A business justification is an important tool for project managers. It helps them to identify the needs of stakeholders and determine the best way to meet those needs. It also helps to secure resources for the project and align it with organizational goals and objectives.
However, the process can be time consuming and may limit the perspective of the team. Therefore, it is important to include a review of the business justification at regular intervals.
Costs
Cost justification is the process of identifying and documenting the costs and benefits of a project. This information is used to determine if the project is financially viable and should proceed. It also helps to identify potential risks and contingencies and outline a plan for mitigating them.
For example, a company may need to implement a new CRM system. The business justification would include a description of the problem, the proposed solution, projected benefits, and the recommended course of action.
A well-written business justification can help a project gain support from senior management and other stakeholders. It can also assist in securing resources, including funding and personnel.
Benefits
The benefits section of a business justification outlines the projected benefits that the project will provide. This is one of the most important aspects of a business justification, because it allows companies to compare the benefits of the project against its costs and risks. It also helps organizations to determine if the project is aligned with their organizational goals and objectives.
A continued business case is vital for longer projects, as events may change the original benefits of the project. This is why one of PRINCE2’s seven principles states that every project should have a continued business justification from the start to the end of its lifecycle.
Risks
A business justification is a crucial document for starting any project. It outlines the project’s scope, objectives, deliverables, and key stakeholders. It also includes an assessment of risks and benefits. It is a critical component of the project plan and is used to create a project charter.
Businesses face many risks that can negatively affect their bottom line. These risks can include a loss of revenue, reputation damage, and negative reviews online.
A business justification should include the submitting organisation’s contact details, including email and telephone numbers. It should also list the comments made by the RA, RMG and SEG(s) or SubSEG(s). This will help avoid delays in the process.
Contingencies
Business justifications are often based on limited perspectives and possible biases. They can also lack a clear course of action to address unforeseen challenges or take advantage of new opportunities.
A contingency plan specifies foreseeable negative events that could impact a project, such as natural disasters, terrorist attacks, fraud, or a pandemic. It should include employee responsibilities, restoration and communications processes, and a financial strategy to mitigate risks. It should also include a budget for unforeseen events that are not reflected in cost estimates. This is why continued business justification is one of PRINCE2’s seven principles. It demonstrates that the project is worth continuing and that it will deliver its desired results.
Time
A business justification is a document that provides a detailed and persuasive argument for why a project should be undertaken. It should include the project scope, objectives, deliverables and key stakeholders as well as potential risks and contingencies. It should also be updated at regular intervals throughout the project to reflect changes in project status.
Depending on the purpose of the business justification, it may vary in length. If it is for internal use and the need to solve a problem is obvious, it may be short. If it is for a public audience, it should be more extensive and include research and charts.
