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The Project Business Case - PMP Certification Training | EPMA

The business case is a document that helps decide if the project is desirable, achievable and viable. It is a key document that the decision makers use to decide whether the given project should be taken up. It helps them clarify, if possible quantify estimated costs, risks and the planned benefits. The business case is a guiding document for the project and the project has to perform within the directions set by the business case. The project manager will use this document extensively to keep the project aligned with it. As a PMP examination aspirant, you need to realize the importance of business case for keeping your project on the right track.

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The Project Business Case - PMP Certification Training | EPMA

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  1. The Project Business Case - PMP Certification  Training | EPMA  The business case is a document that helps decide if the project is  desirable, achievable and viable. It is a key document that the decision  makers use to decide whether the given project should be taken up. It  helps them clarify, if possible quantify estimated costs, risks and the  planned benefits  The business case is a documented economic feasibility study used to  establish the validity of the benefits. A project manager is appointed  formally when the business case is ready and a decision to undertake  the project is already made.  The business case lists the objectives and reasons for project initiation.  It helps measure the  project success at the end of the project against the project objectives.  The business case is a project business document that is used  throughout the project life cycle. The business case may be used before  the project initiation and may result in a go/no-go decision for the  project.  The business case considers all the aspects that will impact the project  and the organization if the project is taken up. Before the business  case, a needs assessment is performed. The needs assessment  documents. Business goals and objectives, issues, and opportunities  and recommending proposals to address them. The results of the  needs assessment may be summarized in the business case document.  The project sponsor is generally accountable for the development and  maintenance of the project business case document. The project  manager is responsible for providing recommendations and oversight  to keep the project business case, project management plan, project  charter, and project benefits management plan success measures in  alignment with one another and with the goals and objectives of the  organization. Usually, the project manager is not officially appointed  when the business case is being developed, but preferably, he should  be involved in developing the business case . The process of  development will enable him to grasp the background, the expectations  of the customer, expectations of senior management and all the other 

  2. key stakeholders. Involving an experienced project manager in  developing the project business case, helps him manage the project in  a better way. It increases chances of project success  Project managers should appropriately tailor the noted project  management documents for their projects. In some organizations, the  business case and benefits management plan are maintained at the  program level. Project managers should work with the appropriate  program managers to ensure the project management documents are  aligned with the program documents  The business case is usually divided into different sections  Executive Summary:​ This section highlights the salient features and key  points of the document. Expected ROI is also documented in this  document.  Reasons​: This section describes why the project is being undertaken. It  elaborates the thought process for the project detailing why the project  should be taken up . The section is elaborated on business needs. The  business needs analyze the situation, make recommendations, define  evaluation criteria among many important things. The reasons can  include:   ● Business Needs like:  ○ Need for action to be taken  ○ Documentation of what problem or opportunity is being  addressed  ○ What is the scope  ○ Impacted stakeholders  ● Analysis of the situation:  ○ Identifying  ■ Organizational goals and strategies  ■ Root causes of the problem  ■ Opportunity contributors  ■ Capability gap analysis (Required capabilities vs.  available capabilities)  ■ Known risks  ■ Critical Success factors  ■ Decision criteria for various assessments  ■ Categories of criteria like Must/ Desired/ Not  necessary  Business Options:​ The three basic options when considering a potential  project are:   1. Do nothing: The do nothing option is the one option which, if  preferable to all other options, means that the project is not 

  3. viable. In this case, there isn’t a project to invest in, and the  organization can continue with the existing business as usual  activities.  2. Do the minimum  3. Do something.   The ‘do the minimum’/’do something’ options represent potential  projects each with their own costs, times, benefits and risks.   The Business Case should analyze each option, so that the project  stakeholders can determine which presents the best investment for the  organization.  The business case should very clearly state why one decision is better  over the other from the above 3 options (e.g. it will deliver the best  return on investment).   The board or the program manager will take a decision to go ahead  based on this information. Rest of the information in the business case  is based on the assumption that the best option is approved  Expected Benefits:​ The project may bring in many different kinds of  benefits resulting from it. For example, investing in new machinery  might bring benefits in terms of greater productivity and lower  maintenance costs. Investment in training may realize benefits in the  form of greater staff productivity. Sometimes, the benefits may not be  easy to quantify. For example, if a hospital invests in new equipment  may bring improvements in patient care, which would be an obvious  benefit to the patient, but the financial benefits may be harder to  quantify.  Where possible, benefits should be made measurable (e.g. the  percentage increase in sales), to enable an informed judgment about  the value of a project.  Expected dis-benefits:​ – A dis-benefit from a project is an actual  consequence of a project which is perceived to be negative by one or  more stakeholders (e.g. a drop in productivity whilst the project is  ongoing). Dis-benefits are not equivalent with project risks. Risks are  uncertain events that may or may not occur whereas dis-benefits actual  negative consequences of the project that will occur. Dis-benefits  should be analyzed as part of the investment appraisal (see a later  section), to ensure that they do not outweigh the expected benefits of  the project.  Timeline: ​ Two toes if timelines are documented in this section. The first  one discusses project duration. How much time a project should take  to deliver the project. The second timeline talks about ho much time will 

  4. be needed for the benefits to be handed over or transitioned to its  rightful owners  Cost:​ The business case documents two types of costs. First one is the  running costs of the project..The second is operations and  maintenance cost of the project deliverables. This section also  documents possible funding arrangements for these costs  Investment appraisal​ – the business case is basically a feasibility study  for the project. This section of the business case contains a comparison  of the aggregated benefits and dis-benefits against the risks and costs  of the project along with any ongoing operational or maintenance  costs. The objective of the investment appraisal is to assess the value of  the project as an investment  Major risks​ – this section contains a summary of any major risks  associated with the project, including an evaluation of their likely  impact, and plans for dealing with their occurrence. These risks are  taken into consideration by the Project Board when deciding whether to  proceed with the project both when the project is starting up and also  at the end of each management stage. If the project is deemed as too  risky, then the Project Board may of course decide that it isn’t sensible  to proceed.  Project End Review:​ Once the project completes all the deliverables, the  benefits are compared with the business case to validate if the business  case was realized. The Benefits Measurement Plan specifies how to  measure the deliverables against the business case.   The business case is a guiding document for the project and the  project has to perform within the directions set by the business case.  The project manager will use this document extensively to keep the  project aligned with it. As a ​PMP Certification Training​ aspirant, you  need to realize the importance of the business case for keeping your  project on the right track.  For More Information, Visit Us -    Website - ​https://effectivepma.com  Our Blogs - ​https://effectivepma.com/category/blog/  LinkedIn - ​https://www.linkedin.com/company/effective-project-management-academy  Facebook -  https://www.facebook.com/Effective-Project-Management-Academy-111236520492435  Youtube - ​https://www.youtube.com/channel/UC4xyyWiYxE2rsMgvdsZRNSQ 

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