A tragedy is in the making
Many projects are begun with just a few loosely defined goals. The sponsor, as the most significant stakeholder on a project, authorises those projects and then relaxes, assuming their work is done. The project managers are then left to complete the project without any further feedback from the sponsor. This is a tragedy waiting to happen.
Justification in terms of business
A basic concept of project management is that a project’s commercial rationale must be maintained. This implies that the sponsor must be involved from the start in determining the project’s objectives. This entails being crystal clear on the business problem(s) at hand, as well as the business opportunity that has presented itself.
The main is the business case
The Business Case is the most critical piece of project documentation. This paper explains why the project is being undertaken and what results can be anticipated as a result of it. It should provide an investment assessment that compares the costs and risks to the anticipated benefits.
Benefits may be realised with the aid of deliverables
On every project, one or more deliverables will be produced, which will be used by the organisation in its daily operations. It will be able to realise the desired benefits by using these deliverables. For example, an information technology system might be implemented because it is intended to improve staff productivity. These efficiencies can, in essence, assist in the realisation of benefits that can be calculated in terms of cost savings. As a result, the Business Case must balance these costs and uncertainties against the anticipated benefits. The project should never be undertaken if the costs and risks outweigh the benefits.
Analysis of the Business Case
So, while a project should be initiated if it has a strong Business Case, it can also be stopped if conditions change and the project is no longer a good investment. Assume that the costs of the new IT system rise to the point that the costs and risk of proceeding with the project outweigh the anticipated benefits. In this situation, the project should be halted, even though it means writing off the previous investment.
Include the sponsor in the process
So, how can one be sure that the decision to close the project early is the right one? The solution is to regularly involve the project sponsor so that they can study the latest Business Case and make effective decisions. As a result, the project manager must regularly update the Business Case and submit the new version to the sponsor for approval.