Business Case and Quantitative Benefits

Should a business case be formal, justifiable, and in Dollar value/financial figures?
why do some organizations initiate projects without objective business cases?

Portfolio management and strategic planning are methods that lend the importance of a specific project business case towards the overall benefit of the portfolio or the programme of projects. In this aspect, a project with an ‘unjustified’ business case especially from the financial perspective can be accepted and implemented because it enables the realization of higher level organizational benefits.

This approach leads to less emphasis on formal business case development or using preset weighting systems for each project based on financial and objective criteria. Instead of objectively considering the dollar value and the grabbed opportunities (pros) along with the ‘opportunity cost’ of taking this project (cons), then making a conscious decision; I see that this approach would open a window for subjective decisions and executive powers to be the basis of decisions made to promote or exclude certain projects.

In some cases, the business case can be as big as a project by itself. It is sound practice to do so according to project size, complexity, etc. and of equal importance, when the project is to be managed in a stable surrounding. However, I believe that the importance of having a highly detailed business case in some competitive or rapidly changing environments can decrease significantly. This is due to having more qualitative factors that make it a challenge to have them ‘weighted’ quantitatively; and circumstances upon which a business case is based would change rapidly.
Agility, multi-phasing, decision gate review, flexible objectives and less formal business cases can be options to look at in this case.

In fact, this topic would promote the importance of establishing a PMO that should balance the formality and importance of business cases and ensure that only the right projects are accepted and pipelined. Furthermore, a key responsibility of PMO is to include the effect of ‘time’ and the rapidly changing environment and promote, terminate, or realign projects accordingly in order to stay in phase with the organizational strategic objectives. These strategic objectives would in-turn be changing!

Regards,
Samer