Three types of Business Cases for Product teams

Product Managers in software companies that struggle: you are not incompetent but simply misaligned! As a PM, the best way to solve misalignment with your peers, leadership and other departments, is creating a business case for your roadmap initiative(s). A business case explains the impact on business and financial goals. It also provides a clear view on uncertainties and how it relates to other initiatives when prioritizing. They are, above all, a communication tool.

We identified three levels in a business case:

1. Communication not accounting - We call this a 'Back-of-a-Napkin' business case. It's a simple impact calculation with an investment, return and impact on business and/or financial goals. Often used in the discovery phase to create alignment with sales, CS and other departments.

2. Roadmap ready - At this stage we understand the uncertainties of our initiative. Based on the scope we can derive approximately how much capacity we require and even list the roles we need. We also have buy-in from the other departments at this stage.

3. Execution ready - We have gotten rid of many of the uncertainties in the business case and have a good understanding of the risks. We have connected one or more metrics from our ecosystem and have added a timeline for our initiative. Fully ready to execute and track what is happening with the impact.

Do not make the mistake of having business cases for everything. Some things just need to happen. Just ensure you take 10-25% of the available time for that kind of work.

Key Takeaways

Product Manager misalignment isn't incompetence. It's the absence of a clear business case that explains impact on business and financial goals while surfacing uncertainties.

Level 1 (Back-of-Napkin): Simple impact calculation with investment, return, and business goals, used early to create alignment with sales, CS, and other departments.

Level 2 (Roadmap Ready): Uncertainties documented, capacity requirements derived by role, buy-in secured from other departments, ready for planning and prioritization.

Level 3 (Execution Ready): Risks mapped, uncertainties reduced, connected to product metrics, timeline set, and tracked against real impact data; fully ready to execute and measure outcomes.