Selecting Projects And The Business Case

Selecting Projects

Organizations often need to increase efficiency. To achieve efficiency improvements, the organizations often analyze the situation and explore different possible solutions. The organizations also need to ensure that they apply a non biased approach in selecting projects.

One of the more popular solutions sees the adoption and application of technology and technological processes as the answer to many different types of problems, including the efficiency problem. This emphasis and reliance on technology as the solution can be a biased view that can interfere with the proper analysis of the problem and proper project selection methods. As a result of the technology bias, many technology projects have been started, that if they were in other domains, may not have been. So the point that a project manager must make sure to address, is to protect the organization from selecting a project based on bias, rather than on an objective analysis of the problem. A well informed project manager can do this, because the manager can inform the superiors of the right information. The project manager must have a thorough understanding of the technology and technological processes that are proposed to be a part of the project. In this way, the project manager can then provide critical information to the “project selection leaders”. The critical information involves things such as how much time, effort, and resources will actually be required on the project. Project selection leaders need to be reminded with a realistic view, as this will cement in their minds the idea of the true costs of the project. This will then need to be compared with the benefits, and again, the project manager will need to address the issue that the benefits and compensation of the technology project may be much lower than what is expected. In short, the project manager will make it possible for the project selection leaders to accurately compare costs and benefits in their selection of projects.

When the company leaders are selecting the project, they will think about the costs and benefits of the project. The benefits are the reason why a project is launched. A more formal way of describing this, is to refer to the benefits as the “business case”. It is in the “business case” where a project manager documents the benefits. In this document, the needs of the project, the budgets, and timelines are listed. The easiest way to remember the business case, is to think about the purpose of it. The purpose of the business case is to provide leaders with the necessary information required so that they can determine if the project should be funded. The business case will help the organization to justify their actions, to justify the project based on a comparison with return on investment and the costs. At least four things should be part of the business case.

The Benefits – Look at the benefits and justify the cost by analyzing the return on investment.
The Cost – The development, life cycle, and total cost of ownership should be included.
The Risk – The main risks to the project, the risk of not doing the project, the probability that main risks will occur, and also, what the potential impact of these risks are.
The Results – The result the project will yield.

A feasibility study could also be included in the business case. Not all business cases need a feasibility study, but when the project is very complicated, is a new type of project, or has a high degree of risk, then a feasibility study can be included. The feasibility study determines whether there is a good reason to do the main project, and whether the project can be done according to time, cost and scope objectives. If this feasibility study concludes that the project is indeed feasible, then a high-level requirement, also known as product description can be created.

 

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