The business case should be prepared before major resources are committed to a project. It outlines the costs and benefits of a project and should be revisited at each stage to ensure the project is on track. The project manager should ideally contribute to developing the business case and monitor it throughout the project to ensure the benefits are achieved. Cost/benefit analysis identifies and quantifies costs and benefits to determine if benefits outweigh costs. Tangible costs and benefits can be quantified while intangible ones are more subjective and difficult to assign monetary values to. Benefits realization is the process of managing a project and subsequent operations to maximize the chances of achieving the benefits outlined in the business case.
The business case should be prepared before major resources are committed to a project. It outlines the costs and benefits of a project and should be revisited at each stage to ensure the project is on track. The project manager should ideally contribute to developing the business case and monitor it throughout the project to ensure the benefits are achieved. Cost/benefit analysis identifies and quantifies costs and benefits to determine if benefits outweigh costs. Tangible costs and benefits can be quantified while intangible ones are more subjective and difficult to assign monetary values to. Benefits realization is the process of managing a project and subsequent operations to maximize the chances of achieving the benefits outlined in the business case.
The business case should be prepared before major resources are committed to a project. It outlines the costs and benefits of a project and should be revisited at each stage to ensure the project is on track. The project manager should ideally contribute to developing the business case and monitor it throughout the project to ensure the benefits are achieved. Cost/benefit analysis identifies and quantifies costs and benefits to determine if benefits outweigh costs. Tangible costs and benefits can be quantified while intangible ones are more subjective and difficult to assign monetary values to. Benefits realization is the process of managing a project and subsequent operations to maximize the chances of achieving the benefits outlined in the business case.
The business case should be prepared before major resources are committed to a project. It outlines the costs and benefits of a project and should be revisited at each stage to ensure the project is on track. The project manager should ideally contribute to developing the business case and monitor it throughout the project to ensure the benefits are achieved. Cost/benefit analysis identifies and quantifies costs and benefits to determine if benefits outweigh costs. Tangible costs and benefits can be quantified while intangible ones are more subjective and difficult to assign monetary values to. Benefits realization is the process of managing a project and subsequent operations to maximize the chances of achieving the benefits outlined in the business case.
Q1 At what point in the project lifecycle should the business case be
prepared? The short answer to this is before any serious work has been done and before major resources are committed to the project. Many projects are preceded by a feasibility study, the aim of which is to see whether there is a prima facie case for undertaking the project and a business case is often a major output from such a study.
In addition, IS studies often start with some form of requirements
analysis and specification. Where this is the case, the detailed information discovered here may necessitate a reappraisal of the business case, to make sure that the costs and benefits identified in the feasibility study are still realistic.
In fact, the business case should be revisited at each stage of a project,
to make sure that the project is still on target to achieve the business benefits for which the project has been initiated. Q2 What should be the role of the project manager in relation to the business case? Ideally, the project manager should be appointed early enough to contribute to the development of the business case or even to take the lead in its development. At the very least, someone with a project management background should be asked to review the business case to make sure that the approach proposed is realistic.
If the project manager has not contributed to the creation of the
business case, then one of his or her first jobs after appointment should be examine it and to satisfy themselves that they are happy to take responsibility for the project. If they think that the scope, budget or timescale is unfeasible, they should raise their objections with the project sponsor and endeavour to negotiate a more realistic programme. Once the project is underway, the project manager needs to keep a watchful eye on the business case to make sure that the way the project is going is not going to compromise the achievement of the benefits outlined in the business case. Q3 Explain the term cost/benefit analysis Cost/benefit analysis is the process of identifying, and as far as possible quantifying, the costs of undertaking a project and contrasting these with the benefits expected to flow from it. For a project to be approved, senior managers will have to be convinced that the benefits outweigh the costs. Q4 What do you understand by the terms tangible and intangible when applied to costs and benefits? Tangible costs or benefits are those for which a plausible quantitative value can be calculated, such as increased profits or reduced staff costs. Intangible costs or benefits are those where it is not practical to calculate a quantitative value.
In theory, almost anything can be quantified, given enough time and
the right resources to do the analysis. For example, improved public image could be measured through opinion polls or surveys and could even, perhaps, be linked directly to sales figures. However, in most cases, the expert resources are not available to do the research and, in any case, the results are often debatable and sometimes not believed by the decision makers. It is generally better, therefore, when dealing with intangible costs and benefits to explain in the business case what they are and to let the decision makers put their own (subjective) value on what they might be worth. Q5 What is meant by the term benefits realisation and why is it important? Benefits realisation is the process of managing a project and the post-project operation of, for example, a new information system so as to maximise the chances of getting the benefits claimed in the business case. All projects should be followed, after a suitable interval, by a post-project review, the main aim of which should be to find out whether the expected benefits have been realised or not.