Importance of Business Case in Project Management


Mar 13th, 2015

Before commencing any project, a document is mandatory to outline explicitly “benefits” to carry out a project. Benefits should be in quantifiable terms such as increase in profits. This document is termed as “business case”. Every project should have a business case produced by owner of the project such as client or sponsor. The business case defines “why” the project should be carried out, “what” would be done in that project, and tangible and quantifiable benefits for exampleincrease in growth that is often represented by including an investment appraisal.

Albert Lester in their book Project Management, Planning and Control mentioned areas, which should be included in producing a business case.

  • Why is the project required?
  • What are we trying to achieve?
  • What are the deliverables?
  • What is the anticipated cost?
  • How long will it take to complete?
  • What quality standards must be achieved?
  • What are the performance criteria?
  • What are key performance indicators (KPI)?
  • What are the main risks?
  • What are the success criteria?
  • Who are the main stakeholders?

Furthermore, any other relevant information specific to the project that is consideredimportant should be included to help recipients, who are in a position to accept or reject business case.

Business case is to be prepared before starting a project. It is first document that is produced to start a project, if approved.Project manager does not create it rather client makes business case that has direct interest in the project. This person will also oversee the project and known as project sponsor or project champion.

Albert Lester also explained the role of project sponsor is far more than just being an initiator of a project. It includes:

  • Monitor the performance of the project manager
  • Constantly ensure that the project’s objectives and main criteria are met
  • Ensure that the project is run effectively as well as efficiently
  • Assess the need and viability of variations and agree to their implementation
  • Assist in smoothing out difficulties with other stakeholders
  • Support the project by ensuring sufficient resources (especially financial) are available
  • Act as business leader and top-level advocate to the company board
  • Ensure that the perceived benefits of the project are realized

Project sponsor will play a significant role in delivering a successful by assisting project manager.

As has been clarified beforehand, the primary two parts of a business case are “what” is obliged and “why” it is needed. Prerequisites administration is concerned with the ‘what’. Customers, end users, and to be sure most stakeholders have their own particular necessities on what they anticipate from the venture regardless of possibility that primary goals have been concurred. Prerequisites administration is concerned with the evoking, catching, examining, surveying, breaking down, testing, organizing, arranging, and recording of all these distinctive necessities. A large portion of these may obviously be basic needs of various stakeholders and will in this manner be high on the need rundown. However, it is the undertaking supervisor who is in charge of settling on the feasibility or attractive quality of a specific prerequisite and to concur with the stakeholder on whether it ought to or could be joined, considering the expense, time, and execution elements connected with the prerequisite. Once concurred, these necessities turn into the benchmark against which the achievement of the undertaking is measured.

Preferably, all the prerequisites ought to have been joined as clear deliverables in the destinations revered in the business case and affirmed by the venture chief in the undertaking administration arrangement. It is constantly conceivable; then again, that one or more stakeholders may wish to change these necessities either just before or much after the undertaking extension has been concurred furthermore finished. The impact of such a change of prerequisite will must be precisely analysed by the venture chief, who must consider any expense ramifications, impacts on the undertaking project, changes to the systems and techniques expected to join the new necessity, and the ecological effect in its most stretched out sense.

In such a circumstance, the undertaking director should quickly prompt all the significant stakeholders of the extra cost, time, and execution suggestions and acquire their endorsement in the recent past revising the destinations, degree, and expense of the task.

In the event that the change of prerequisites is asked for after the authority begin of the task, that is, after the expense and time criteria have been concurred, the new prerequisites will be liable to the ordinary extend (or contract) change strategy and design administration. This situation can lead to “scope creep”, explained in another article. An analysing system is required to analyse requested change that is called configuration and change control. Following are some features, mentioned in Project Management Planning and Control that should be examined while investigating the change;

  • Feasibility, operability, and time constraints
  • Functionality, performance, and quality requirements and reliability
  • Compliance with health and safety regulations and local by-laws
  • Buildability, delivery (transportability), storage, and security
  • Environmental and sociological impact
  • Labour, staffing, outsourcing, and training requirements

To conclude, business case is the first document produced to explain needs, resources, tangible outputs and intangible outcomes of the project. It explains “what” and “why” and results in quantifiable terms.

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