Project Launch Process L020

Review / Confirm Business Needs and Anticipated Benefits

DEFINITION

An initial statement is prepared and agreed to show what business needs and benefits are expected.  This allows the project to keep a focus on achieving those benefits and provides an initial yardstick against which changes can be measured.

SUMMARY

The scope of the project must be based on a firm understanding of the needs which are to be addressed.  Prior to commencement of the project there must be some definition of the anticipated benefits which are sought and what level of costs, timescales and risks are assumed in justifying the work.  Although these considerations are examined in more detail during the project, it is important that there is a common initial understanding before any substantial work is performed.

This process ensures that there is an appropriate definition of the business needs and anticipated benefits.  It will be used throughout the project as a guide to direction and as a measure of success.  The model may be developed further and modified during the project to reflect better information, revised ideas or changes to the project

PATH PLANNING GUIDANCE

This process is optional.  It is not required where there is an existing, documented understanding of the basic business needs and anticipated benefits, which the client organisation has certified as correct.

DEPENDENCIES

Prerequisites (Finish-Finish):

• Review / confirm Terms of Reference (ToR), Scope, Objectives (L010)

Dependent procedures (Finish-Finish):

• Following segment processes

RECEIVABLES

• Project Constitution - Terms of Reference / Scope / Objectives etc
• Any existing Feasibility Study, Benefit Model or Cost/Benefit Analysis etc

DELIVERABLES

• Definition of business needs and anticipated benefits (BNAB)

TOOLS

• Benefit Realisation Core Guide

DETAILED DESCRIPTION OF TASKS

The initial definition of business needs and anticipated benefits should be identified and agreed.  They will be used to form a guide for the conduct of the entire project.  It is important that such things are clearly defined and generally understood before the project team sets about addressing those business needs and achieving the desired benefits.

The information may be drawn from a number of sources.  Existing documentation may be examined where appropriate, for example:

• deliverables from earlier work (if any)
• business case for the project
• feasibility study report
• IT Strategy
• correspondence relating to the business needs and anticipated benefits
• overview documentation relating to current systems
• request for proposal / proposal / contract relating to consultancy assistance or vendor contract (if any).

This should be supplemented by direct interviews or workshops with the project’s sponsor and any other key managers within the client organisation.  These should attempt to identify:

•  why they are undertaking this project in this way at this time
• what are the true business needs
• what do they hope will be the result of the project, in terms of

          -     effects on the organisation and the way it functions
          -     changes to the business processes
          -     changes to the computer systems and infrastructure

• in what way do these changes lead to greater benefits for the organisation.

The benefits identified may be either of a tangible, quantifiable nature in financial terms or of an intangible, unquantifiable nature.  At this time all benefits should be identified and discussed regardless of their nature. 

It may be possible to construct a cost/benefit analysis to demonstrate that there is a financial business case for the project.  It should be clear, however, that this is based on initial assumptions and estimates. The results should be consolidated to form a definition of the business needs and a qualitative statement of the anticipated benefits.  This should be reviewed and agreed by the project’s sponsor to ensure that it is a fair and accurate statement of the organisation’s expectations of the project.

Benefit Model

The project can be guided and managed more effectively if focus is maintained on the anticipated benefits.  This can be achieved by building a benefit model.  A benefit model attempts to measure the anticipated or actual benefits regardless of whether they are financial in nature.  The concept is to assess all aspects of the project against the desired benefits in a balanced way.  Balance means that all forms of benefit are given appropriate weight.

The model will be used throughout the project as a guide to direction and a measure of success.  It may, however, be developed further and modified during the project to reflect better information, revised ideas or  changes to the project.

For each of the forms of benefit identified, a performance measurement metric should be proposed that would show trends and variances.  The calculation does not have to produce a financial result, nor even a mathematically meaningful figure.  It will be used during the project primarily as a test of whether benefit is being achieved above or below the expectation and whether changes produce increased benefit.

The metrics must be such that they can be measured or estimated without undue effort during the project.  The metrics are normally presented as a series of trend charts shown on a single page to give a simple but powerful control panel for the project’s success.

The model should be discussed and finalised with the project’s sponsor and any other key managers within the client organisation.  It is important that they accept that it correctly reflects the balance of benefits that the project is intended to achieve.

The Benefit Model can be documented and included in the Definition of Business Needs and Anticipated Benefits (BNAB).  The overall report should be reviewed and formally agreed by the project sponsor.