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Business Case and Investment Analysis Experiences?
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I’m presenting at a PMI UK Chapter event on Oct 5th on the subject of Investment Analysis for Project Managers would welcome input from the PM community. I am interested in your experience as a PM and your involvement in investment analysis and also your awareness of the assumptions that drive the business case value.

In your industry what is your experience of investment analysis and awareness of the business case value and key underlying assumptions?

As a follow up question what business case assumption could have the biggest impact on the project you are currently working on?
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Network:1277



I have to work a lot in changing the mind inside the organizations (including actual) I have worked in. The change is this. Benefits will be achieved by the product/service/result to be create not by the project itself. That is critical to understand. Then who was in charge to define it (business analyst in general) must lead the creation of all related to investment analysis and business case. On the other side, monetary value in today world has the low importance (general speaking) thinking about others (that when achieved will create monetary value benefits) like those derivated from Critical Success Factor technique to define benefits. To take into account in general, stakeholder analysis is critical (to present the business case).
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1 reply by Tim Podesta
Sep 29, 2017 1:43 PM
Tim Podesta
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Sergio, thank you for your reply. I agree that the outcome of the project and change is the real driver of benefits and value. In many cases the value is intangible but I believe that it is possible to assess three types of value - tangible, less tangible and intangible. This is a part of business case and investment analysis that I have a lot if energy for - and maybe a subject for a future presentation I could offer to the PMI UK Chapter.

In simple terms I believe there is a benefit decision tree based on the following.
- tangible benefits from direct revenue increases or cost savings
- less tangible benefits such as indirect cost savings and cost avoidance
- intangible benefits which are not directly linked to bottom line revenue or cost but can be measured e.g. time savings - which can be tracked and through well chosen metrics converted into implied cost or revenue benefits.
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As to your follow-up question, Tim, I would say the biggest impact assumption would be that the project's product, service or result will still be needed and useful when delivered.
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1 reply by Tim Podesta
Sep 29, 2017 1:28 PM
Tim Podesta
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Stephane, thank you for your reply. I agree that the demand or need for a project outcome is a major assumption in a business case and investment analysis. In my experience the endurance of the project outcome is a big driver -a normal project might have an expected life of 10 years, and +/- even a coulee of years can either double the project value or wipe it out to zero. The ultimate downside as you say would be there being no demand or need for the product or service at all.
Network:694



Sep 29, 2017 12:15 PM
Replying to Stéphane Parent
...
As to your follow-up question, Tim, I would say the biggest impact assumption would be that the project's product, service or result will still be needed and useful when delivered.
Stephane, thank you for your reply. I agree that the demand or need for a project outcome is a major assumption in a business case and investment analysis. In my experience the endurance of the project outcome is a big driver -a normal project might have an expected life of 10 years, and +/- even a coulee of years can either double the project value or wipe it out to zero. The ultimate downside as you say would be there being no demand or need for the product or service at all.
Network:694



Sep 29, 2017 10:23 AM
Replying to Sergio Luis Conte
...
I have to work a lot in changing the mind inside the organizations (including actual) I have worked in. The change is this. Benefits will be achieved by the product/service/result to be create not by the project itself. That is critical to understand. Then who was in charge to define it (business analyst in general) must lead the creation of all related to investment analysis and business case. On the other side, monetary value in today world has the low importance (general speaking) thinking about others (that when achieved will create monetary value benefits) like those derivated from Critical Success Factor technique to define benefits. To take into account in general, stakeholder analysis is critical (to present the business case).
Sergio, thank you for your reply. I agree that the outcome of the project and change is the real driver of benefits and value. In many cases the value is intangible but I believe that it is possible to assess three types of value - tangible, less tangible and intangible. This is a part of business case and investment analysis that I have a lot if energy for - and maybe a subject for a future presentation I could offer to the PMI UK Chapter.

In simple terms I believe there is a benefit decision tree based on the following.
- tangible benefits from direct revenue increases or cost savings
- less tangible benefits such as indirect cost savings and cost avoidance
- intangible benefits which are not directly linked to bottom line revenue or cost but can be measured e.g. time savings - which can be tracked and through well chosen metrics converted into implied cost or revenue benefits.
...
1 reply by Sergio Luis Conte
Sep 29, 2017 5:25 PM
Sergio Luis Conte
...
Agree with you. Just a comment: benefits are achieved thanks the product/service/result to be created by the project not by the project itself. And in our case we have two type of benefits: tangible and intangible.
Network:1277



Sep 29, 2017 1:43 PM
Replying to Tim Podesta
...
Sergio, thank you for your reply. I agree that the outcome of the project and change is the real driver of benefits and value. In many cases the value is intangible but I believe that it is possible to assess three types of value - tangible, less tangible and intangible. This is a part of business case and investment analysis that I have a lot if energy for - and maybe a subject for a future presentation I could offer to the PMI UK Chapter.

In simple terms I believe there is a benefit decision tree based on the following.
- tangible benefits from direct revenue increases or cost savings
- less tangible benefits such as indirect cost savings and cost avoidance
- intangible benefits which are not directly linked to bottom line revenue or cost but can be measured e.g. time savings - which can be tracked and through well chosen metrics converted into implied cost or revenue benefits.
Agree with you. Just a comment: benefits are achieved thanks the product/service/result to be created by the project not by the project itself. And in our case we have two type of benefits: tangible and intangible.
Network:694



Sergio, thank you for your reply. Do you have an example of tangible and intangible benefits your could share

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