Business case studies allow governance groups and project selection committees have a consistent basis upon which to judge the absolute and comparative merits of competing bids for the investment funds of the organisation in terms of value, likelihood of return, costs and the associated risks.
Because many of investment decisions are discretionary and all of them ‘compete’ to some extent or another, it is necessary to have a consistent expression of the individual and comparative merit of any given initiative. This is what our business case studies have shown.
Not only does the compelling business case set out the initial justification for an investment, it is also the basis for deciding whether to provide the ‘authorisation to proceed’ (ATP) as the project unfolds, and the actual costs, risks and opportunities for benefit are realised at each of the stage gate reviews.
Understanding and committing to what the value of the competing investment opportunities that candidate projects offer is a critical part of the selection of the project portfolio.
All decisions about the future should take into account risks, the risk of it costing more to achieve the benefits, and the risk of the benefit not being realised in full or at all. So after defining the problem or opportunity that the project is there to address; the risks and rewards of doing so have to be quantified. Categorised appropriately into financial, strategic and risk avoidance, the benefits are profiled, showing the value recovered over time. This typically involves the identification and quantification of the impacts of the necessary business changes, with sets of KPIs agreed.
With the ‘desirability’ in terms of benefits established, the cost and the possible costs of the known risks are calculated to make possible the cost-benefit-risk assessment (COBRA).
Typically a sponsor or a programme will seek support in developing a business case under their ownership. Though usually targeted at a specific difficult case, it is often found that the approach is quickly recognised to have wider application and, where organisations have them, the PMO becomes interested in developing an in-house capability.
The capability assessment results are discussed with the individuals as one of a number of inputs to their personal development planning. In addition, by aggregating the results a profile of the competence of the community can also be presented to management, which is used to identify any generic weaknesses and to plan for, and match capability to the future demand to be made on it.
Our approach to business case studies would typically involve the use of the following tools and models:
We support the development of project-based workshops and provide experts to create business cases, and then using our Reflect-Learn-Apply approach embed the knowledge, skills and attitudes into the organisation.