Before you justify your project's solution, you first need to define the rationale for the project - why do you need to do the project at all.



Justifying why you need the project

The first section of a value-based business case should justify why you are even considering this project/program/initiative.

If you can’t define the project's rationale and relevance clearly, then you should not even start the project, let alone continue a project already underway.

The project rationale answers these major questions to explain - "Why this project and why now?":

  • What are origins, background, current state?
  • What are the problems or opportunities?
  • What is the strategic contribution?
  • What are the costs and risks, especially for "doing nothing"?
  • If the project is "mandatory", is the delivery approach to cost-minimise or value-add? 
  • Do we have the capability to deliver the project?

What is the Strategic contribution?

The project’s relevance needs to be established in terms of its quantified contribution to the organization’s strategy.

How not to do it: 

One organization had listed all their projects on a whiteboard and the execs voted by putting score marks against each project. One specific project, the Call Center Improvement Project had been rated as the number two priority. When we introduced a simple, objective scoring process based on TOP's strategic contribution assessment tool, to measure each project's strategy contribution, this project disappeared completely from the priority rankings. 
The project had absolutely no relevance to the strategic imperatives of the organization, rather it was simply the "pet" project of the loudest voice on the leadership team. 

Very few organizations have a simple consistent way of measuring each project’s strategic contribution. Usually the business case contains a few vague lines where the project "claims" it is aligned to the strategic imperatives, or there is a tick-here-box for "yes, this project is strategically important."

Sadly, such approaches are meaningless, unmeasurable and neither consistent nor comparable across all the projects being proposed. That is, they are completely useless!

Yet, the level of strategic contribution should be the first question asked of any project. Having a strategic contribution measurement process is a highly effective way of empowering Sponsors to self-eliminate their good-but-irrelevant ideas and initiatives early.

What are the costs/risks of "doing nothing?"

Another key reason for a project can be the costs and risks of doing nothing. A high cost/risk of "doing nothing" is not by itself sufficient justification for your specific business proposal, but is a justification for doing something. The rest of your business case needs to establish that your proposal is the best approach to addressing these impending costs/risks. To understand why avoided costs/losses are not 'benefits' read further.

Is it 'mandatory'?

If a project is ‘mandatory’ - by which we mean it is required for legal or regulatory compliance reasons - it still does not get a free pass. You have to show either:

  • the solution proposed is the least-cost solution possible - why spend money when you don’t have to on some fancy solution? 
Or,
  • the mandatory requirement has been translated into a value-adding opportunity which then has to justify its additional value.

Do we have the capability?

In this first section of the Business Case,  we also include an analysis of the scale, size and complexity of the project so this can be compared to the level of organisational capability required to deliver it. The more complex the project, the more organisational  delivery capability required.

Too many organisations take on projects that they do not have the capability to deliver successfully. If you identify capability as an issue early in the planning process you can take action or even cull the project if necessary.

In Summary

By the end of first section of the business case, you should have established that …

  • there is a reason and need for this project
  • it is relevant to and contributes sufficiently to your strategy and its imperatives
  • the alternative costs/risks of "doing nothing" are too high
  • and, if this is a mandatory project, the proposed approach is least-cost or incrementally value-adding justified
  • it is do-able by you as an organisation - otherwise, why start?

When your business case can clearly articulate the rationale for the project - "why this project and why now?" - you create the prerequisites for successful execution.

So - review some of your recent business case documents and assess, did they clearly do that and what would you need to do to correct them?  

 

Topics: Business Case




 





Revision History

First published: Simms, J. (Sep 2009) as "The Business Case 2 – Why Are We Considering This?"

Updated: Chapman, A. (March 2020), Revisions and Corrections