What is a product business case and its purpose ?
- A business case is a standard method used to justify investments in new products, product enhancements and major marketing programs.
- The business case if a dynamic document that evolves from the concept phase, through feasibility, and is base lined in the definition phase. Its assumptions are continually re-evaluated throughout the product’s life.
- Business cases must be assembled as a collaborateive effort of the cross-functional team. Its believability is tied directly to the realistic achievability of its intended outcomes for which team member buy in is critical.
- Within above context, often Product managers take on an investment management role
- They must protect the invested capital of the company and must accordingly manage its exposure to risk.
Business cases are designed to answer the question:
“If there is a business or market need, and if I could meet that need by makng an investment, what are the business and economic impacts if I chose X or do Y?”
- In order to accomplish above goal, a good business case shows expected financial and business consequences of the decision over time
- The business case must also include the rationale for quantifying benefits and justifying capital and operating expenditures.
- It also describes the overall impact of the investment opportunity in terms that every financially astute manager or executive seeks:
- Net Cash dlow
- Discounted cash flow
- Payback period
- Internal rate of return
- Business cases can be used to validate the value or benefits of an investment from a customer’s point of view
- Business plans should be reasonably precise as there is never enough time to be extremely precise as your team members might prefer – create the plan and state assumptions
- The team preparing the plan should attempt to strike a balance in terms of data collection, assumptions, risks and recommendations.
- The writing of a business case should be tailored to a business environment in terms of what the executives or the decision makers are seeking for in that business plan.
- Online searches can help you find useful templates that you can tailor to those needs.
An understanding that the purpose of a business case is to justify an investment that influences the future of a product / product line or portfolio.
Source: Haines, S. (n.d.). The Product Manager’s Desk Reference.