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