business case may contain other relevant documents such as the programme charter, but this varies from organisation to organisation. The programme charter is a short document formally issued by the organisation which describes the change programme in its entirety. It provides the programme sponsor with the authority to apply organisational resources, it will also contain the objectives and constraints, solution direction, identified stakeholders, risks, statements about scope, etc.
Unless the change initiative is continually aligned to the organisation’s strategy it will not deliver benefits or value to the organisation
This blog is based on my book: Change Management Handbook – Leadership of Change® Volume 3
Peter consults, speaks, and writes on the Leadership of Change®.
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Peter F Gallagher is a Change Management Global Thought Leader, Guru, Expert, International Speaker, Author and Leadership Alignment Coach.
Listed #1 by leadersHum Top 40 Change Management Gurus You Should Follow in 2022 (Mar 2022).
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Business Book Ranking
Change Management Behaviour - Leadership of Change® Volume 6, listed among the 50 Books from Thinkers360 Thought Leaders to read in 2022.
Change Management Adoption - Leadership of Change® Volume 5, listed among year-to-date’s (Jul 2021) most popular books on business and technology from Thinkers360 member thought leaders.
Change Management Handbook - Leadership of Change® Volume 3, listed among the 50 Business and Technology Books from Thinkers360 Thought Leaders to read in 2021.
Change Management Pocket Guide - Leadership of Change® Volume 2, ranked within the top 50 Business and Technology Books (Jan 2020) from Thinkers360 Thought Leaders.