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4 Tutorials that teach Defining Project Rationale
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Defining Project Rationale

Defining Project Rationale

Description:

This lesson introduces the process for determining the business case and goals of the project.

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Tutorial

What's Covered

For all stakeholders and team members, it's important to document why a project is needed, and what purpose the project will serve in the larger structure of an organization. This tutorial will cover:

  1. Business Case
  2. Benefits

1. BUSINESS CASE

Documentation that provides why a project is needed and the purpose the project will serve is often done through a business case. In order to create a business case, a short set of statements, usually five sentences or less, must describe why an organization needs a project.

Term to Know

    • Business Case
    • The high-level rationale for initiating a project, describing the specific need that the project will satisfy.

The business case is used to develop the goals. And the goal should always serve the rationale described in the business case. Goals must be achievable within the time frame of the project. Project goals, often known as objectives, describe the outcomes expected from a project by the time the project is complete. And since the progress on goals must be tracked, it is important that goals are outcome or performance based. That means that methods must be available to test goals.

IN CONTEXT

Imagine you're part of an organization that creates tablet computers. There's already great value in this business. However, there is one issue: users always need to remove your tablet from a pocket or purse before use.

Is there a possible product that can be more easily visible at all times? What would the business case be for such a project?

Let's say your organization decides to develop a wearable watch with similar functions to a tablet. What would a business case look like for your example project?

Perhaps, like this:

This project addresses the problem with all tablets and phones – their inability to be visible at all times. We will develop a watch that includes the commonly used functionality of a tablet and phone. This will expand our organization into new markets. The watch will integrate with our tablet’s software, which will encourage customers to remain loyal to our existing products.

Note how it outlines each of the areas discussed earlier. It describes the reason for the project, the problem the project addresses, and the value the project gives the organization.
Your business case should outline the organization’s need using one or more of the following:

1. The reason the project is initiated. In your case, it's the desire for the organization to expand its market may be the purpose.

2. The opportunity or problem that the project is targeting. For example, giving customers the same functionality as a tablet, but making it wearable so it doesn’t need to be stored away.

3. Value the project has for the organization. This wearable product can integrate with existing tablets and help ensure customer loyalty.

While high -level benefits are summarized in the business case, it's important for project management to document in detail how a project will benefit an organization. Once a project manager has documented the business case, benefits, and goals for a project, stakeholders should have a clear vision of what the project will accomplish.


2. BENEFITS

Project benefits come in two forms; tangible and intangible. Whereas goals must be attained within the timeframe of the project, benefits often extend beyond the lifetime of a project.

Tangible benefits can be measured. They'll often be defined in a numeric or statistical manner.

ExampleA tangible benefit could be increasing a customer base to two million users.

Intangible benefits cannot be quantified. There are ways in which an organization benefits in more abstract ways.

Example Loyalty would be an intangible benefit since it's difficult to measure.

Many organizations will work to quantify intangible benefits because tangible benefits can be tracked to gauge a project success.

On the other hand, making a tangible benefit into a general intangible benefit description weakens its effectiveness.

ExampleStating that a new product would also “increase sales of the company's tablet line” is a weaker description than stating, “over 200,000 customers in the next year will purchase a tablet and a watch.” That is a strong project deliverable.


Terms to Know

    • Project Deliverables
    • Defined outcomes that are the focus of a project and are the basis for all project activities.
    • Project Benefits
    • The benefits that an organization will enjoy as a result of a project achieving the project deliverables.


What could be a goal for the development of a new tablet watch? Remember that it must serve the rationale described in the business case and it must be testable.

Perhaps a primary objective may be that the user of the watch should know immediately when new email is available, and be able to view the new email in less than five seconds. This is just one idea. Can you think of one more?

Summary

So now you know that a business case uses goals as rationale. Goals are to be achieved within the timeframe of a project. Benefits, on the other hand, often extend beyond the project. Tangible and intangible benefits were contrasted as well, noting that tangible benefits are easily measured, and intangible benefits are not.

Good luck!

Source: This work is adapted from Sophia author Jeff Carroll.

TERMS TO KNOW
  • Business Case

    The high-level rationale for initiating a project, describing the specific need that the project will satisfy.

  • Project Deliverables

    Defined outcomes that are the focus of a project and are the basis for all project activities.

  • Project Benefits

    The benefits that an organization will enjoy as a result of a project achieving the project deliverables.