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Elements of Portfolio Management: Developing the Compelling Business Case

by Kathy Martucci, PMP:

Note: This is part 2 in a series on portfolio management. Part 1 is Projects Projects Everywhere: A Portfolio Management Approach.

Part of any Portfolio Management process is the decision rendered from the Portfolio Management Committee (PMC) as to which projects will be initiated with the promise of adequate resources to ensure success. The PMC will determine the portfolio upon careful consideration of the business case.

Regardless of who is technically responsible for writing the business case, you and I both know the functional manager will request that you, the potential project manager for the project, write it.  No doubt it will undergo significant scrutiny and even crazy-making wordsmithing; but you can outdo yourself if you follow a few basic rules.

Even if the Portfolio Management Committee has a template for the business case, ensure that you consider and communicate:

Alignment with Corporate Vision, Mission and Core Competencies
If you don’t know or don’t fully understand the organization’s strategies and values, find a mentor who can impart that knowledge with a sense of both the big picture and some of the details that will resonate with the executives who staff the Portfolio Management Committee.  This is not “BS”; rather, it is (or should be) an objective look at the proposed project and gaining a thorough understanding how it will contribute to the company’s bottom-line.

The Project’s Relative Position Within the Mix of Proposed Projects
Understand the business drivers behind your proposal and behind the other proposals competing for corporate resources.  State the objectives of the project succinctly, no double-talk, in a manner that facilitates decision-making.

Viable Alternatives and One Recommendation
There are at least two alternatives – 1) do what you (and the functional manager) want to do, the way you want to do it; and 2) do nothing.  Don’t stop there; be objective.  Inquire. Explore.  Poll your solutions team and the concerned business area for ideas; you’ll be pleasantly surprised at what surfaces.  When you decide which alternatives and which recommendation to put forward, explain why certain routes were not chosen. Have costs and benefits of the throw-aways in your back pocket for discussion purposes.

Costs and Benefits
This is a tough assignment so early in the project life cycle. First, investigate costs from former projects; but use the information wisely.  Second, resist the temptation to sweeten the benefits unrealistically just because you really, really want to do this project. Use intangible benefit statements (e.g., improve morale) sparingly unless there is a uniquely compelling reason to include returns that cannot be measured. Mostly, be conservative and honest in all your assessments.

It’s not difficult to brainstorm and document all the uncertainties that can plague the project. But don’t forget the OTHER risks – the opportunities. Going through this exercise can also assist in identifying costs and contingencies necessary for the project. Identify and categorize all the negative and positive risks associated with the project and present them in a clear, concise manner.

A well-written business case alone will not guarantee that the project will pass the gates set up by the Committee. However, a business case that misses the mark WILL guarantee that it doesn’t.

What is in your business case?

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