The Self Evident Truths of Project Management: Truth #4 - “We don’t do business cases to justify projects; we do projects to deliver business cases!”
Often the only connection between a business case and the project plan is the same project name on the cover page!
Business cases are used to ‘justify the project’ to get approval and funding. Then their work is done and they’re put on the shelf. They may be taken off the shelf again if a ‘post implementation review’ goes out to search for any benefits, but that’s about all.
Many projects even set up a small team to ‘generate the business case’ so that this job doesn’t get in the way of the project and its delivery.
Madness. Talk about upside down thinking. The business case should not be seen as peripheral to the project but should be seen its focal point — this (value) is what you’re trying to deliver.
The problem is that most business cases don’t define ‘what you’re trying to deliver’. They define the costs with just enough (financial) benefits to justify the investment. As a result the business case is largely irrelevant to the project.
So, we’ve got to change the business case and make it value-focused; centred around the value proposition. Then we’ve got to make the project plan value-focused; focused on delivering the value proposition. (Then we’ve got to track and measure the value’s realization, but that’s another story.)
So, we’ve got to go back to basics and reinvent the business case, to restore it to its original purpose — to define in detail the case, in terms of the business outcomes, benefits and value to be delivered, for investing in the project.
Then we can plan our project to deliver this value.
In doing this we can easily compute how much it costs to deliver each business outcome and its associated benefits and thereby optimise the investment — eliminating low value/high cost outcomes. We can objectively apply the 90-60 rule (obtaining 90% of the value for 60% of the cost).
We can then track the realisation of each agreed outcome, benefit and value through the project plan and from the business case.
As a result we can generate more net value for less cost. Sounds sensible doesn’t it? Focusing on value wins. It’s that simple.
© Jed Simms, Australia 2009. Jed@valuedeliverymanagement.com
Further support and useful tools to help you manage your investments, projects and portfolio are available from valuedeliverymanagement.com .
For the previous article in this series visit The Self Evident Truths of Project Management: Truth #3 - ‘Tangible’ Means ‘Measurable’ (Not Just ‘Financially Measurable’).
For other series of project management articles by Jed Simms visit How Do You Know if Your PMO is Successful and "PMO: What’s In A Name?".
Jed Simms is CIO magazine's project management columnist. Simms, founder of projects and benefits delivery research firm Capability Management, is also the developer of specialised project management and project governance Web site valuedeliverymanagement.com
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.