The following are project artifacts necessary to initiate a project:
- Project Charter
- Project Statement of Work (SOW)
- High-Level Business Case
- Enterprise Environmental Factors
- Organizational Process Assets
Business Case
Business cases help justify what projects will create. A Business Case is an artifact that is typically created for decision making to approve or continue with a project. Thus, project requests are not considered projects until they are approved through a prioritization approval process supported by business cases. As a result, prior to project initiation, high-level business cases are created for project requests, which are assessed and hopefully approved to initiate projects. A project manager needs to ensure that a high-level business case exists when initiating a project; if not, one should be developed.
A business case is an encapsulation of project scope statements and other quantitative and qualitative requirements. There are plenty of free business case templates available on the internet, but one is made available to you at the end of this chapter. When initiating a project, business cases need to fully convey the requirements for a project and include commitments and signoffs from relevant stakeholders.
Initial business case information is usually generated by a project requestor and later leveraged to create a Project Charter discussed later in this chapter. A Business Case is a predecessor to initiate an approved project request.
Here are a few generic steps for a business case prior to initiating a project:
Part 1 – Business Definition to Seek Approval for Scoping work (prior to project initiation). Requestors gather initial information (business definition) to secure ‘seed’ money from a Project Management Office (PMO) or Governance Board to scope project requests. Project request information should detail the benefits of executing a project and its strategic direction, among other key details mentioned earlier.
It is necessary for requestors to provide sufficient level of detail describing the business need, aligning project requests to strategic goals, thus creating a high-level business case (reasons to do a project). At the end of this process, seed funding may be granted to start scoping a project request. It is important to know that there are organizations which set aside a ‘bucket’ of funds to scope project requests to complete high-level business cases. It is also important to know that this step may take about a month or more to complete, which typically contains deadlines detailed in an annual project prioritization process.
Part 2 – Scoping Work to Seek Approval to Initiate a Project. Once the business definition to scope a project request is approved (Part 1 above), scoping work should begin since requestors now hold the ‘seeds’ (money) to scope the work. Note that certain Project Requests do not require ‘seeds’ to scope the request.
Part 2 is used to gather more information about a prospect project to obtain approval to initiate a project (Project Initiation). These details are still high-level estimates of cost, time, and scope but will serve to calculate project risk and high-level financial calculations, such as the net present value (NPV), return on investment (ROI), and payback period of project requests. It is important to know that organizations may combine Parts 1 and 2 in their annual project prioritization process.
Part 2 can also be used to request/secure approval of estimated funds for resources and labor involved during the initiating and planning phases of a project – assuming a Project Request is approved – because the next review will be done in Part 3, which is at the end of a Planning phase. At the end of a planning phase, more accurate estimates of cost, scope and schedule are obtained at which time a project is baselined to start implementation, and Part 3 review (discussed later) ‘kicks in.’ Product or service vendors may be engaged here to provide estimates; however, vendors are not fully engaged in this initial phase but should provide free estimates of work for later bidding. Once a high-level business case and project request are approved, a project manager initiates and kicks off a project. A Project Charter is typically created once this process is done.
Part 3 – Final Approval to Start Development (execution). Once project initiation and planning phases have started, a project can be baselined because more accurate estimates of cost, time, and scope should have been obtained. Thus, Part 3 can be used to finalize project approval through closure once all the financials have been validated, and the project has been baselined. There will be a go/no-go decision here. A PMO or Governance Board should have enough information to determine whether projects should be stopped or funded, from the Executing through Closing phases.
Note: It is important to know that various checkpoints may occur after a project is initiated. For example, a checkpoint may be in place at the end of the initiating phase of a project. Another checkpoint may be in place at the end of a planning phase of a project, giving decision makers a chance to continue with or stop relevant projects.
Excerpts from:
How to Initiate a Project and More, Dowdell, 2017