Project Business Case

 

photo source: mischiru 

 

Why do you start a Project?
There are definitely some goals or objective that needs to be achieved by a Project.

But then you may ask why we should go ahead with a project?
You know that you have a well defined goal or objective that needs to be achieved, now a goal can be achieved using various means and techniques. You can follow any technique to achieve your goal then why you need a project. Is there a real worth(Business or Personal) to go for a Project.

Here comes into picture the need of a Project Business Case document.

A business case captures the reasoning for initiating a project or task. The purpose of a Business Case is to justify the project expenditure by identifying the business benefits you’re going to deliver.

Mumbai: Bandra-Worli Sea link Project

Mumbai is one of the largest city of India and it is basically a Island city. To connect the Central Mumbai with Western Suburb of city there is a Highway through Mahim that connects both part of city.

Somewhere in 1999 the city council decided to build a sea link as an alternate route between the Western Suburb and Central Mumbai. Hence the project to build Bandra-Worli sea link was proposed.

Now if you see above example the main objective to connect Western Suburb and Central Mumbai can be achieved using the Mahim Causeway. But then what was the need to create a alternate route that is too costly and which required one of the great engineering effort to build a highway over a Sea.

The business case suggested were:

1. To reduce the congestion on Mahim Causeway and hence a better Traffic system.
   
2. The Sea Link reduces travel time between Bandra and Worli from 45–60 minutes to 7 minutes. This is a huge time saver, now one can save more than 70 percent of time traveling from one end to another.
   

 

What does a business case contains:

• Business Problem or Reasons for the project.
  
• Identify Alternate Solutions.
  
• Identify a preferred solution and reason for selection..
  
• Costs
  
• Benefits - Tangible
  
• Benefits - Intangible
  
• Timescales
  
• Investment Appraisal
  
• Assumptions and any other supporting text
  

What are the factors raise the need to create a Business Case:

• Market Demand- In order to retain or gain market position, companies may commission new projects. For Ex:  A company facing competition in market authorizes a project to build Customer Support System for a better customer experience.
• Organizational Needs- To run an organization, the organization needs to develop and improve process needed for various operational activities. This will need the organization to authorize a new project to develop/improve processes. For Ex: To effectively manage the IT Projects the IT department may authorize a project to develop a Project Management System.
• Customer Request- The customer may request a new product/services or ask for customized solution. For Ex: A wedding planner commissioning a project of wedding ceremony based on the customer requirement.
• Technological Advances- As technology advances one may need to discard the old technology to stay efficient. For Ex: A company authorizing a project to develop software application for mobile phones with advances in smart phone technologies.
• Legal Requirement- Legal requirement affect how the organizations operates. For Ex: The new anti-smoking law required the company to authorize a project to develop smoking guidelines in the office premices.
• Ecological Impact- Go Green or Save the Earth is the slogan of the day. For Ex: A car company authorizing a project to build a solar operated car to reduce the emission of harmful particles in the environment.
• Social Need- After all we all live in a society. For Ex: The city counsel authorizing a project to develop a shelter house for the homeless.

How does the Business Case helps making a decision:

• It tells the the top management why we want to start a project.
  
• It will tell the stakeholders what we are going to achieve from this project.
  
• The business case will be referred while monitoring the project progress if we are aligned to the business goals.
  
• The business case will also be guiding point if we need to terminate a project if it is not aligned with the business case.
  

Who creates the business case?

Creation of Business Case is a  task that is usually the responsibility of stakeholders and sponsors. If a Project manager realizes that he should build a business case for whatsoever reason, then he should work closely with clients, sponsors and other stakeholders.

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