THE BUSINESS CASE #2 – Why are we considering this?
- 25 August, 2009 12:45
CIO brings you an ongoing series on project management from Jed Simms on a vital component of any project: the business case.
The first section of a business case needs to justify why we are even considering this project/program. If you can’t justify its reason, rationale and relevance than the project should be immediately culled.
The project’s relevance needs to be established primarily in terms of its contribution to the organisation’s strategy. In one client they had prioritised their projects and a call centre improvement project had been rated number two priority. When we introduced our simple, objective strategy contribution measurement process this number two project disappeared! It had absolutely no relevance to the strategic imperatives of the organisation.
However, very few organizations have a simple way of measuring each project’s strategic contribution. Usually a few vague lines claiming strategic alignment exist which are meaningless, unmeasurable and not comparable across projects — ie useless. Yet the level of strategic contribution should be the first question asked of any project.
Having an effective strategic contribution measurement process is a highly effective way of enabling Sponsors to self-cull their good but irrelevant ideas and initiatives early.
Another key reason for a project can be the costs and risks of doing nothing. A high cost/risk of doing nothing is, by itself, not sufficient justification for your specific business proposal but a justification for doing something. The rest of your business case needs to establish that your proposal is the best approach to addressing these costs/risks.
If a project is ‘mandatory’ (by which I mean required for legal or regulatory compliance reasons) it does not get a free pass; it has to show that either the solution proposed is the least cost solution possible (why spend money when you don’t have to on some fancy solution?) or that the mandatory requirement has been translated into a value-adding opportunity which then has to justify its relative value.
I also add into this section the analysis of the scale, size and complexity of the project so that you can assess the organizational capability required to deliver it. The more complex the project, the more organisational project delivery capability required. Too many organisations take on projects that they just don’t have the capability to deliver successfully. Let’s identify this early and cull it if necessary. At the end of this section you need to have established …
1)That there is a reason and need for this project;
2) It is relevant to and contributes sufficiently to our strategy and its imperatives;
3) It is doable by us as an organization (otherwise, why start?);
4) The alternative costs/risks of doing nothing are too high;
5)And, if a mandatory project, this is a least-cost or the value opportunity solution.
How does your business case process compare? Tell me Jed_Simms@capability.com.au
Further support and useful tools to help you manage your investments, projects and portfolio are available from .
To view the first article in this series, click here.
To view the last article in this series, click here.