By Steve Finkelstein, Sr. Partner and Co-Founder Experience on Demand
“If we had realized all of the benefits claimed by all of the business cases approved in the past five years we would have twice the revenue and profits.” Finance Industry Executive
The key to business success is not just doing projects right but doing the right projects right! Too many times projects get approved but end up negatively impacting earnings rather than positively impacting earnings. Also, leaderships realizes too late, half-way through the project, they made the wrong decision on the project or underestimated the costs.
How would you answer the key questions below?
- Do we have a formal post project review process?
- Are people held accountable for this project results?
- Have we approved the right projects?
- What percentage of the approved projects achieved their stated benefits?
- Are there projects we should have approved?
- What percentage of the projects were completed on time, within budget?
What is a business case? A Business Case is a formal document which outlines the justification for the approval and start-up of a project. It captures both the tangible and intangible benefits and costs for alternatives to help leadership make an informed decision.
10 Dimensions of an Effective Business Case
- Executive Sponsor for the Business Case Project is in place
- Cross-functional team is used. More dedicated than part-time resources
- Team based goals in place to establish joint accountability
- Post project reviews are scheduled and completed to compare actual versus stated benefits
- Financial projections are in a time line (e.g. 3-5 years)
- Non-financial benefits are also identified – determine their financial impacts
- Alternatives are developed and evaluated. One alternative should be “ Do Nothing –Status Quo”
- A risk assessment is completed with mitigation actions are included
- Implementation plan and required resources are documented
- The business case process is run like a project – project manager, project team, project plan, etc.
Does your organization have a formal business case process in place for non-capital and IT projects?
Would a formal Business Case process, with accountability for results, and a post project review result in better decision making and in more successful projects:
- On time?
- On budget?
- More accurate benefits stated?
- Achieving stated benefits?
Components of a Business Case
|• (A) Business Issue
• (B) Business Objective
• (C) Project Description
• (D) Alternatives Considered
• (E) Critical Success Factors
• (F) Key Business Case Resources
|• (G) Dependencies
• (H) Potential Risks
• (I ) Key Business Case Tasks/Milestones
• (J) Post-Project Review
• (K) Project Benefits – tangible and intangible
• (L) Other Comments
If you are interested in learning more about training on developing an effective business case so your company can start doing the right projects right contact Steve Finkelstein at: 314.409.6869 or email Steve at: firstname.lastname@example.org