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Business case considerations

Identifying the need for PPM comes from understanding how the business operates, its projects management maturity level, and the processes used.

The overall objective of any PPM process is to balance project investment and expenditure across the business so that the enterprise can quickly make decisions around trusted information, aiding the change of direction within the business. In other words, the purpose of PPM is to enable the enterprise to identify projects not aligned with agreed strategy, and redirect resources to other value creation activities within the strategy. Therefore a key component of developing the initial business case is providing a breakdown of business-as-usual activities compared with project-centric activities. Doing so will allow key sponsors to understand strategic alignment issues and those projects that provide value to the corporate strategy and objectives. Management’s goal should be to break up the investment into pots of tactical spend to support the strategy, making sure the spend is correctly directed into strategic value and stakeholder value coupled with shareholder value.

PPM should be delivered into the business as a change management project. The business case needs to explain how the scope of the proposed PPM project fits within the existing business strategies and develop a compelling case for change, in terms of the existing and future needs of the organisation. The business case then needs to balance the costs, benefits and risks of delivering PPM. It needs details of proposed commercial arrangements; a cost/benefit analysis ideally including analysis of ’soft’ benefits, in other words those that cannot be qualified in financial terms; preferred options and any trade-offs. Also needed is an assessment of affordability and available funding linked both to proposed expenditure and to available budget and existing commitments.

The business case also needs to address ‘acheivabilit’. It needs to set out the actions which will be undertaken to support the achievement of intended outcomes, including procurement activity such as the purchase of consultancy and software. This is supported with a plan for achieving the desired outcome, identifying the key milestones, dependencies, roles, contingencies, risks, skills and experience required.

Therefore the typical business case will take the following form:

• strategic objectives and scope
• benefits realisation
• resources required
• cultural impact
• revenue/savings
• capital and operating costs
• timescales
• appraisal

The development of any business case needs to address the following key issues and calculate their potential ROI and benefits:

• People, process improvement and productivity
• Profitability
• Performance
• Customer/partner satisfaction
• Management information

Vendor Selection Process

With the initial RFI under way, a detailed list of requirements can be built up, supported by the business case and ROI model. Although meeting all the main requirements is important, it should not be the deciding factor in vendor selection. Some vendors will be able to do everything, but superiority in implementation times, costs, software functionality and process restrictions may outweigh the value of some of the other requirements. Often a detailed requirements capture is designed to understand everything available but is then mistakenly used as a bible to which all vendors should adhere. This mistake may cause software featureand process bloat, meaning that gainig actual value will be difficult and the implementation will fail. Look at the key areas of the ROI, assess which parts of the software solution and business process add most value in relation to each vendor, then a best fit across all the variables can be found. The most balanced vendor for your business needs will rarely be the one with all the bells and whistles.

Key areas to address when reviewing a vendor as part of a RFI are:

• methodology support
• process enforcement
• whether an evaluation budget is required
• whether the software is functionally supported
• integration (financials, billing, HR, and so on)
• the vendor’s experience in the sector (IT, PSA, engineering, construction, and so on)
• the vendor’s core values, parent company, and so on
• the business case for the solution in general and for each vendor
• ROI and ROO projections for each vendor
• feature functionality: whether the vendor promotes ‘bells and whistles’ or demonstrates core strengths that will add long term value to the business
• strategy: how the vendor sees the future of their technology, and business process enforcement methodologies
• where the vendor’s solution comes from, how much time they have spent on it, and so on
• how the vendor’s customers are supported at every stage of a partnership
• culture: whether the vendor is customer focused, part of a sales organisation, part of a PLC
• whether the vendor can provide customer references relevant to your business
• track record: where the vendor’s strengths lie. their history of successful installations
• market position: whether they are market leaders, have an extensive product-set, whether PPM is a core part of their business
• partnership strategy: whether they treat the customer as a sale or more of a development partner working towards a best-of-breed solution
• focus and vision: where the vendor’s focus lies in relation to their products and their future
• value added after implementation: whether they will leave, or work with you to continuously improve and develop the solution for the business