Identifying Risks in the Business Case: Too Early, or Essential?

Colleagues, based on my recent work on several business cases for new project proposals, I find it highly beneficial to identify potential risks at this early stage, even if it might lead to a project being refined or, in some cases, rejected. My approach typically involves a subjective evaluation for contingency appointment, where I balance risk probability (on a scale of 1 to 5) with its potential impact (also 1 to 5). Subsequently, I associate these risks with their potential schedule window of exposure and the associated budget needed to mitigate or cover the risk if it materializes. This detailed early assessment provides insights, allowing for more informed decision-making and ensuring that project proposals are robust, realistic, and account for potential challenges from the outset, ultimately strengthening the overall business case rather than weakening it.

Colleagues, I am currently involved in a project from an African country where negotiations and contracts are complete, but execution is delayed due to pending bank financial approvals. As a team member waiting for initiation, this experience has reinforced my view that a preliminary risk assessment during the business case phase is highly valuable.

Even with limited information, assessing strategic, financial, regulatory, resource, and stakeholder risks upfront helps gauge both feasibility and resilience. My approach is to categorize risks, rate likelihood and impact on a 1–5 scale, and map them to the project lifecycle with indicative mitigation budgets. This produces a simple heat map that enables quicker, more informed decision-making.

In my view, early identification of risks doesn’t weaken the business case—it strengthens it by ensuring proposals are realistic, transparent, and supported by clear mitigation pathways.

Best regards,
Ramesh Sahoo

Francisco Herrera, thank you for raising such a relevant and often under-discussed topic.

In my experience (particularly in strategy-intensive or high-stakes (environments) identifying risks during the business case phase is not only beneficial, but essential. Why?

1. Risk shapes value: The value proposition of a project isn't just about expected benefits.
It's about net value and that includes potential downsides.
Ignoring risks at the business case stage often leads to overestimated ROI or underprepared execution plans.

2. Decision integrity: From a governance and ethical perspective, transparent risk identification at this early stage supports better decision-making. Hiding risks to “get the project approved” erodes trust and leads to fragile sponsorship later on.

3. Better design upfront: Early risk thinking can drive smarter solution design, even reshaping scope or phasing.
I’ve seen this prevent future rework and enhance stakeholder alignment.

That said, a few nuances:

- The goal at this stage isn’t exhaustive risk identification, but strategic risk scanning: What could fundamentally derail the viability or value of this initiative?

- Categories I often assess early include: strategic alignment risks, regulatory blockers, resource availability, stakeholder resistance, and financial volatility.

- There’s a risk of “analysis paralysis”, especially if early risks are not framed with proportionality and mitigation intent.

Bottom line: I believe early risk identification is an act of ethical leadership, not pessimism. It invites better dialogue, sharper design, and stronger sponsorship.

Curious to hear what other members consider must-check risk categories in the business case phase.