CREATING

A PRODUCT
BUSINESS
CASE

HOW-TO GUIDE
 Creating a Product Business Case
HOW-TO GUIDE

A Product Business Case is a plan written to justify a corporate product investment. It is common
for an organization to recognize an opportunity to exploit with a new product, but the develop-
ment of that product is outside of the budget. Perhaps funds do exist in the budget for new
product development, but there is uncertainty or skepticism about the decision to invest. The
Product Business Case becomes the mechanism for quantifying the opportunity and the risk, so
the organization can make a quality decision about proceeding.

This How-To Guide outlines what a Product Business Case is, describes the key concepts for
creating an effective one and presents an action plan for doing yours.

Download the Demand Metric Product Business Case Template to guide you
through the process outlined in this guide.

The Product Business Case Defined

A Product Business Case is a formal document that contains the necessary information to enable
the business to make a decision about investing in a product development effort. A good Product
Business Case is thoroughly researched and provides all the relevant information presented in an
easy-to-understand, accessible format to convince decision makers to invest. The Product Busi-
ness case therefore will include sections that detail.

What the product is: a precise definition of the product.

Who the product is for: the target market segments and their sizes for which this product is ideal.

Why it is needed: a description of the market need that compels the organization to develop a
product to address it.

How it will compete in the market: how the product will enter and compete in the market against
existing and expected competitors.

Financials: a forecast of the revenue, profit & loss and how long it will take to break even on
investing in developing this product.

2 CREATING A PRODUCT BUSINESS CASE HOW-TO GUIDE

Product Business Case Fundamentals
Apply the following core concepts to develop an effective, credible Product Business Case:

Research — The best Product Business Cases are well researched. Conduct thorough research
to find objective, industry information that supports your business case. The more third party,
objective data you can find and include, the more credible your business case becomes. Quan-
titative data is excellent, but also include qualitative data, particularly if it comes from an industry
expert or respected source.

Narrative — A Product Business Case tells a story about how you will bring a product to life;
it is not a checklist. Therefore, the readability of the document is important. Different authors
often write different sections of the business case, so make sure all sections have good internal
consistency because they are highly interdependent. For this reason, designate one person to
edit the entire document.

Objectivity — A business case is an objective and fact-based document, so make sure that you
address both the up side and down side of the product investment. The temptation is to only
cover the upside in your business case, but doing so will cause decision makers to doubt the
credibility and completeness of your business case. If research reveals negative data, don’t
ignore it; rather, include it in your business case and present an argument for how your product
will mitigate any negative research findings.

Format — Make your Product Business Case accessible to the many people who will read it
and influence its acceptance. Bring it to life with graphics, tables and figures. Use headings
and sub-headings to organize the text. Avoid a document that consists of multiple pages of
unbroken text.

Download the Product Business Case Template to document your business case,
using the following set of steps to complete it:

Bottom Line
The discipline of your product planning process will help you avoid the critical design, develop-
ment and launch flaws that can cripple a new product. Regardless of how compelling the oppor-
tunity or innovative the product, there are flaws. The rigor of your planning process will help you
detect them, mitigate the risks, identify the critical success factors and make the best possible
decision you can make based on the available information.

3 CREATING A PRODUCT BUSINESS CASE HOW-TO GUIDE

 Action Plan
STEP 1 - Identify

1 Identify Know the Market Oppor-

tunity You Are Targeting

Identify the market opportunity or

2 Develop
need this product will address.
Provide an opportunity
statement that explains the
nature of the opportunity or
3 Determine underlying need the product
will address.

Discuss in detail the market

for this product, its size and
4 Competition expected growth.

In this section, it is important that

you not only state the facts, but
also your insight on why this is the
5 Present right market and from where the
initial customers will come.

6 Complete

Market Requirements Document

7 Write
VIEW RESOURCE

4 CREATING A PRODUCT BUSINESS CASE HOW-TO GUIDE

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