Whatever Happened to the Business Case?
Another omission in current project management practices is a strong business case that provides the rationale for the project and assists in assigning it a priority. PMI distinguishes two types of projects. One type is recurring projects that add value to the organization; they produce worth. Strategic projects make up the other category; these increase the organization's capability to create value. The business case should demonstrate how a project in either category would add value or increase organizational capability to add value. It then provides the guideline for changing the mix of projects in the portfolio as follows:
- Eliminate pet projects, which rarely have a business case, from the portfolio. This is going to be the most difficult step because people are comfortable with pet projects.
- Make the majority of projects in the portfolio strategic projects.
- Leave business unit projects alive only if they feed the strategy, mission and vision of the organization.
- Investigate reactive projects to determine if what they are correcting is creating value that is in alignment with the strategy, mission and vision. Most of them, over 80 percent, will likely fail this test. IT staff spend vast amounts of time on fixing defects while directing little of their time on projects aligned with mission and vision. Get out of the just-do-it mode by adjusting the workload to what is doable and follow a project cycle that has a repeatable, predictable process!
In short, pull the plug on any project that does not have a business case. As an added benefit, this process forces an organization to clarify and communicate its mission, vision and strategy.
Again the data extracted from the PMI Research Conference in Montreal suggests that the ideal portfolio has 75 percent mission-, vision- and strategy-directed projects; about 20 percent business unit improvement projects (still aligned with the mission and vision); and about five percent projects to fix problems. And, every single project, regardless of category, must be supported by a business case - even when senior management pushes its non-value-added pet projects.