Sunday, November 8, 2015, AM | Leave Comment
All projects are done to respond to a business need. Even non-profit organizations need to justify the reason a project is being taken and how resources will be expended against the project.
The following four steps will equip you with the information you need to create such a business case.
Determine the Source and Motivation behind the Project
The first question you need to answer when it comes to creating a business case for your project is who is behind this project?
You need to have a clear understanding of why this project is being taken and who will be receiving value from the completion and implementation of the project.
For example, it may be a no-brainer that the source of the project comes from a salesperson who just sold a million dollar deal to one of your largest clients.
The motivation is to get the project underway and complete so the company can be paid for their services.
However, there may be projects that are less straight-forward. It’s important to know if this so you know what you may be up against as the project moves forward.
Define How the Project Aligns to Your Strategic Plan
Every company should have strategic initiatives that help move the company forward.
Examples of these may be that the company wants to move into a new market, release a new product, or introduce new and ground-breaking technology.
All projects need to align to the goals and strategies of your organization.
Calculate the Financial Value
The return on investment this project will generate is a critically important part of establishing a business case.
On a personal level, you want to know if you put money into an investment that it will provide a certain percentage return.
The goal is to not sink funds into something and lose money.
The same principle applies (even more so) on a corporate level. Executives want to know that if they invest [x] in this project that they will receive [y] in return.
Defining ROI can take on a number of different forms. It may be dollars that are invested, manpower, or even opportunity costs that are incurred because of not working on some other project.
Regardless of what it is that it will take to complete this project, it can always be tied back to money.
Show How Similar Projects Have Done in the Past
A real estate agent will pull comparable sales of houses that are similar to yours in your area when they want to determine the value of your home.
The reasoning is that if a particular house sold for a certain amount then this house should sell for something close to that amount.
It’s the same thing with a project that you are trying to get off the ground by putting a compelling business case together.
Providing the details of similar projects such as how long they took, how much they cost, what impact they had on the bottom line, and other relevant details can instill confidence that this project will do the same.
What do you have after following these four steps?
You have a clear definition of the project and motivation behind it, you know how it supports the company’s strategic initiatives, a calculation of how much the company will make off such an investment, and a level of confidence that it can be accomplished.
This column is © copyright to www.Method123.com and originally appeared in their weekly project management tip newsletter.
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