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TOPIC 2

PROJECT INITIATION (PART 2)

Project Management
FMT Hanu
 Course structure
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• Project, project management: introduction

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• Project initiation: boundary and context definition, stakeholder

2 awareness, building the business case

• Project planning: project objectives, project deliverables, work

3 break down structure (WBS), scheduling, cost/ resource planning

• Project organisation: project organization chart, project

4 communication structure, project roles

• Overview: project controlling, project close down

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 Lecture outline
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Building the business case:

 Issue or problem

 Goals and benefits

 Objectives

 Needs and wants

 Project scope

 Risks and impacts

 Cost benefit analysis

 Return on investment
 Reading
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 Chapter 3 (p. 29-46)

 Terms to understand
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 Business case
 Goals and objectives
 Project scope
 Cost benefit analysis
 Return on investment analysis
 Concept is the start of every project
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 Do or don’t?
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 The concept stage is to decide whether or not to

do the project!
 How to decide whether to go ahead with a project?
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 The Business Case:

• captures the reasoning for starting a project
(should support a business need)
• justifies investment in the project
• can be developed by the project manager, OR
sponsors and stakeholders themselves (people
who came up with the idea for this project)
 What is in a business case?
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• Issue or problem we need to address/ solve

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• Goals and benefits of doing this project

3
• Objectives

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• Needs and wants

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• Project scope

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• Risks and impacts

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• Cost benefit analysis

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• Return on investment
 Issues or Problem
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 The project manager needs to understand the

problem or the issue very clearly
 Talk to the major stakeholders and the person who
has the idea for this project
 Talk to lower level employees if possible
 Goals and Benefits
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 Goal: What is the end result?

How will this benefit the organization/ your
department/ you?
 Involve the major stakeholders in this session.
 Objectives
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 Shorter term than goals

 Specific tactics to achieve the above set goals and
achieve the end result
 Needs and wants
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 Needs: must have

 Wants: nice to have

 Eg: In this classroom, there has to be at least tables

and chairs, and a board to write on, which serve

the basic functions of a classroom. Projectors,
clocks, air conditioners are nice to have.
 Needs and wants both cost money. Minimum
costs (all needs) and maximum costs (all wants
plus all needs) must be added up
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 Preliminary Project Scope
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 WHAT and WHO is included in the project?

 Preliminary Project Scope
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 WHAT and WHO is included in the project?

Business•
Business areas
perspec• External entities
tive

Project
• Totality of work to
perspec be done (WBS)
tive
 Risk & impact
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1 2
Risk analysis must
be done to identify Evaluate the
potential business, impacts of the
technical, societal, legal, project to
market risks that could organization
impact the project
 Risk/Impact Analysis Grid
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 Cost benefit analysis
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 It seems a bit early to conduct a cost benefit

analysis in the Concept stage, but it is useful to get
a real picture of the costs.
 How to identify costs?
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Needs
Similar and
projects Wants
costs

COSTS
 Return on investment analysis
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 Efficiency of the investment

(eg: how long is the payback period?)
 Better calculated by the sponsor and stakeholders.
 Strategic Alignment
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 Terms to understand
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 Business case: written documents or verbal presentation of

the reasoning for starting a project
 Goals: long-term, directional, end result
 Objectives: short-term, specific action plan
 Project scope: who and what is included in the project
 Cost benefit analysis: an evaluation of the strengths and
weaknesses of a project in term of benefits and savings
 Risk/Impact
 Needs and wants
 Return on investment analysis
 Group exercise
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 Vignette 3 – Why Go to the Trouble of Developing

a Business Case? (p.47)
1. Why is developing a business case important?
2. What are some characteristics of a weak business
case?
3. Is having a business case a must for every
project?
4. Why may a business run a project without a
business case?