17 February 2009

Business cases

A business case is a case for doing something.

“Here is my case for change!”

That something could be to either ‘run a project’ or ‘build a product’ or ‘improve a process’ or ‘renegotiate a contract.’ It could be other things also.

Business cases do two things;
  • Describe an exploration of the costs and benefits of doing something, and
  • Explain how you’ll measure when or whether you are ‘done’ at the end
The key attributes of this description are;
  • Describe
  • Doing something
  • Costs
  • Benefits
  • Measuring
  • When you are done
(If you go to your corporate intranet right now and look up the business case template that is provided I wonder if the template focuses you in on these fundamental areas?)

Here is what I think you need to focus on to build up a business case. Regardless of what your template drives you towards, these are the things I think you need to focus on.
  • What is the problem or opportunity you are addressing?
  • What’s your vision for the solution?
    • Check this vision off against the SMART objectives criteria – Specific, Measureable, Achievable, Relevant, Time based
    • Are there multiple parts to your solution? If so, break them down (via a WBS or PBS) and set SMART goals for each solution component
  • How capable are you of getting to these solutions?
    • What are the costs? Effort & duration estimates – analogous at first, then more refined, Capital, Cost of organisational inefficiencies
    • What are the risks? Cost your risk in terms of money and time
    • What are the environmental constraints?
  • What benefits will your organisation get from doing this?
    • Use the balanced scorecard or a similar model to help ensure coverage of all key benefits areas. (Financial, customer/stakeholder, process control/quality and building in flexibility for the future)
  • How will you measure your benefits? What is the baseline you are measuring against? How will you isolate this project’s benefits from other initiatives and environmental changes?
  • How will you know when you project or product is complete?
    • Completion criteria can be defined up-front
    • Where agreement on completion criteria cannot be obtained, focus on a process to help define ‘done.’
If you address these things, will your business case do what it needs to do?

Photo by Pikturewerk CC @ Flickr

2 comments:

  1. Very well put.

    I would like to add some more points. Corporation is generally driven by a Strategy to achieve its long term goals. I feel that your questions may be answered in the plan keeping in mind a few important aspects:

    Does the project fall into the Strategy? Will the proposed implementation plan help achieve or move away from its Strategic goals?

    This is because, today, due to economic environmental factors, every act in an organization especially receiving public money is in the eyes of media and all actions are under tremendous scrutiny. Addressing the above issues will likely speed the process of approvals of projects.

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  2. Thanks for the well-written article! Indeed, forward-looking project managers realize that to avoid failure, they should build the business case for their projects by getting intimately knowledgeable about the reasons why sponsors approved their projects. Too many projects get the axe because of the lack of business cases that justify their existence. When project sponsors begin to see projects only in terms of costs instead of potential rewards, there are higher chances that the projects would be canceled.

    We have shared some insights on this topic here: www.executivebrief.com/blogs/building-a-projects-business-case

    ReplyDelete

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