Friday, 27 May 2011

Project and Programme Management #03: Business case

The Business Case

As noted in my previous article, it is vital that you clarify the project or programme overall objectives and scope with the sponsor. Once you have done that, the next task is to write a business case for your project. A business case explains:

  • Why – the reasons for doing the project;
  • What – the outputs of the project (or outcomes of the programme);
  • When – approximately how long it will take;
  • Where – where delivery will take place: not only the physical location, but the business location (e.g. the Finance Department);
  • Who – the people who will do the work, and also the people who will be affected;
  • How – the approach, e.g. in-house or contracted out;
  • Cost – how much it’s going to cost and what the return on investment may be;
  • Risk – what might go wrong and how will we try and avoid it;
  • Options – what other options are there, and why is this one the best.

Usually, to make the document sound more professional, you use headings like Justification (why), Objectives (what), Timescale (when), Business context (where), Resources (who), Approach (how) and Cost-Benefit Analysis (cost). Risk is… risk!

Why is it so important to have a business case?

  • It is the key document for making a decision about whether the project is viable;
  • It creates a baseline that can be used to assess project success;
  • It is a device that can be used for change control: if there is a proposed change in scope this can be more easily identified (i.e. it’s something not in the business case), and controlled (i.e. identify impact on business case, make decision, update business case).

Who creates the business case?
The mandate (previous post) gives you the foundation for the business case, so you’re not starting from scratch. Ideally, you won’t be on your own. In my experience the sponsor – and indeed the business – usually expects the project manager to write the business case. Unfortunately this is not ideal, because one person cannot possibly know all of the above. So the first step in writing a business case is to identify a group of people who can help contribute the required information. Working with such a group has several advantages:
  1. It gets the job done;
  2. It helps build understanding among some of the key stakeholders;
  3. It can help to identify people who are for and against the project;
  4. It helps establish rapport and team working for later on.

The business case does not have to be a long, complex document – especially if your project is quite small and simple. However all projects should have one.

In order to keep this post to a reasonable length I will deal with the individual sections of the business case in separate posts. The next instalment will look at how to assess the size and complexity of your project.

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