Initiate a Project
The first step of the project management lifecycle is the initiating phase. During this phase, one of your key objectives is to ensure that the project will deliver strategic value to the organization.
During the initiating phase, examine potential candidates for future projects and ask yourself these questions:
Should we do this?
Are we able to do this?
If we do this, what kind of process will we have?
These three questions are answered by researching and creating the following documents:
A business case: Justify undertaking a project. This document also evaluates the benefit, cost, and risk of alternative options and provides a rationale for the preferred solution.
A feasibility study: Provide an in-depth study of the chosen solution to determine if the project can be delivered after considering technological, economic, legal, operational, and scheduling factors.
A project charter: Clarify who the decision-makers and stakeholders are, the project cost and budget, major milestones, a list of deliverables, and a communication strategy. This document describes how the project should progress.
Considering how these artifacts relate to one another, it’s worthwhile to examine each of them in-depth.
What Is the Sequence for Project Approval?
A business case helps decision-makers answer the question, "Should we do this project?". More than that, it helps clarify:
What is the impact if we do nothing and ditch this project?
If we do the project as presented, is it enough of a change or business benefit? Or do we need to do more?
The main person to make this decision is called the project sponsor. The business case effectively presents a value-creating opportunity to the organization.
And if it is decided that this is indeed an excellent opportunity, know that you will have more than one option for achieving this objective.
If the business case is approved, the next step is to take the proposed solution and answer the question, "We want to do this, but is it possible?" The feasibility study does a more in-depth analysis of the proposed solution and determines if it can be accomplished.
Once you've done a business case that proved the pertinence of a project and followed it with a feasibility study to ensure success is possible, you should then write a project charter framing the boundaries of the project scope and describing how it will unfold.
Let's now look at how to create a business case for a project.
Why Write a Business Case?
The business case helps decision-makers determine if a potential project offers enough strategic and financial value to warrant more serious research.
The business case author should write it with the audience in mind and remember that they may not know as many details about the organization's current situation. The audience may also not be aware of potential future opportunities that could arise should the project succeed. Therefore, the author must describe the project benefits in terms of measurable potential revenue, increased market share, operational efficiency, and customer satisfaction.
The business case will lay out a future course of action that benefits the organization. Decision-makers must know the approximate project cost, delivery time, and expected benefits. These factors will help determine whether to advance to the next stage or not.
The benefits of the business case are that:
Decision-makers have a short formal document that they can approve or reject.
Everyone who works on the potential project will have a document that frames the scope and specifies measurable outcomes that define success.
What Is the Structure of a Business Case?
The outline of your business case will typically contain:
A preface
A table of contents
An executive briefing
An introduction and background
An analysis (including benefits, risks, expected costs, and considered options)
A conclusion, recommendations, and next steps
An appendix
Some elements require minimal explanation:
A preface is an introduction to the document written by the author.
A table of contents lists the document's chapters and subchapters.
An appendix is a set of supplementary information found at the end of the document.
The executive briefing, introduction, analysis, and conclusion sections are worth a deeper dive.
Executive Briefing
The business case is intended for executive decision-makers (particularly project sponsors). As this audience is typically extremely busy, an effective business case enables such decision-makers to quickly determine the nature of the business case by cutting straight to the point. The executive briefing offers recommendations and summarizes analysis' results. A section titled "Action Items" further aids the decision-maker in understanding why they are reading this document and what potential outcomes should be considered.
Introduction and Background
A business case supports a course of action by explaining a particular opportunity. Describe potential desirable outcomes in the following terms:
The current context of the organization.
The purpose of the project in relation to the organization's strategy.
The specific scope of the project (including what is out of scope).
Expected measurable outcomes, including financial outcomes.
Analysis
The analysis section of the document describes “how we got there.”
You must assure decision-makers that you’ve considered all relevant factors if you want their approval, including:
Assumptions
Costs
Benefits
Risks
Strategic options
Conclusion
The conclusion of the business case will typically restate the opportunity the project aims to address, the recommended approach, followed by the time, cost, and budget for delivering this project.
If the business case is approved, you will proceed to the next step - writing the feasibility study.
Let’s Recap!
The main outcome in the initiating phase is is to assert whether a project should proceed.
A business case answers the question: “Should we do this project?”
A business case should have the following sections:
An executive briefing
An introduction and background
An analysis
A conclusion, recommendation, and next steps
The project sponsor will approve or deny a project based on the outcome of the business case.
In the next chapter, we will focus on the next step after the business case is approved: the feasibility study, which then needs to be approved by the relevant decision-makers. Let’s go!
