How to Create and Optimize Business Cases for a New Product?
A product business case helps decision-makers in a company determine whether building a product is worth the investment. It usually includes a detailed analysis of the market opportunity, the target audience, the competitors, the product’s functionalities, the pricing strategy, the marketing plan, the development and launch timeline, and the ROI.
A business case in product management is crucial because it:
- Ensures strategic alignment by explaining the rationale behind the product and tying it to the company’s goals
- Facilitates strategic planning by providing the decision-makers with relevant information about the market opportunity, development strategy, etc.
- Helps secure funding and gain the support of stakeholders by building a clear and compelling vision for the product throughout the product lifecycle
- Minimizes risks by outlining the potential challenges and costs associated with the product’s development
Let’s take a look at how you can create a new product business case.
How to create a product business case
1. Identify the problem
It is difficult to market a product that doesn’t solve a problem. The first step in creating a product management business case is to justify its need.
Start by conducting market research and user interviews to learn more about the problem you are trying to solve. This will give you deeper insights into how your audience is affected by it and what will be an ideal solution for them.
While interacting with your audience or industry experts, it is important to bring your team together and analyze the findings collectively. Zeda.io provides a collaborative product space where you can collect user feedback from multiple sources for many such product discussions.
Identifying the problem helps you tangibly define where your users are now and where they want to be.
2. Suggest various potential solutions
After visualizing where your users are (when their problem is unsolved) and where they want to be (when their problem is solved), start conceptualizing solutions, i.e., your product.
While discussing potential solutions for your users, it is important to keep your company’s goals in mind. Your product should help achieve that goal.
For each solution, try to list the steps your user needs to take to solve their problem. This way you can picture yourself in your audience’s place which will help you choose the most user-friendly solution.
Zeda.io enables product teams to create user flows and chart out ideas clearly in this step of product business case analysis.
3. Recommend one solution
While discussing various potential solutions in the previous step, develop a prioritization framework to build the best product for your users. Factor in parameters such as development complexity, user-friendliness, etc., which are tangible and can be backed by data.
In the product business case, it is important to highlight the basis on which each of the proposed solutions is weighed and ranked. This will prevent ambiguity within the team and keep everyone on the same page.
It is also helpful to compare your best solution with the existing solutions in the market on the basis of the same parameters. This helps you generate more innovative ideas and build a stronger business case for product management.
4. Explain how it will be implemented
Visualizing the product will allow you to answer a lot of questions such as:
- Do you have the right team and technology to build this product?
- How easy will it be for the end users to use this product to solve their problem(s)?
- What is the scope of this product?
Furthermore, it will help you bring your internal teams and external stakeholders on the same page.
Apart from creating user flows, Zeda.io also helps you design wireframes collaboratively.
Tangibly define the layout, structure, and functionality of your product which will facilitate better collaboration, allow you to validate your ideas quickly, iterate when needed, and plan the product development strategy.
Now that you know how to create a product business case, let’s look at what it contains with the help of a product business case template.
Key elements of a product business case
1. Executive summary
The executive summary is the one-page summary of the entire product business case. It is like an elevator pitch for a product or a cover letter for a resumé. Due to the nature of this document, it is written last, even though it is first on the list.
To keep it simple, mention the problem statement, proposed solution, investment, ROI, and the relevant team members.
2. Problem statement
The problem statement is the pain points of your audience. This component in the product business case template will explain the purpose of the product. Make sure to be clear and concise and include examples if possible to help everyone understand why anyone would use this product.
You can also mention what your audience has to deal with if the problem is unsolved to make the business case even stronger.
3. Vision, goals, and objectives
Let’s take a look at what each of these are:
- Your product vision is an aspirational description of what your product will look like in the future.
- The product goal is a measurable and actionable target that describes what your product team aims to build.
- Objectives are action items or milestones that propel your product’s development in the intended direction.
The above three signify that you have not only understood the problem at hand but can also visualize the potential solution.
4. Scope and background information
Product scope defines the boundaries of a product’s functionalities. This helps the product team to outline a product’s features by importance and characteristics and to plan the product’s future.
The background information refers to the market research where you analyze the existing solutions for the problem you are trying to solve. Then, show how these solutions aren’t meeting the expectations of your customers.
The scope and background information make a strong business case for the underlying idea of your product.
5. (Proposed) Action plan
After identifying the solution, you need to figure out how to make that solution accessible to your users.
In this product development business case component, you need to explain how you will develop and market your product. This is a crucial step in the entire SaaS product management process because it helps you visualize the product as a means to achieve your business goals.
Of course, due to the nature of this component, it might be longer than others. But keep in mind that all you need to explain here is the broad outline.
6. Investment required for the plan
This is where you outline your estimations of what the product needs, in terms of human resources, tools, time, etc., to get built. While mentioning that, also highlight how the (chosen) plan is leaner than others.
Strengthen your product business case by mentioning how the financial benefits of the plan outweigh the costs. Proving to your stakeholders that the product is profitable is pivotal in getting their support and approval.
7. SWOT analysis of the plan with market research
SWOT analysis outlines the strengths, weaknesses, opportunities, and threats of the plan that will build your product through market research. This will allow you and your team to look closely at internal and external factors that can affect your business.
Conduct a SWOT analysis for your product development plan by asking the following questions:
While conducting the SWOT analysis, it is a good idea to involve the stakeholders to get their input on what might aid or hinder your product’s growth in the future.
The product business case helps a product team and stakeholders decide whether an opportunity is worth pursuing. The document contains the problem, potential solutions, the recommended solution, and steps to build it.
Business cases in product management are pivotal in getting everyone on the same page by helping both the internal team and external stakeholders understand the problem, visualize the solution, and recognize the market opportunity.
It is crucial for product managers to make this process collaborative and encourage everyone to bring their constructive inputs to the table. This will build a stronger case for the product while minimizing the chances of errors down the road.
Zeda.io allows product teams to have complete visibility on customer feedback, prioritize problems, crack solutions, define PRDs, manage capacity, publish release notes, and keep all stakeholders updated at every step of the product management process.
Use Zeda.io’s native features or bring your current tech stack here through integrations.
- What is a product business case?
Answer: A product business case is a collaborative document that outlines the rationale behind developing a product for a certain audience.
- How do you create a product business case?
Answer: You can create a product business case by identifying the problem, suggesting a few potential solutions, recommending one of them, and explaining how that solution can be built.
- What is a business case example?
Answer: The core components of a simple product business case example for a team messaging tool looks like this:
- Problem: Remote teams struggling to carry out their daily communications effectively.
- Potential Solutions: Email app, video call app, push-to-talk app, and messaging app.
- Recommended solution: Team messaging app as it facilitates real-time and asynchronous communication without disturbing others or creating long email threads.
- Steps to build: Hire developers and equip them with the necessary tools.
- What should a business case include?
Answer: The key components of a business case includes: an executive summary, problem statement, product vision, goals, and objectives, scope and background, action plan, the investment required, and the SWOT analysis of the action plan.
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