The first stage of the project management process is to understand the reasons, or the business case, for the project. This may seem obvious for some projects, however it is important to know the rationale and business justification for the proposed work. All reasons for the project, regardless of how seemingly important, must be tested for validity and provide adequate justification. This early stage is driven by the project requester.
The Project Sponsor
The key project requester will often become the project sponsor and this is the key decision-maker on the project. The project sponsor is ultimately accountability for the project's success or failure. The project sponsor defines their need for this project, their expectations, requirements and constraints. By having a clear understanding of what the project sponsor wants, the project manager is able to effectively manage the delivery.
Why Have a Business Case?
The business case allows the business to:
- Decide if the perceived benefits of the project justify the cost of the project.
- Assess the benefits against the organisation's stategic objectives.
- Determine if the benefits and costs as outlined are realistic and achievable.
Any business with typically have more projects than is feasible, either cost-wise, time-wise or resource-wise, to embark on. Decisions and choices must be made and the business case is critical to this process.
The Project Manager
It is the project manager's responsibility to deliver the project and he or she is accountable to the project sponsor. The project manager may often work with the project sponsor and other key stakeholders to gather information and prepare the business case. The business case represents the business's objectives, aims and high level needs for the project, therefore it is essential that the business drives the business case process. With an agreed business case, the project manager can proceed with organising the project.
What Should Be in a Business Case?
A business case for a project should contain:
- Assumptions
- Business benefits (tangible and intangible)
- Background information on how the need for this project has arisen
- Business strategic alignment
- Constraints
- Cost of not proceeding
- Costs
- Deliverables schedule & timescales
- Desired business outcomes
- Financial budget
- Funding
- Project controls
- Project plan (high level)
- Risks
- Roles & responsibilities
- Resource requirements
- Scope (what's in and what's out)
- Stakeholders
- Strategic alignment to organisation's objectives
Project Initiation
Before embarking on any project, it is essential to assess whether it is the right decision, or not, to proceed. The business case process allows all people involved to determine whether this project is viable, whether it can and will deliver the proposed benefits, and whether these benefits strategically support the business's direction. A thorough and comprehensive business case allows the business to make accurate decisions and for the project to proceed with a solid understanding of it's purpose and objectives. Rushing the business case has only short term gains; in the long term it can take significantly more time to re-do work and correct mistakes that could have been avoided through a comprehensive business case.
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