Shulin DaveSr Manager| Toronto District School BoardMarkham, Ontario, Canada
Process: We have project proposal document leading to a Business case (if approved) which requires a considerable effort on estimation compared to a charter. Some people may comment that Project charter should come first.
Usually, a business case is developed for the purpose of evaluating if it is worth doing something or not. It is a justification for spending resources (people, time, money) to do something.
If the organization agrees with the rationale in the business case then it might decide when and how the idea should be implemented.
In many cases, a project or a program will be chartered to deliver the services or products that the business case was arguing for.
All these would say that the business case should be done before the charter because once you have an approved charter then you have a project or program manager authorized to apply resources to accomplish objectives and this would expect that there is a reason (business case) to do this.
However, if doing the business case itself is a process that require planning, resources then this becomes more of a feasibility project and in this case you will have a 2 phase approach:
- discovery or feasibility that will deliver the complex business case, with a control gate reviewing the business case. If the business case compels the organization that the initiative should be undertaken then you have green light for phase 2:
- implementation of the services or product described in the business case.
This last example is something rather rare in the organization. It might come up prior to a merger, or an outsourcing…
In most situations, the business case can be delivered so only approved business cases will generate projects (and have charters, etc.).
There are some more complications if you approve a charter before having an approved business case:
- overhead: time to plan and organize the activities and cost of a project manager.
- In an organization that has a project portfolio management in place, if the business case is not approved then the project will need to be cancelled and there will be all the related paperwork and effort that will need to be done.
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1 reply by Tina mcalister
Nov 05, 2018 3:21 PM
Tina mcalister
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I am studying for my PMP and so, what I gather is the Business case or Business plan comes before the Project Charter?
Saving Changes...
Elyse NielsenSenior Project Manager| Ascension Health Information ServicesHaines City, Fl, United States
Hi,
Perhaps there is alot of similarity between the project proposal, business case and project charter. It is best to keep in mind the key elements of a project charter.
The elements of a Project Charter are:
The project overview - A project overview contains a description of the business need, purpose, and product or service that is to be provided.
Preliminary roles and responsibilities - This section describes the duties of the project team. This includes people who should be involved and why and how they might be involved. This might include customers, stakeholders, and the project team.
Identification of the project manager - The project manager identification designates the project manager who has primary project oversight responsibility.
A description of the project manager's authority - The description of the project manager's authority outlines the level of authority given to the project manager. This would include financial oversight and level of decision making.
Approvals Signature - This is the approval required from the project's sponsor to give the go-ahead to the project.
Hi Shulin, based on my experience and what PMBOK sais: a business case is an input for a project charter (refer to page 66, PMBOK 5th edition) Saving Changes...
Which comes first? It all depend on reasons to authorize the project. If a Project is authorized based on Customer Request or Legal requirement then a Charter must come first. If a Project is a result of a Market Demand, Strategic Opportunity or Technological Advance then a business case must come first.
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1 reply by Joseph Gherlone
Mar 06, 2019 12:51 PM
Joseph Gherlone
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This seems a very concise and accurate summation. Well put.
Saving Changes...
Tina mcalisterPM Consultant| Nine Peaks SolutionsBend, Or, United States
Jun 03, 2009 5:16 PM
Replying to Sorin Mitrea
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Usually, a business case is developed for the purpose of evaluating if it is worth doing something or not. It is a justification for spending resources (people, time, money) to do something.
If the organization agrees with the rationale in the business case then it might decide when and how the idea should be implemented.
In many cases, a project or a program will be chartered to deliver the services or products that the business case was arguing for.
All these would say that the business case should be done before the charter because once you have an approved charter then you have a project or program manager authorized to apply resources to accomplish objectives and this would expect that there is a reason (business case) to do this.
However, if doing the business case itself is a process that require planning, resources then this becomes more of a feasibility project and in this case you will have a 2 phase approach:
- discovery or feasibility that will deliver the complex business case, with a control gate reviewing the business case. If the business case compels the organization that the initiative should be undertaken then you have green light for phase 2:
- implementation of the services or product described in the business case.
This last example is something rather rare in the organization. It might come up prior to a merger, or an outsourcing…
In most situations, the business case can be delivered so only approved business cases will generate projects (and have charters, etc.).
There are some more complications if you approve a charter before having an approved business case:
- overhead: time to plan and organize the activities and cost of a project manager.
- In an organization that has a project portfolio management in place, if the business case is not approved then the project will need to be cancelled and there will be all the related paperwork and effort that will need to be done.
I am studying for my PMP and so, what I gather is the Business case or Business plan comes before the Project Charter? Saving Changes...
Aside from what the PMBOK says, when you think about the definitions of a Business Case and a Project Charter, in my mind it is logical to have a business case first then the Charter. The Business Case presents the issues and solutions in detail detail detail. When this gets the green light a Charter is done that shapes how the project will be undertaken. Saving Changes...
A business case comes first, the Sponsor pitches the case to the funding Stakeholders. If approved, a Project Charter is completed for the project with high level info and the Proj Mgr is identified.The info in the charter is the constraints for the Proj Mgr & Project against which success will be measured etc... Saving Changes...
Drew CraigSr. Agile & Product Coach| VanguardPhiladelphia, Pa, United States
Two separate documents. No need for a project charter without an approved business case. In other words, without justification from a business case, there will be no project [charter]. Saving Changes...
As Andrew mentioned , both are separate documents.
The Business Case is an assessment and/or feasibility study which becomes an input to the Charter. It is used as a basis for a future project. Saving Changes...
Joseph GherloneCo-chair, Naval-NRO Coordination Group| US Navy, Naval Information Warfare Systems CommandPentagon, Arlington, VA, United States
Sep 07, 2017 2:25 AM
Replying to Bashar Kanaan
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Which comes first? It all depend on reasons to authorize the project. If a Project is authorized based on Customer Request or Legal requirement then a Charter must come first. If a Project is a result of a Market Demand, Strategic Opportunity or Technological Advance then a business case must come first.
This seems a very concise and accurate summation. Well put. Saving Changes...
