Stanley E. Portny - Project Management For Dummies

The initial information describing a proposed project is often presented in a business case, which may contain, but isn’t limited to, the following:

High-level statement of the business needsReason action is neededStatement of business problem or opportunity the proposed project will addressStakeholders affected (see Chapter 4for details on stakeholders)How it fits into the organization’s (product) roadmapScope of proposed project (see Chapter 5for information on scope statements)

Analysis of situationStatement of organizational goals, strategies, and objectivesStatement of the root causes behind the problem or factors helping to create the opportunityDiscussion of the organization’s current performance in this area compared with the desired performanceIdentification of known risks for the project (see Chapter 10for more on handling risk)Identification of critical success factors for the projectIdentification of the decision criteria for choosing among the different possible options for addressing the situation

Discussion of the recommended course of action to pursue in the project

If necessary, a formal needs assessment may be conducted to clarify the business needs to which this project relates. A needs assessment (also called a gap analysis ) is a formal study to determine the actions an organization must take to move from the currently existing situation to what’s desired in the future. This study consists of the following components:

1 Defining the aspect of organizational operations you want to address and the measures you’ll use to describe performance in this area (this identifies the subject of your analysis)

2 Determining the current values of the measures you selected in the first step (this defines the current state)

3 Defining the values of the measures you would like to have exist in the future (this describes the desired state)

4 Identifying the gaps that exist and need to be filled between current state and future state

5 Proposing actions that will help the organization move toward the desired future situation (these are the steps to get from current state to future state)

The organization’s goal is to fund those projects that, when successfully completed, would provide the greatest benefits to the organization and have the greatest chances of being completed successfully. Therefore, the business case should do the following:

Clearly describe the project’s intended outcomes

Identify the organization’s mission, goals, and operating objectives that’ll be affected by the project’s results

Identify other projects addressing the same or similar issues that have been completed, are underway, are being planned, or are being proposed and clearly explain why this project will provide greater benefit when completed and has a greater likelihood of being successfully completed

The business case should be prepared by a person who is external to the project, such as a senior manager of the unit on which the project will focus or a product manager if one exists. The project initiator or sponsor should be at a level where they can procure funding and commit resources to the project.

When you’re thinking about submitting a possible project for consideration, be sure to check for existing organization processes or procedures to which your submission must conform. In particular, look for information about the following items:

Dates by which your submission must be received

Topics that must be addressed and/or formats in which your submission should be prepared

Criteria (and relative weightings) that’ll be used to evaluate your submission

After it’s received, the business case for a project should be reviewed to determine its conformance with the organization’s needs and priorities. If the initial submission is approved, a project charter is prepared (by the project manager) containing all the information required to decide whether the project should proceed to the organizing- and-planning phase of its life cycle. The project charter, when approved, authorizes the existence of a project and provides the project manager with the authority to use organizational resources to support the performance of project activities.

The project charter may include, but is not limited to, the following information about the products, services, or other results the project will produce:

Project name

Project purpose

Assigned project manager, responsibility, and authority level

Name and authority of the sponsor(s) authorizing the project

High-level project description, boundaries, and key deliverables

High-level business requirements

Measurable project objectives and corresponding success criteria

Project approval requirements (who decides the project is successful and who signs off on the results)

Summary milestone schedule

Preapproved financial resources (budget)

Overall project risk

Key stakeholder list

Project exit criteria

Two studies that may be performed to generate additional insight into the potential value and likelihood of success of the project being considered are a cost-benefit analysis and a feasibility study. The following sections discuss the types of information each seeks to provide and describe the documents produced during the development of a project charter.

A project manager should be assigned as soon as possible after the business case is accepted and certainly before the project enters its organizing and planning phase. This will allow the project manager to participate in the development of the project charter and, in this way, become familiar with the reasons for the approaches planned and the results to be produced.

A cost-benefit analysis is a comparative assessment of all the benefits you anticipate from your project and all the costs required to introduce the project, perform it, and support the changes resulting from it. Cost-benefit analyses help you:

Decide whether to undertake a project or decide which of several projects to undertake

Frame appropriate project objectives

Develop appropriate before and after measures of project success

Prepare estimates of the resources required to perform the project work

You can express some anticipated benefits in monetary equivalents (such as reduced operating costs or increased revenue). For other benefits, numerical measures can approximate some, but not all, aspects. If your project is to improve staff morale, for example, you may consider associated benefits to include reduced turnover, increased productivity, fewer absences, and fewer formal grievances. Whenever possible, express benefits and costs in monetary terms to facilitate the assessment of a project’s net value.

Consider costs for all phases of the project. Such costs may be nonrecurring (such as labor, capital investment, and certain operations and services) or recurring (such as changes in personnel, supplies, and materials or maintenance and repair). In addition, consider the following: