This week I received a call from a large Financial Services Company who was seeking help with business case development. They had a higher than normal rate of project failure as well as some missed opportunities for investment and they had traced it back to the source – the initial business case, or lack thereof.
The request and focus on the business case as a key factor in project failure has certainly become more prominent this year with many more companies recognising this as a significant factor in project failure.
It’s certainly not surprising as many of the project managers I work with have not even seen a business case and, when I ask what the strategic objectives for the project are, or how the project aligns back to the organisational goals well, there is a pregnant silence. What is even worse is the total lack of awareness of the initially agreed deliverables.
When you get right down to it, in what to me seems like 90% or more of the cases, the initial business case is developed by the sales or business development team—not by the project and/or procurement specialists.
In many companies, it is the business development or sales team that seeks and responds to the new business enquires that ultimately result in a new project start up and, this is well before a project team has been assembled. In some of the larger, corporate companies the procurement team will manage these new business opportunities but, in the main it comes down to the Business Development team.
My own experience illustrates the point well. I was in charge of commercial education and projects and so my team and I would respond to client requests and formal tender opportunities by teasing out the customer requirements and deliverables, putting them into an RFQ or RFT format outlining how we would deliver the required product or service and then costing them accordingly. Oftentimes during the selection process, my team would make a presentation and promise the client all sorts of additional benefits that may ultimately win the contract. Once the contract was signed and a project team in place, all the details the project manager needed to run the project was written in the tender response documents however, these additional promises or value adds were not often recorded in any detail and so the project team may have little or no understanding of the promises made.
The business case—that is whether the project was feasible, strategic and profitable—was decided in the main by me and my senior team. I would run my eye over the response and informally check that the proposed project was aligned to the university and/or faculty goals, and that it could be done—that is that the methodology, timeframes and costs made sense and that there was a profit margin built in. But rarely did we develop a full blown business case and/or complete a cost benefit analysis in any formal sense to objectively weigh up the pros and cons and make sure the proposed new project fit with the organisation’s strategy, that it was viable, affordable and optimal value for money not to mention achievable and/or deliverable.
The frightening thing is that this is business as usual. When I ask current project managers how they got the project they’re working on, or who developed the initial documentation, it is almost always the sales team. That is, a sales team team sourced for its ability to chase and make the sale. A team of selling experts whose focus is on making target and achieving sales. Not always the most well equipped team to be submitting the project details such as deliverables, time and budget!
A good business case provides the evidence to support decision-making and assurance to all stakeholders of responsible action. It involves close scrutiny of all relevant financial and non-financial aspects of a proposed project to ensure that the best possible solution is selected for a given set of circumstances.
So then let me ask you, how often does your company develop a business case prior to bidding for, or commencing a new project?
How can you be sure the projects your teams are currently working on have been adequately scrutinised? And, finally,
How often does the new project manager receive a copy of the business case or even the tender response documents prior to commencing their new project?
If you’ve answered negatively for any or all of these questions then you need help to (a) focus on the business case and its importance for the company and the viability of the projects you run and, (b) make sure that your project team gets immediate and early access to the reasons why their project is important to the company, the agreed delivery model and global budget.
NOTE: The College now has an online/workshop program Better Business Cases™ that will assist you and your team to effectively scrutinise proposed new projects to ensure that it is the right sort of investment, affordable, and offers value for money for shareholders and/or customers and, to enable project managers to ensure they link their project to the strategy and the agreed project deliverables along with the key budget implications.