Business justification

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Business justification
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Business justification or so called business case prepared for the project is one of the foundations for its implementation. It allows to assess the desirability, reasonableness and purposefulness of future activities and to assess the probability of success of implementation in the short and long-term perspective. The business case of the project is also a document allowing the entities and institutions supervising the project (stakeholders) to take and justify decisions having an impact on the course of the project. This is one of the essential parts of the basic document initiating the project: Project Charter. To a minimum extent, business justification defines the expected results of the project and gives direction to the project team

Contents of business justification

The business justification (justification of project) is created, updated and controlled throughout the entire project. It incorporates main and far-reaching goals of the project and is also a reference point for project control at the milestone level. Main principle of successful project management says that it must have a valid and validated business justification. This means that there is a rational reason for starting it from the beginning of the project and it is subject to verification during the project lifetime. In the event of loss of business justification, the project should be closed as soon as possible. The continuity of business justification is intended to ensure that the limited resources of the organization will be used only for projects that bring benefits in line with the organization's strategic goals.

The business justification should specify why the idea should be implemented as a project, and how to focus on the general purposes of the organization. It is the driving force behind the project and its formal basis. The business case (business justification) at the stage of execution of the project is taken into account in the periodic analysis and control meetings between the project manager and the Steering Committee. This serves to analyse progress and expenses and confirm the sense of project continuation. Contents of the project's business justification document

Elements of business justification

Regardless of the approach to justification, it should be created at the very beginning of the project and constantly updated. The minimum scope of the project's business justification is:

  • executive summary,
  • a description of the need or opportunity,
  • description of alternative options of achieving the benefits
  • detailed analysis of the expected benefits,
  • analysis of the expected permanent or periodic side effects of the project,
  • implementation schedule combined with costs and benefits arising in the project,
  • cost estimate
  • assessment of economic efficiency,
  • identification of the risk possible to occur in the project.