Fred Obiero teaches us the importance of the business case and gives us some solid tips to help prepare and present a business case that shows the value of your project. In this way, your project will be recognized as an important part of your organization’s project portfolio.
Before any new projects are approved and funded by organizations, a Project Manager normally has to provide a business case that delivers a compelling justification of the project’s benefits and its alignment to the organization’s strategic direction. It is important to obtain input from all key stakeholders while developing a business case because the Project Manager will be able to gather details on all other possible alternatives and their cost/benefit analyses that will be used to determine whether a project will be approved or de-prioritized.
There are several reasons as to why a business case is needed but the three main reasons are to:
- Showcase value that a project or program would create to an organization
- Obtain approval for funding and resources that will work on the project
- Prioritize projects within an organization
Below are some best practices to utilize when creating a business case.
Perform Extensive Research
Research performed by Project Managers while developing a business case should include exploring the market and performing competitive analysis, reviewing business cases from previous similar projects, interviewing key stakeholders to gather input, and examining other project alternatives. Findings from this research will be summarized on the business case so that leadership teams can evaluate them before a formal decision is made on the approval status of a project.
Evaluate and Compare all Options
This is a pivotal step in the creation of a business case as it is where the Project Manager performs an evaluation of all the shortlisted options and alternatives and assesses how they are aligned to the organization’s goals and strategies, the opportunities they provide to the organization, and the costs associated with their implementation. Furthermore, a high-level risk analysis is also included for all the options so stakeholders can get a better understanding of their potential impacts to the project and the organization.
Summarize and Present your Business Case
Typically, there will be several options that stand out once the evaluation process is completed. The Project Manager will then need to present these options to the Executive Sponsor to get their buy-in, then to the project approval committee and finance teams where they’ll assess the options and associated costs, along with reviewing the recommended option. The Project Manager needs to articulate how the recommended option will bring strategic benefits to the organization, how any identified risks will be mitigated, and which resources will work on the project – at least at a high level.
It is highly recommended that Project Managers practice their business case presentations with their peers and teammates so that they get comfortable with their details. There have been many situations where projects that had great potential benefits to an organization failed to get approved because the Project Manager did a poor job of presenting their business case. Nothing can be left to chance, and it is always good to practice your presentation skills so that you give your project the best chance of being approved and funded.
Even though extensive research goes into putting together a business case, not everything gets added to it as it is supposed to be a high-level document. There are templates from existing project management tools and applications that make the process of documenting a business case easier for the Project Manager. Below are some of the common components of an effective business case:
- Executive Summary
- Project scope and Timeline
- Strategic Benefits
- Return on Investment
- High-level Risks
About the Author
Fred Obiero is an IT professional and Technology futurist who has thrived in implementing and leading Project Management Offices for companies such as Envision, Anthem, and HP. He is currently a VP of Product and Client Engagement at MyBasePay and an Executive Host on The Ivy Podcast and a co-author of the book The PM Imperative.
He is PMP-certified and holds three master’s degrees: MBA, MSMIT, and MSM.