Business Case & Solution Evaluation
Topic 7 of 11 · In Business Analysis · September 9, 2026
Learn to write business cases, perform cost-benefit analysis, calculate ROI, conduct gap analysis, track KPIs, and evaluate whether a solution actually delivered value.
Overview
A Business Analyst does not just define requirements — they must also prove that the solution was worth building. Solution evaluation is the BABOK knowledge area that ensures the delivered solution actually delivers the business value it promised.
This topic teaches you how to write a business case that justifies a project, how to perform cost-benefit analysis and calculate ROI, how to conduct a gap analysis and feasibility study, how to define and track KPIs, and how to run a post-implementation review. These are the skills that make you a strategic partner — not just a requirements writer — and they are the skills that lead to senior BA and management roles.
Before You Start
- Re-read the ROI formula and the worked 15.4 per cent example, plus the payback calculation in 'Return on Investment'.
- Review the cost-benefit example table in 'Cost-Benefit Analysis', noting one-time, ongoing and hidden costs.
- Re-read the KPI design framework (what, why, how, target, frequency) before the worked example.
- Open the warehouse management system mini-project brief: the worked example computes its numbers.
- Have a calculator ready: ROI and payback both require step-by-step arithmetic.
Learning Objectives
- Write a business case that justifies a project to sponsors and executives
- Perform a cost-benefit analysis comparing total costs against expected benefits
- Calculate Return on Investment (ROI) and payback period for a proposed solution
- Conduct a gap analysis between the current state and the desired future state
- Write a feasibility study covering technical, operational, economic, and schedule dimensions
- Define meaningful KPIs that measure whether a solution delivers business value
- Design a KPI tracking dashboard for post-implementation monitoring
- Conduct a post-implementation review (PIR) that captures lessons learned
Prerequisites
Complete Business Analysis Fundamentals and Documentation & Use Cases before starting this topic.
The Business Case
A business case is a document that answers one question: "Should we invest in this project?" It presents the problem, evaluates options, and recommends a specific course of action with financial justification.
Standard business case structure:
- Executive Summary — one-page overview: problem, recommendation, expected benefit, total investment, and timeline
- Problem / Opportunity Statement — what is broken or what opportunity exists, with evidence
- Options Analysis — at least three options: do nothing, minimal change, and full solution
- Recommended Solution — which option and why
- Cost-Benefit Analysis — detailed costs vs benefits over 3-5 years
- Risk Assessment — key risks, probability, impact, and mitigation
- Implementation Timeline — high-level phases and milestones
- Success Criteria — how you will measure whether the investment paid off
- Appendix — financial models, stakeholder input, technical assumptions
The business case is reviewed by sponsors and executives. It must be compelling but honest — inflated benefits or hidden costs destroy credibility.
Cost-Benefit Analysis
Cost-benefit analysis compares the total cost of a solution against its total benefit over a defined period (typically 3-5 years).
Costs include:
- One-time costs: development, hardware, licensing, implementation, training, data migration
- Ongoing costs: maintenance, support, hosting, staffing, upgrades
- Hidden costs: productivity loss during transition, change management, opportunity cost of team time
Benefits include:
- Direct financial benefits: revenue increase, cost reduction, fines avoided
- Indirect benefits: improved customer satisfaction, faster time-to-market, better compliance
- Intangible benefits: employee morale, brand reputation, strategic positioning
Example cost-benefit table:
| Item | Year 1 | Year 2 | Year 3 | Total |
|---|---|---|---|---|
| Development cost | $200,000 | $0 | $0 | $200,000 |
| Annual maintenance | $20,000 | $20,000 | $20,000 | $60,000 |
| Cost savings | $80,000 | $100,000 | $120,000 | $300,000 |
| Net benefit | -$140,000 | $80,000 | $100,000 | $40,000 |
Return on Investment (ROI)
ROI measures the financial return of an investment as a percentage:
Formula: ROI = (Net Benefit / Total Cost) x 100
Using the table above: Total cost = $260,000, Total benefit = $300,000, Net benefit = $40,000. ROI = ($40,000 / $260,000) x 100 = 15.4%.
Payback period: the time it takes for cumulative benefits to equal cumulative costs. In the example: Year 1 ends at -$140,000. Year 2 adds $80,000 resulting in -$60,000. Year 3 adds $100,000 resulting in +$40,000. Payback occurs during Year 3 (approximately 2.6 years).
When to use ROI vs Payback Period:
- ROI: comparing multiple projects for the highest return
- Payback Period: when cash flow constraints matter — how quickly do we recover the investment?
- Net Present Value (NPV): accounts for the time value of money — a dollar today is worth more than a dollar next year
- Internal Rate of Return (IRR): the discount rate at which NPV = 0 — useful for comparing against the cost of capital
Gap Analysis
Gap analysis compares the current state (AS-IS) with the desired future state (TO-BE) to identify what must change. It is both a strategic and operational tool.
Gap Analysis framework:
| Dimension | AS-IS (Current) | TO-BE (Desired) | Gap |
|---|---|---|---|
| Process | Manual invoice approval, 5 days | Automated approval, 1 day | Automation of approval workflow |
| Technology | Excel-based tracking | Integrated ERP system | System implementation |
| Skills | No SQL knowledge on team | Team can query the database | Training program needed |
| Data | Data in 3 disconnected systems | Single source of truth | Data integration project |
The gaps identified become the basis for your business requirements and project scope.
Feasibility Studies
A feasibility study determines whether a proposed solution is realistic and worth pursuing. It evaluates four dimensions:
- Technical feasibility: Can we build it? Do we have the technology, skills, and infrastructure?
- Economic feasibility: Should we build it? Is the ROI acceptable? Can we afford the investment?
- Operational feasibility: Will it be used? Will stakeholders adopt it? Does it fit the culture?
- Schedule feasibility: Can we build it in time? Are there regulatory deadlines or market windows?
The feasibility study typically results in a Go / No-Go / Conditional Go recommendation. A "conditional go" means proceed only if specific risks are mitigated (e.g., "Go, provided we secure the vendor contract by Q2").
KPI Tracking
KPIs (Key Performance Indicators) are the measurable outcomes that prove a solution is delivering value. Defining them before implementation — not after — is critical.
KPI design framework:
- What are we measuring? (metric name)
- Why does it matter? (business impact)
- How will we measure it? (data source, formula)
- Target: what value indicates success?
- Frequency: how often will we check?
Example KPIs for an invoice automation project:
| KPI | Current | Target | Frequency |
|---|---|---|---|
| Average processing time | 5 days | 1 day | Weekly |
| Invoice error rate | 15% | <3% | Monthly |
| Stakeholder satisfaction score | 3.2 / 5 | 4.5 / 5 | Quarterly |
| Cost per invoice processed | $12 | $4 | Monthly |
Track KPIs on a dashboard visible to stakeholders. Review monthly for the first 3 months, then quarterly.
Post-Implementation Review (PIR)
A PIR is conducted 3-6 months after go-live to evaluate whether the solution achieved its intended value. It is the closing loop of the BABOK Solution Evaluation knowledge area.
PIR structure:
- Objectives review: What did the business case promise?
- KPI results: Are targets being met? Show the data.
- Benefits realized: Which benefits have been achieved, partially achieved, or not achieved?
- Issues and risks: What problems emerged post-go-live?
- User feedback: What do end users say about the solution?
- Lessons learned: What would we do differently next time?
- Recommendations: Improvements, decommissioning, or follow-on projects
The PIR is often the most overlooked BA deliverable — but it is the one that proves the BA role is strategic, not just tactical.
Hands-On Practice
- Write a one-page business case for a hypothetical project (e.g., implementing a CRM system). Include problem, options, recommendation, and estimated costs/benefits.
- Create a cost-benefit analysis table for that project over 3 years. Calculate ROI and payback period.
- Conduct a gap analysis for a process you know well — document AS-IS, TO-BE, and gaps across 4 dimensions.
- Define 4 KPIs for the CRM project with current values, targets, data sources, and measurement frequency.
- Write a brief PIR template that you could use for any project.
Deeper Worked Examples
Building the cost-benefit case for the warehouse management system
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
Common Mistakes
- Writing a business case without hard evidence — assumptions without data destroy credibility
- Ignoring intangible benefits — they are real and sponsors know it
- Calculating ROI using only direct costs — hidden costs (training, migration, opportunity cost) matter
- Defining KPIs after implementation — you need a baseline to measure improvement against
- Skipping the ‘do nothing’ option in the options analysis — it is the most important comparison
- Conducting a PIR only when things go wrong — PIRs should happen for every project, successes included
- Presenting a cost-benefit analysis without explaining the assumptions behind the numbers
Real-World Usage
In a real job, the ability to write a business case and prove ROI is what separates a senior BA from a junior one. When you can walk into a sponsor meeting and present a cost-benefit analysis showing a 20% ROI with a 2.5-year payback period, you are no longer just a requirements writer — you are a strategic advisor. The PIR is your proof of value: when you can show that the project you worked on saved $300,000 in its first year, you have concrete evidence for your next promotion or raise. These analytical skills are what lead to roles like Senior BA, BA Manager, Strategy Consultant, and Product Director.
Mini Project
Business problem: A logistics company wants to implement a warehouse management system (WMS) to replace manual inventory tracking. Current error rate is 12%, and order fulfillment takes 4 hours on average.
Objective: Write a business case, perform cost-benefit analysis, define KPIs, and plan a post-implementation review.
Task 1
Task 2
Task 3
Task 4
Task 5
| Deliverable | What it proves |
|---|---|
| Business case (1 page) | You can justify a project to executives |
| Cost-benefit analysis | You can quantify costs and benefits |
| Gap analysis | You can compare current vs future state |
| KPI definitions (5) | You can measure business value objectively |
| PIR plan | You can close the loop after implementation |
Key Takeaways
- A business case justifies a project with a problem statement, options analysis, cost-benefit analysis, and recommendation
- Cost-benefit analysis compares total costs (one-time, ongoing, hidden) against total benefits over 3-5 years
- ROI = (Net Benefit / Total Cost) x 100; payback period = time to recover the investment
- Gap analysis compares AS-IS to TO-BE across process, technology, data, and skills dimensions
- Feasibility studies evaluate technical, economic, operational, and schedule viability
- KPIs should be defined before implementation with current values, targets, and measurement frequency
- Post-implementation reviews (PIR) evaluate whether the solution delivered its promised value
- These skills separate senior BAs who are strategic advisors from junior BAs who are requirements writers
Key Terms & Glossary
| Term | Meaning |
|---|---|
| Business case | A document that justifies an investment with a problem statement, options analysis, cost-benefit analysis, recommendation and success criteria. |
| Cost-benefit analysis | A comparison of a solution's total costs, one-time, ongoing and hidden, against its total benefits over three to five years. |
| Return on investment | Net benefit divided by total cost, expressed as a percentage, used to compare projects by financial return. |
| Payback period | The time it takes for cumulative benefits to equal cumulative costs and recover the investment. |
| KPI | A measurable outcome, defined before implementation with a baseline, target and measurement frequency, that proves a solution delivers value. |
| Post-implementation review | A review three to six months after go-live that checks KPIs, realised benefits, user feedback and lessons learned. |
Learning Resources
BABOK Guide — Solution Evaluation
The official reference for evaluating solutions and measuring business value.
Business Case Guide (Moore)
A comprehensive guide to writing business cases that get approved.
Financial Analysis for Business Decisions (Coursera)
A course on cost-benefit analysis, ROI, and financial decision-making.
KPI Best Practices (KPI.org)
The definitive resource for designing and managing KPIs.
Gap Analysis Template (Strategyzer)
A practical template for conducting gap analysis across business dimensions.
Post-Implementation Review Guide (PMI)
PMI’s guide to conducting effective post-implementation reviews.
Chapter Quiz
Chapter Quiz — Business Case & Solution Evaluation
Five questions on proving a solution was worth building: business cases, cost-benefit, ROI, feasibility, and KPIs that measure value.
Question 1 of 5
A solution totals $260,000 in costs and yields $300,000 in benefits over three years. The ROI is:
Knowledge Check
End-of-Topic Exam
Hint: Total cost includes the build plus all three years of running cost; then compare cumulative net cash each year.
Model answer: Total cost = 150,000 + (30,000 x 3) = 240,000. Total benefit = 100,000 + 120,000 + 150,000 = 370,000. Net benefit = 370,000 - 240,000 = 130,000. ROI = (130,000 / 240,000) x 100 = 54.2 per cent. Cash-flow by year: year one ends at -80,000 (100,000 saved less 30,000 running less 150,000 build), year two at -20,000, and year three turns positive at +100,000, so payback lands about a fifth into year three, roughly 2.2 years. Present ROI for comparability and payback where cash flow matters.
Hint: The gap is the four days of delay; dimensions are process, technology, data and skills.
Model answer: The gap is the difference between the current and desired state, here the four days of approval delay to remove. I would check four dimensions: process, such as the manual approval workflow; technology, such as Excel tracking versus an automated workflow; data, such as invoices scattered across systems versus a single source of truth; and skills, such as staff needing new tool training. Each gap feeds scope: process gaps become functional requirements, technology gaps become solution components, data gaps become integration requirements, and skills gaps become training plans.
Hint: Document tangible numbers separately and state intangibles honestly as qualitative.
Model answer: I would write: 'Not every benefit of this solution carries a direct pound value. The labour saving is priced above at 130,000, but employee satisfaction, a stronger compliance posture and faster access to decision data are real benefits that we deliberately report as qualitative. We would rather state them honestly than inflate the figures, because a business case that overstates returns loses credibility at the first review. If we later find a way to measure them, such as a staff survey or a time-to-decision metric, we will add them to the KPI dashboard. Sponsors accept honesty when credibility is the target.'
Hint: Technical, economic, operational and schedule, tied to a condition such as a vendor contract.
Model answer: The four dimensions are technical, can we build it with the available skills and infrastructure; economic, does the ROI stand under scrutiny; operational, will staff actually adopt and use it; and schedule, can we deliver within the market or regulatory window. The study returned conditional go, so I would attach a named condition: 'Go from Q3, provided we secure the warehouse management vendor contract and the two migration engineers by the end of Q2'. If the condition fails, I would return to no-go and reuse the do-nothing option rather than drift into an unproven build.