THEME 2: BUILD THE BUSINESS CASE


Building a business case is one of the key parts during the initiation phase of any advanced project. Badly produced business cases will make organizations very nervous. This is particularly true of advanced projects because of the very large investments that are often involved. If the case is badly written then it is likely that the company will continue to prevaricate about the project. This will result in more time being used than is necessary before the project is fully commissioned. It is therefore extremely important that you ensure that the business case is produced efficiently and to the highest standards.

Normally the business case is the responsibility of the project sponsor and because of this many project managers feel that they should not waste time working on it. They do not believe that it is their responsibility to ensure its success. Instead project managers spend their time working on the other three initiation phase project themes: stakeholder management, long-lead item tasks and early roles and responsibility definitions. You should not do this. In advanced projects you cannot leave the success of the business case to someone else. Regardless of whose responsibility it is to complete the business case it is too important for you to ignore it. You must get actively involved in the production of the business case since it is this document that will normally secure you the needed project resources. Actively supporting the project sponsor in the project's business case production is something that you must do.

Often the project sponsor will welcome any offer of support in the production of the business case. However, whilst this enthusiasm will make it easy for you to become involved, you need to exercise caution. Many projects have floundered because project managers and their teams have, wrongly, taken over the production of the business case. Frequently this is done with good intentions, for example to try to ensure that the business case production remains on target. However, despite project managers' good intentions it can end up leaving the project sponsors feeling sidelined. As a result the project sponsors sometimes withhold their signature when it comes to the final approval. Skilful project managers must ensure that this does not happen.

To ensure that project sponsors feel that they are driving the process, you must approach the business case production in a methodical manner. This can be difficult since people are often very unsure at the start of an advanced project about the detail of what they want to achieve. Project sponsors can explain their desired strategy but normally they cannot explain any of the detail. This is unfortunate since project sponsors are also the people who want to see the detail before they are willing to support the case for committing substantial resources. This is a natural way of acting for most people. In general people find it difficult to commit to a high-level strategy without it being backed by significant amounts of detail. They want to be able to understand on a practical level the tasks and activities. Unfortunately this can prove very frustrating for project managers. They are working on something that is not their responsibility and they are being told that the result is not detailed enough.

To overcome the difficulties and get the business case successfully produced you should follow two simple steps. These steps are normally independent of the life cycle being used: 1) Meet the project sponsor. 2) Set up a project steering group .

Meet the project sponsor

Arranging a meeting with the project sponsor and building a strong rapport with the sponsor is the first step to establishing a successful path to the completion of the business case. By the end of your first meeting you should have established a number of goals. These goals should lead to the completion of the business case. At this stage the goals can be set out simply on a sheet of paper with three or four dates against which measurable outputs have been defined. It is possible that at the end of this first meeting the dates and activities will not be fully agreed. When this happens a follow-up meeting should be arranged before you leave the first meeting. As a minimum it is recommended that the outcome of the first meeting is a draft of the business plan production schedule. A suitable form for capturing the schedule, with some sample text, is shown in Figure 1.1.

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Figure 1.1: Business plan production schedule

At first glance the format of the plan might seem odd, but with minimum work it is simple to understand. The chart shows a funnel lying on its side. This is to indicate the lack of understanding at the beginning of the business plan production. The funnel indicates this improving over time towards clarity at the end of the business plan production. The funnel is included to remind you that you don't have to understand everything at the first meeting.

Along the top of the chart are three time zones (more could be added but three is normally sufficient). These time zones group together the uncertainty about the project requirements. Uncertainty in these requirements means that the project cannot provide details about the implementation. This means that any business case produced at this stage will be fuzzy in its justification for the project. Therefore it is acceptable for the goals and associated measures for the tasks in zone 1 to show reasonable uncertainty in the project requirements. For example, this could mean a large number of requirements being missed from the initial project requirements list. As the work progresses, however, the clarity should improve. By the time the business plan production reaches zone 3 the clarity should have improved dramatically. The goals and associated measures for zone 3 should be clear and unambiguous. When zone 3 has been exited there should exist a clear understanding of what the project must ultimately deliver.

Once you have agreed with the project sponsor the production plan for the business case you next need to help the sponsor develop the material to allow the business case to be written. In some cases this will mean only the production of a very simple paper, perhaps 600 to 1,000 words in length. However, often it means a significant amount of work and the development of a macro plan. The development of the macro plan is a major undertaking and therefore it is dealt with separately in Chapter 2.

Set up a project steering group

At this stage you and the project sponsor should have a business case production plan that you both believe in. This will include sufficient detail to ensure that you are confident of achieving the production of the business case in the given time. It will allow you to argue your case with others to enable you to secure the resources that you need to proceed. However, it is likely that you will now need significant support from others in the organization to enable you to produce the business case. Generally this is achieved by enlisting the help of a project steering group.

Often at this stage a project steering group will not have been formed . If this is the case then you should form the group. In practice it is helpful if you start the formation of this group in parallel to the production of the business case. To form the group you need to gather together a group of senior managers within the organization. These managers need to have significant authority and need to be able to authorize the release of funds or resources to support your project. It is likely that you will already have involved a number of senior people in the project. Normally these people are self-selecting and can be easily coerced into joining the project steering group.

The plan for the business case's production should point you to a date for the presentation of the finalized business case for approval. However, you should not wait until this date before starting to work with the steering group and its members. Instead you need to spend time with the various members of the group explaining in detail the business case. As you explain the detail you should seek their opinion and you should then use that to influence the content of the business case and its production. Prior to the first steering group meeting you and the project sponsor should agree who the chair will be. This is normally the most senior manager present or sometimes the project sponsor. You should meet with the proposed chairperson and explain the business plan production schedule in detail and the different opinions that you have heard from the other steering group members.

At the first meeting of the steering group the project sponsor should present the business case production schedule. The sponsor should be clear what he or she is seeking from the steering group. Generally this will be resources, funds, hardware, etc to enable the business case to be produced. Often this requires a short paper seeking approval in principle for the project. It will set out the basic resources required in order to progress to a full business case and associated project plan. If you, and the project sponsor, have properly briefed the steering group then the outcome of the meeting should be a formality . The meeting should result in the approval of the business case production schedule and the initial paper seeking basic resources in support of the full business case and project plan. When approval has been achieved you can normally take this as a good indication that you have gained senior management support for the project.




Advanced Project Management. A Complete Guide to the Key Processes, Models and Techniques
Advanced Project Management: A Complete Guide to the Key Processes, Models and Techniques
ISBN: 0749449837
EAN: 2147483647
Year: 2007
Pages: 69
Authors: Alan D. Orr

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