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Defining Project Rationale

Defining Project Rationale

Author: Jeff Carroll

Identify tangible or intangible benefits to a project.

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Source: Image of project manager female, Creative Commons, Kelly Eddington; Image of tablet, goal arrow, ruler, tangible arrow, intangible arrow, stickman, cloud, Public Domain, Sparkol VideoScribe Internal Image; Image of watch, Public Domain,

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Hi, I'm Jeff. And in this lesson, we'll discuss how to define the rationale for a project. We'll discuss what a business case is, and how to determine the goals and benefits for a project. So let's get started.

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 is often done through a business case. A business case is a short set of statements, usually five sentences or less, that describe why an organization needs a project.

For example, imagine you're part of an organization that creates tablet computers. There's already great value in this business. But there is one issue of tablets, or even phones-- you always remove them from a pocket or purse before use. What would be a product that avoids this? And what would the business case be for such a project?

Let's say our organization decides to develop a wearable watch with similar functions to a tablet. Our business case should outline the organizations need using one or more of the following. The reason the project is initiated. In our example, it's the desire for the organization to expand its market.

The opportunity or problem that the project is targeting. Giving customers the same functionality as a tablet, but making it wearable so it doesn't need stored away. The value the project has for the organization. This wearable product can integrate with existing tablets and help ensure customer loyalty.

So what would a business case look like for our example project? Perhaps, like this. Note how it outlines each of the areas that we just discussed. It describes the reason for the project. The problem the project addresses. And the value the project gives the organization.

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. And benefits come in two forms; tangible and intangible. Tangible benefits can be measured. They'll often be defined in a numeric or statistical manner. In our sample project, a tangible benefit would be a customer base increase of two million users.

Intangible benefits cannot be quantified. There are ways in which an organization benefits in general more abstract ways. For example, in the business case we stated that customer loyalty for existing products would be increased if the new watch integrated with the tablet software. Customer loyalty can be an intangible benefit since it's difficult to measure as a direct relationship.

However, 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. For example, stating the watch in our project would also increase sales of the company's tablet line is a weaker description then saying over 200,000 customers in the next year will purchase a tablet and a watch in the same order.

One point to remember about benefits, they'll often extend beyond the lifetime of a project. But goals, which we'll discuss next, must be achievable within the time frame of the project. Project goals, often known as objectives, describe the outcomes expected from a project. When a project is complete, all goal should also be complete.

The business case is used to develop the goals. And the goal should always serve the rationale described in the business case. And since the progress on goals must be tracked, it's important too that goals are outcome or performance based. That means that methods must be available to test goals.

For example, a goal for our watch project might be a primary objective is 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. 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. So that's how you define the rationale for a project.

Good job. Let's go over what we learned. We discussed business cases and how they're created. What project benefits are. And how they differ from project goals. Thanks for your time.

Terms to Know
Business Case

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

Project Benefits

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