Business Case and Business Model in EU Projects
In many meetings, I often hear the phrase: “There must be a good business case.” The goal is typically to ensure that the project generates value—both for the customer and for the companies involved. That sounds reasonable, of course. But it’s also helpful to take a step back and revisit the fundamentals behind these commonly used business terms (for example, as defined on Wikipedia—accessible to everyone).
Business Case
A business case outlines the justification for initiating a project or task. It’s usually documented in a structured report that presents the reasoning behind the allocation of resources such as money, time, or effort. The guiding principle is simple: those resources should be spent in support of a defined business need. For instance, a business case might argue that a software upgrade is necessary because it would improve system performance. [1]
Business Model
A business model explains how an organization creates, delivers, and captures value—whether economic, social, or cultural. For businesses, it defines how they operate, how they spend, and how they generate revenue and profit. In essence, the business model is a key component of the organization’s overall strategy. [2]
Strategy and Porter’s Principles
Looking deeper into strategy, Michael Porter identifies three core principles:
• Creating a unique and valuable market position
• Making strategic trade-offs (choosing what not to do)
• Creating fit by aligning all company activities to support the chosen strategy
Put simply, the key strategic questions are: “What business should we be in?” and “How will we compete in that business?” [3]
EU Project Context: From B2B to B2C
When working on collaborative or innovative projects—such as those funded by the European Union—there needs to be alignment between the business case and the business models of all involved partners. EU projects often start with a high-level idea, and partners are chosen early in the process. But as the project evolves, there’s a real risk that the business model and the business case drift apart.
This happens especially when companies that normally operate in a B2B (Business-to-Business) environment are suddenly confronted with a B2C (Business-to-Consumer) challenge. For example, a technology provider may have built its business around serving grid operators or large industries. Once involved in an EU demonstration—like in REFORMERS—they may find themselves in a residential neighborhood, where the business case must be built around the needs, behavior, and economics of individual households.
Options for Alignment
When business case and business model diverge within an EU project, there are several paths forward:
1. Proceed with a partially aligned partner
– Sometimes viable, but risky when scaling up.
2. Adjust the organization’s business model
– Complex and risky; may require a spin-off or new department.
3. Modify the business case
– Rarely ideal in EU projects with fixed deliverables.
4. Bring in new partners
– Often pragmatic; local organizations can bridge the B2C gap.
Lessons Learned
The key lesson is that each partner should contribute based on what they do best, aligned with their business model. Trying to force operational success with misaligned resources often leads to inefficiencies and undermines long-term success.
That’s why it is essential to discuss each partner’s business model early in the project—before diving into technical pilots or consumer engagement. EU projects are at their strongest when they combine the scale and expertise of established companies with the local trust and adaptability of smaller players. Together, they can deliver both the innovation expected by Brussels and the practical value demanded by citizens.
