The end does not always justify the means!
A business case provides justification for undertaking a project, programme or portfolio. It evaluates the benefit, cost and risk of alternative options and provides a rationale for the preferred solution.
Benefits are associated with costs and also with risks. If an organisation needs to understand costs associated with digital materials then it must also understand benefits. Benefits can be used to justify costs through the development of business plans.
The Sponsor (or in PRINCE2 the “Executive”) owns the Business Case but will often delegate its preparation. – The Project Manager or Business Analyst may physically write the Business Case. – For larger projects, it is possible that suppliers, users, subject matter experts and external consultants may contribute.
Why business cases fail.
Many business cases fail to get approval simply because they focus heavily on the cost of the project, and neglect to clearly articulate and calculate the value that the investment in a particular technology can deliver.
According to a 2017 report from the Project Management Institute (PMI), 14 per cent of IT projects fail. However, that number only represents the total failures. Of the projects that didn’t fail outright, 31 per cent didn’t meet their goals, 43 per cent exceeded their initial budgets, and 49 per cent were late.
Why do good projects fail?
Execution: Project team members fail to carry out designated activities properly. Integration: Team members execute all tasks flawlessly—on time and within budget—but don’t knit all the project pieces together at the end. The project doesn’t deliver the intended results
Project Strategy – What is a Project Business Case
Following on from the outline business case documented in the Project Brief. Complete this road map to building a business case. The out come will be why you can justified the project to the project board. The business case is used to say why the forecast effort and time will be worth the expenditure. Along with the benefits that will be realised by completing the project.
Why document the Business Case?
The business case describes the reason and justifications for undertaking the project. It is the most important document. The project information drives the project decisions. It is continually checked to ensure progress is made against the project objectives. It is developed at the start of the project and is maintained throughout the project. It is reviewed by the project board at each key decision point.
To estimate the estimated cost of development and implementation. Weighing these against the risks and the anticipated business benefits and savings to be gained. The business change will be considered along with wider factors than just development costs.
Key quality factors to follow are:
- Can the benefits be justified?
- Are the project plan and business case aligned?
- Are the reasons for the project consistent with corporate programme strategy?
Explain the reasons for undertaking the project?
Explain the following: The business change. The technology change. The regulatory or statutory change. the improvements programme. the corporate strategy.
What options have been considered for the project?
A description of the different options that have been considered for the project. The chosen option should be indicated, with a summary of the reason for the choice.
Describe the Project Benefits
List and name with details of the financial and non-financial benefits.
The financials should be costed and the investment appraised in terms of improved cash flow, reduced stock levels and regulatory compliance. Provide measurements against each item.
The non-financial benefits describe. These for example could be company image; improved staff moral, improved customer response time, customer satisfaction and reduced staff turnover. Again provide evidence of how these will be measured.
Provide a summary of the key risks to the project. Document in a risk log.
Cost and Timetable
Give an indication of when costs are likely to be incurred over the life cycle of the project by month and by stage of the project. Validate against your project plan, staffing requirements and capital purchases plans.
Provide a costs benefit analysis of the project. Indicate the return on investment. Summarise the costs and benefits. Forecast when the benefits will break even against the costs over time.
Benefits Realisation Plan
It is most likely that the benefits in the business case will not be realised until well after the end of the project. State how the benefits will be monitored and realised. An individual needs to have responsibility for ensuring that the benefit is realised. In most cases this is the project executive responsibility and senior user or change manager.
That’s all folks!
Previously we discuss the project brief
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