How many of your projects got started just because someone said they should? When times are tough – and in the UK there is certainly a tightening of belts happening – we need to make sure we are working on the right projects.
The pipeline is so important, and that’s why your business case needs to stand out – so you can secure the funding to get the work going.
Don’t think business cases are necessary? Let me change your mind. Here are 5 reasons why your project needs a business case.
1. A business case shows your project aligns with strategy
We do projects to make a difference and deliver change within the organisation. That change should be aligned to the strategy because then we can be sure it delivers to the overall plan for the business.
Your project is more likely to get funding if you can demonstrate it supports the organisation’s objectives.
2. A business case shows the work is commercially viable
Do the numbers stack up? This is what we ask ourselves in our project office – all the time. However good the idea, the project has to be viable. You need to be able to secure the supplies, equipment or resources at a rate that makes it financially attractive.
Use the business case to show the rationale for make-or-buy decisions, or explain why you have selected a particular supplier.
3. A business case shows the project will be a long-term financial success
Part of the work involved in putting together a business case is the thinking. It means you’ve secured support from various parts of the organisation. It means you’ve done the maths. There is a justification for delivery and you can evidence the thought process that sits behind that.
Generally that means that there is a commercial reason for doing it: for example updating old equipment that supports bringing in new business, or launching something that will sell. You should show consideration for costs along the whole product lifecycle, including decommissioning anything that is no longer required and the cost of managing the asset once it is created.
4. A business case shows you’ve selected the right response to a challenge
Business cases typically make a least a nod to other options that have been considered and rejected. There should be an options appraisal section that looks at a range of solutions and summarises pros and cons.
The document focus on the solution you are recommending, outlining why that’s the best choice. It should be clear why that route forward is the best fit for the organisation’s goals and capacity to deliver.
5. A business case shows the project management structure is in place to support the work
It’s no good securing funding for an idea but not having the first clue about how to implement it. The business case will have a section on implementation plans, covering what resources are needed (and how much they cost) and how long it will take. There should be an outline, high level plan with milestones. There will probably be some high-level risks, assumptions and constraints – the bones of a project initiation document or charter.
Help decision makers understand what they are signing up to and what is required to deliver the change, should they go ahead and approve it.
Writing better business cases
Categories: business case
The UK government (HM Treasury and the Welsh government) has developed the Better Business CasesTM model which as you can guess by the name, aims to help people write business cases that are better. The model has been around for a few years but I have only come across it recently.
It prompts teams to review the investment decision from 5 different angles. Overall, looking at business cases in the round should give you a holistic view of whether the investment is worth it, enabling teams to make the right decision.
The 5 dimensions recommended by the model are:
Let me explain what each of those are about, so you can see if using this lens might be useful for your own business case evaluation.
Under this dimension, you would look at the drivers for change. We assess projects for strategic fit, which is how closely they align to the vision and objectives of the organisation.
Not all projects are strategic, but the more strategic the initiative, generally, the more likely it is that the business would benefit from making the investment. If a project moves you closer to your strategic goals, then it’s probably worth doing.
Under the economic dimension, look at the business case for value for money. Does it make economic sense to choose this option?
The model shoehorns in environmental and social considerations under this economic heading. I’m not sure that they fit well here and I wonder if it wouldn’t have been better to call out sustainability and social responsibility in a different segment to bring more attention to these domains.
This is the lens through which to scrutinise the option that represents the best value, however you define value.
The commercial case should stack up for any business case. In other words, can we do it? is it viable? Do we have the supplier relationships (or can we get them) that would make this possible? Is there a market for the solution we are going to build?
You’re considering whether it makes commercial sense to invest in this way. The business case might be sound in all other respects, but if customers don’t want what you are making, then commercially it might not be the right decision.
The financial lens is probably what we most associate with business cases. Have we got the money? Do the numbers stack up?
This is where you review return on investment, return on capital employed, net present value, budget, internal rate of return, resource costs and all the other financial measures that your business case template makes an allowance for.
These monetary decisions may be heavily weighted in your organisation, especially if you aren’t cash-rich. Many business cases are fully decided on the financial aspects (rightly or wrongly) because I think managers expect the other points to have already been taken into account when the recommendations and solutions are put together.
The final dimension of the model is management. This area reflects how the work is going to be delivered and whether the project is being started in the best possible way to set the organisation up for success.
In this section, you’ll be reviewing the proposed project management approach, delivery methods, whether the team is already in place, what resourcing is required, how the governance and oversight will work and so on.
I think this section is most important for projects where more than one organisation is involved as it should set out the terms for any joint venture or partnership.
Overall, the point of actively reviewing each of these dimensions is to make sure that the business case stacks up from all angles and that the investment is truly worth it.
Do you use these categories, themes, lenses (whatever you want to call them) when you are putting business cases together for projects or reviewing them? If not, do you think they would be useful additions to specifically call out to ensure that a case is a rounded, holistic, representation of the work and the decision required? Let me know in the comments!
1. Get involved with business cases and proposals
First, lobby to get involved with business cases and proposals. The more delivery expertise we have involved in the initial stages of a project, the more likely it is that the project will be able to actually hit its goals.
Have you ever been involved with a project where you’ve been handed something to do and the sales people have made promises that you can’t deliver on? Then you’ll know what I mean!
When project people are involved in business cases, in my experience you’re more likely to end up with a timescale that’s achievable and a resource plan that reflects the real amount of resources likely to be consumed by the work.
It’s even better if you can lobby for a seat at the table when the 3-year plans are being drawn up, so your top level project people, like the Head of PMO, get involved in creating the strategy in the first place. That provides a real insight into what initiatives are coming and how the delivery teams can help.
2. Use the project assurance function as a check mechanism
Project assurance is a way of checking that what you think you can do is actually achievable. It’s their job to pick apart your plans and proposals and apply a sense of real-world pragmatism. They can also help identify whether there are any resource gaps, strategic holes or other issues that you haven’t seen.
After all, as a project manager I’m sometimes so close to the information that I can’t see the bigger picture enough to realise that this project will clash with something that someone else is working on – but project assurance has the bigger picture and can point that out.
If you don’t have a project assurance function, ask a colleague for their opinion and talk them through the plans, asking them to basically pull them apart. Ideally, to be able to add some strategic oversight to your plans, this should happen around the time of the business case or PID. By the time you’ve got to creating a schedule you’ll be looking for a different kind of peer review.
3. Share what you know – but only what you know
My third tip is something I learned from Tony Meggs, Chief Executive of the Infrastructure and Projects Authority in quite an old article now that he wrote for Project magazine, but it has stuck with me. He said: Only announce what you know.
We know this in theory, so it’s not news to you, I’m sure. However, many project managers are ‘encouraged’ to share dates before we are ready, or pushed into committing to dates publicly before we have all the information to support the fact we can deliver to them.
So, if you want to be a strategic operator, only share what you know to be achievable. That goes for delivery methodologies as well. Meggs talked in the article about not committing to anything unless you know it to be true, including how the work would be delivered. If you are going to partner with someone and there’s a robust contract in place, by all means announce it. But don’t announce your intentions before they are fixed in stone because if it doesn’t happen you’re then having to walk back on the messaging and that can be damaging.
We can do this as project managers on a small scale, by giving our teams the space to come up with the best methods and timescales before we announce them to sponsors, but also on a strategic level, by ensuring there is a communications plan in place that supports the bigger picture messaging for the project, programme or even the portfolio.
Do you do any of these already? How are they working out for you? Let us know in the comments!
Q1 tends to be a time when new budgets are approved and that means we’re starting to see requests for contracts with suppliers trickle through the PMO. It always takes a few weeks for budgets to get released, even if the intention is to start the work in January. By February, project teams are ready to get started, knowing that any further delay in the admin is going to put pressure on their ability to deliver by the dates from the business case. And that’s why all the supplier agreements seem to be floating around at the moment.
The infographic below talks about the major groups/people involved in putting together and approving supplier contracts for new third parties, but it’s the same people involved in renewing deals and reviewing an existing supplier to see if we want to give them more work.
As with any internal process, this is probably a bit specific to certain environments and types of contract, and you might not see all of these roles in your business.
Equally, there might be some other key positions that have a part to play – I know that in one set of contract negotiations for a multi-million software project, my project sponsor attended every conversation, along with the technical architect. And just as well they did too: it created a great sense of common purpose and everyone was on the same page from the beginning.
Take the suggestions below as a starting point for opening up the conversation with your colleagues if you are creating new supplier agreements, so you can make sure the right people are involved from the start.
5 Red Flags for Business Cases [Video]
Categories: business case
Let’s say you’ve been asked to look over a business case, or your sponsor has drafted a basic business case and has asked you to get it ready for the next review.
In this video, I’ll give you 5 things to look out for: 5 red flags that are worth spotting before your business case gets too far through the process of project acceptance, because if you don’t resolve them, the project will be really hard to manage and you’ll have all kinds of expectation management issues.
Enjoy the video!
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