Business Case: Figures or understanding?

It's time for development and improvement of Business Cases in Danish companies. Some are working on the first edition others with version 8 +. The trend is clear: More and more conditions must be assessed and included in the final conclusion and recommendation.

Regardless of the stage of development, it should be remembered that the figures are something else than understanding. It may well be that the numbers look good, but do we really agree on what exactly is going to happen? Why we believe that A leads to B? Why the project delivery should give the promised effect?

The person developing the business case has a number of images (and maybe even dreams) in the brains, and all figures are based on these. How do we ensure that decision makers have the same images? One thing is certain: The numbers do not increase understanding. On the contrary blurs often misunderstandings. The figures are so lovely clear with their conclusions with decimal places - maybe even many - but they take us away from all the potential misunderstandings.

A good business case should have a section of text and one of figures. Text section must focus more closely on and explain exactly why we believe that A leads to B. The figure section should then show whether that is good business.

The higher the worse

Experience from development of project maturity shows quite clearly that as soon as you have come roughly in place with projects it will be the ability to manage the portfolio of projects that are the problem. And when you have gotten portfolio control in place, yes, then it becomes clear that the strategy planning is bad.

You can say it in another way,:the reason that we can not see how bad managements is to operate and manage the portfolio of projects and the company is that the noise of our own lousy project management completely drowns out the problems further up.

It is widely known that it does not help much 'to do projects in the right way' (read: to be good at project management), if it is not 'the right projects' (read: if the projects are selected by the head under the arm).

Benefits are good but Commitments on is better

It is relatively affordable to prepare a business case. It takes longer for it to be of good quality (read: reliable) and a little less time if the quality can be poor (read: too optimistic).

Anyway Business Cases are rarely in play for very long. In many places they are forgotten after the project is approved. Fewer places review it at every gate in the project model. Even fewer sites are updated on an ongoing basis as all get wiser. Finally the very few places make a review long after project completion to follow up on the promised effects.

Anyway it's all not of much use if the benefit's or effects are seen as something only the project must produce - something the project should Push forward. The reality shows that without someone to demand Benefits or effects, there is rarely much chances of success - some must Pull too.

Anyway it does not help that much if those who must demand are not committed.

Therefore, a good business case should have more signatures: 1) the signature of the costs and resources may be used for the agreed deliverables 2) signatures that somebody has put their head on the block that if they get the deliverables they are accountable for the benefit's.

There is money in good project management!

From the news media we are tempted to believe that good project is just about avoiding disasters but the real gains are below the journalists' radar and happens in everyday life and not in the culmination - or as the Olympic gold medalist in rowing Niels Laulund says: "The gold is won in everyday life ". Few companies and managers understand the value of project management. They always talk about to avoid something unpleasant, but rarely to achieve something good about project management. Here we have probably been too bad to sell ourselves, and perhaps that is why we have such a hard time getting managements to invest in the creation of good project management cultures around?

But there is plenty of money in good project - here are just a few sources:

Should we punish Project Managers with fines and imprisonment?

.. to get more quality into the estimates that underlie the business cases that we repeatedly see are not reliable in real life!

The idea pops up when you read Prof. Bent Flyvbjerg article here about all the scandals in public (and probably in total secrecy also business-) capital expenditures. Advisers who calculate business Cases with too low costs and excessive benefits (eg. Number of cars on the Great Belt Bridge, etc.) should not escape as easily as just being fired believes Flyvbjerg. When society in this way is misled we should perhaps punish advisers more harsh considers Flyvbjerg.

Now try this quick thought experiment:

If you now have to pay a fine of 3 times your monthly salary if the estimates on your project are not met, what would you do differently? - And now the killer question: why do you not do it allready today?

Reporting that matters

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Reporting is just a step in a long process called management. The process goes like this:

 1. Execute plans
2. Collect status data (at least 8 points of view should be used)
3. Calculate status
4. Evaluate status
5. Develop proposals for handling deviations and problems
6. Report
7. Meet with decision makers
8. Transform decisions into plans
9. Execute the new plans
10. Go to step 1

What I will write about here is step 4. Let us imagine in step 3 that an activity is delayed, how do you assess such a delay in step 4? The following questions should at least be asked?
1. Is the activity on the critical path or does the delay put it on the critical path? If Yes, then the delay is serious, and we must ask further ...
2. Does the delay have impact on Milestones (who often are synchronization points to and from other projects or sub-projects)? If yes, then it is pretty serious, so we ask on ..
3. Does the delay have impact on the delivery of certain Deliverables? If yes, then we know to be in a serious situation and must ask on ..
4. Does the delayed Deliverables postpone the Purpose of the project ie. will there be a delay in achieving the desired effect? If so, then the delay is probably quite critical. If the effect is measurable, you can probably almost calculate the cost of the delay, and that it is good ammunition to take with you when you have to argue for your solution to the delay.

So what I'm trying to say is that good reporting requires prior brainwork!

Fortryd redigeringer

Alpha

Pick two!!

All bosses are dreaming of this project triangle all night.

It is important that we constantly repeats the rule: PICK TWO!!

1.If it has to be Good and Cheap it will not be Fast!
2.If it has to be Good and Fast it will not be Cheap!
3.If it has to be Fast and Cheap it will propably not be good!

Yes, it seems logical, but be careful out in real life ....

Project -and Purpose-triangles

Project triangle we know but what is a Purpose triangle?

Purpose triangle we find at the project owner's playfield. It is here we put the responsibility for the purpose and the measurable expression of the same - namely the success criteria(s).

The success criteria is an ambition of the purpose, and if they meet the SMART requirements, then they have a time limit attached. The means to achieve the purpose and thus success criteria´s are the deliverables. Together, these three factors makes the purpose triangle.

As with the project triangle any modification of one tip needs an adjust at least one other tip to maintain balance. If in the example a greater reduction than 15% is required at the sammme date, you probably need to enhance the deliverables (possibly the amount of change management). Should the succes criteria be achieved faster it is probably only a more intensive change management process that can do the job.

Purpose triangles in other words is a tool for the change manager as project triangles is for the project manager.