By John Herman PMP, CQE, MPM.
There are many excellent articles and templates for demonstrating Business Justification, but a root-cause analysis reveals a very basic lesson in business acumen. There are only four major reasons for undertaking any business process or project.
Increase revenue: Obviously, increased revenue is expected to lead to increased profits, and may also lead to increased market share, brand recognition, and other favorable results.
Reduce costs: Reducing costs will also impact the bottom line. However, costs can’t be reduced below zero, so there are more limitations associated with reducing costs than with increasing revenue.
Improve quality: Although sometimes difficult to measure, improvements in the quality of products and services impact customer satisfaction and growth of the brand.
Attain or maintain compliance: Government regulations must be addressed or the business could be forced to close, or suffer irreparable damage to the brand. Some aspects in the compliance area include taxes, safety, and privacy.
And, of course, projects can cross boundaries and have more than one business justification.
It’s always a good idea to inform the project team why any particular project is being done. Not only is it good top-down communication, it will improve the team’s business acumen.