Maximizing Project Value: Developing a Project Business Case
In my first Project Times article (January, 2007), I discussed a new paradigm shift for achieving project success. In summary, this paradigm shift challenges you as a project manager to focus on achieving project business value while executing your projects rather than the traditional focus of just being on time and on budget. To do this I introduced the Project Speed2Value Road Map that was developed based on best practices from the Project Management Institute’s (PMI) PMBOK, Six Sigma, Risk Management, Financial Management, and Change Management. Used on dozens of Fortune 500 projects large and small throughout the world, the Project Speed2Value Road map is one of the most comprehensive approaches within the industry specifically designed to manage the full project life-cycle and track ongoing project performance.
Figure 1-1: Speed2ValueTM Road Map
The first step of the Project Speed2Value Road Map is to develop a Project Business case. In doing so you as a project manager will begin to lay the foundation for achieving project success by obtaining buy-in from top management and get your project approved for execution. This means getting the powers at large to give you the required funding, resources and time to execute the project. Sound simple? It is not by a long shot. With chief executives mandating tighter control over spending, financial support for projects comes at a premium. Resources are limited at best, and there is not enough time to do all things necessary to keep the business running smoothly. If you are like the rest of us, I am sure you have put in your fair share of working more than eight hours in a day, weekends, and holidays on occasion. Am I right? Compound that fact by all the employees in your company. Astounding isn’t it? With that said, I am sure that you are not the only one in your company with a good idea for a project. It is a given that every proposed project out there is in competition for the same resources, limited funding and time to be spent by your company for implementation. Therefore, it is up to you to justify that your project is better than the rest of the proposed projects, so that you are one of the few winners getting the limited resources, funding and time commitments from the powers that be. The key to getting your project approved is your ability to prove that your project, among all others, will deliver business value to the company. This means that you must be able to articulate “how” your project will deliver one or more of the main business drivers: cost reduction, business growth, maintaining operations (e.g. regulatory compliance), increasing speed and efficiency. Keep in mind that these business drivers are why projects are executed. These are the drivers that keep your company profitable and keep your company competitive. Therefore, it is up to you to demonstrate how one or more of these business drivers can be achieved by your project in order for your project to get approved. This is the premise for putting together what is called a project business case.
In simple terms, a business case is a project justification document that outlines a project proposal and plan for authorized funding, resources and implementation. It is a plan for execution and more importantly a plan for achieving project business value. The objective of a project business case is to justify:
- “what” benefit and cost the project brings to the business
- “why” the project is important and should be funded
- “where” the project needs to be implemented
- “when” the project can be implemented
- “who” is required to implement the project
- “how” the project can be implemented with success
A business case is typically mandated by organizational policies and management preferences. The key is that the business case is used to approve a project as well as serve as a baseline for determining project success. Think of the business case as your first benchmark for stating your plan of action as well as measure for success. If all goes right and your project is approved, you will be on your way towards laying the foundation for building a project success plan of action. Like a blue print for building a house, a business case is the blue print for achieving project success. Would you want your house built without a plan? If I you’re going to invest hundreds of thousands of your life savings, wouldn’t you want to see the plan. What type of house it is (3 bedrooms or 4)? Why does it cost so much? Where it is going to be located (facing north or south)? When will it be built? Who is building it (are they reputable)? How will the house serve you and your family in the years to come? Wouldn’t you agree that by answering these questions, you could determine if you want to spend your hard earned money on buying it? The business case for a project is the same thing, but instead of it being your hard earned money to be spent, it is your company’s. Instead of you and your family living in the house for the future to come, it is your company and its employees who will be impacted by the project you propose. As such, the business case is the blueprint for success; it is the plan for a project that will best serve company employees and help make your company more profitable and better off by implementing it. It is therefore up to you to articulate the case why your project will serve the company best and how you plan to make it happen.
Jeff Berman is Vice President of PM tec, Inc.(www.pmtec.com), sought after speaker and author of the best selling book, Maximizing Project Value about developing a winning business case, managing influencers, and the seven principles for business case success. For more than 20 years, Jeff has helped Fortune 500 companies including Gillette, Johnson & Johnson, FMC, CertainTeed and Cytec deliver measurable value from project investments. Jeff can be contacted at [email protected]