In our last installment of the project management guide, Laying the Foundations, we looked at putting together the project management team. The most important task for this group now is to expand on the project mandate or idea that has started this whole process. They need to make the business case for the project.

So what is the business case? It explains the purpose of the project, the aim that it has, and importantly, why the project is a good thing for the organisation to do. Let’s look at an example.

Wally’s Widgets is a firm on the up. It is currently based in a single floor office above a store in a suburb. However, things are getting a bit cramped. The firm has recently taken on a few new staff, and it’s getting hard to fit everyone in. In addition, their landlord has recently put up the rent for the space. So Wally’s Widgets has decided to move to a better location.

The project management team have come together to write the business case for the relocation project. Now, some of this is simple to write. What the business wants to get out of this project is obvious – more space, and hopefully paying less rent. But we need to drill down to show why the business wants these things. Firstly, the business wants more space to provide a better working environment for staff, and to provide the possibility of future expansion. Secondly, the business wants to reduce rent as this has a direct impact on the bottom line!

It is important to realise that these reasons need to be put down, because the business case should be revisited often throughout the project. This is because it is important to continue to check that the project is still relevant. For example, Wally’s Widgets could hit a bad patch, and have to lay off some staff. Then the need for extra space is lost.

The need for a strong business case for a project is particularly acute in times of economic stress. As you can see in “Recession may put short-term IT projects on hold” and “Surviving IT Project Management Complexity”, the business case becomes vital for deciding which projects survive, and which projects can be cut. You must always make sure your business case is as strong as possible – and, if the situation changes around you, examine it with an open mind to see if the project should be stopped.

(Image courtesy of Jacob Bøtter. Some rights reserved.)