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Why the Organization Needs a Business Case

Why the Organization Needs a Business Case

If a project is commissioned without consideration for the value it will deliver (i.e., without a Business Case), a number of serious problems can arise:

(1) The organization wastes valuable resources on projects that don’t help the organization achieve its objectives. This leaves fewer resources available for more valuable projects.

(2) The organization has no clear basis to prioritize projects, for establishing what is important. Without a Business Case—and some organization-wide agreed measure of “value”—there is no means of determining which projects are important, and which are less so. Many organizations use “the loudest voice” approach, in which the managers who yell the loudest (or who have more influence, or are more intimidating) get what they want—even when their projects have no relationship to the organization’s objectives! The organization needs a more rational and effective means of allocating its limited resources. Without this the organization’s strategy languishes with no clear assurance that the strategy is being progressed by any particular expenditure of resources.

(3) There is likely to be disappointment after the completion of the project, as the stakeholders wonder why the project is not giving the great results they imagined—very likely because the project manager didn’t know what those expectations were, or was focusing predominantly on what was being built, rather than on how it would be used.

(4) No target is established for why the project’s deliverables are being created—other than the meeting of technical specifications. This allows the project team to get over-engaged in technical details, losing sight of the goals of the project. At project completion there is no clear way of determining whether the project delivered value. Both occur because no benefit goals were established before the project began.

(5) The organization has no opportunity to improve its project management maturity. One key learning from each project should be: “how well did the resource usage support the organization’s goals?”