project business case risk analysis

2. 2Emmanuel Santa Mwagomba

3. 1.11 What is a business case

A business case document is a formal, written
argument intended to convince a decision maker to
approve some kind of action.
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4. 1.1.2 Identifying a problem
i). Observation
 changes to the business vision, strategy or objectives;
particular business processes or technologies that are not
operating efficiently;
 new competitor products or processes which have been
identified;
opportunities resulting from new technologies introduced to
the market place;
 Operational trends which are driving changes in the
business;
changes to statutory, legislative or other environmental
requirements.
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5. 1.1.2 Identifying a problem
ii). Crisis – This is where you meet a serious problem
which leads to you to initiate a problem
iii). Collecting views through user suggestion boxes
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6. 1.1.3 Describing the business
problem
 a full description of the problem;
the reasons the problem exists;
the elements that create the problem (such as
human, process, and technology factors);
the impact the problem is having on the business
(such as financial, cultural or operational impact);
The timeframe for the project
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7. 1.1.4 Alternative solutions
List all the alternative solutions:
Implementing new computer system
Upgrading computer system
Maintaining the current system
Compare each of the alternative solutions and
recommend a preferred solution for implementation.
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8. 1.1.5 ) Cost-benefit analysis
In large projects you may need to present costs and
benefits in form of a cost-benefit analysis (CBA) or
investment appraisal
The purpose is to show that the:
Problem and proposed solutions
Benefits outweigh the cost
Payback period is acceptable
Project is worth doing
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9. c) Benefits
Benefits may not all fall in the library
Library may need less staff if the electronic loan system
is in place
Users
Will spend less time borrowing books
Will get an improved service
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10. b) Costs
Where are the main areas of cost?
Cost of resources used by the project
Other costs incurred elsewhere – e.g time spent
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11. Costs
In your case you should make allowance for the
unforeseen and include the elements for contingency
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12. Tolerance and Contingency
The amount you allow within your agreed budget for
extra, unforeseen expenses
Tolerance and contingency are related to risk.
The greater the risk, the more likely the project is to
take longer and cost more.
Tolerance of around 10% and contingency of 15% is
usually about right – for projects taking not more
than six months
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13. 1.1.6 Identify Risks
Risks are about:
The project not going to plan
Resources or people not being available when you
need them
Machines not working
The outputs not being of the quality you were
expecting
Think about :
What could go wrong
What the impact might be it did
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14. Why do risks happen in a project
This happens because of:
 Unchecked assumptions
 Lack of realistic planning
 Poor organization
 Starting a project that is new or complex
 Dependence on resources or factors outside your
control
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15. Impact of Risks
The impact is proportional to the importance of the
project to your main business
If the online loans system fails: then will you be able to
serve your clients
Do you have a manual system in place? If not then you
are in trouble.
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16. 1.1.7 List assumptions for project
Types of assumptions
Conscious
Unconscious
Reality proves our unconscious assumption wrong
Avoid making unconscious assumptions
Get into a habit of checking
Have regular meetings with minutes
Be realistic
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17. What assumptions Are You
making?
Conscious assumptions (examples)
Inflation (exchange rate)
Same, 10% higher or 10% lower
Make educated guess
Supplier delivery of goods ordered
Make assumptions based on past experience
Write assumptions in an area of uncertainty (a risk)
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18. 1.1.8 Summary of a business case
 a description of the problem or opportunity that
exists in the business;
a list of the available options for delivering a solution
to resolve the problem;
a list of the costs and benefits associated with each
solution option;
a list of risks and assumptions
a recommended solution option for approval.
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19. 2.0 Feasibility Study
 A feasibility study is a detailed assessment of a
current business problem by identifying the various
solution options available and determining the
likelihood of each alternative solution meeting a
customer’s requirements.
A feasibility study can be done in house or by an
external group.
It can be useful to visit other organizations that have
tried similar projects and learn from their failures and
successes.
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20. 2.1 Feasibility study: decision
making tool
A feasibility study should provide management with
enough information to decide:
whether the project can be done
whether the final product will benefit its intended
users
what are the alternatives among which a solution will
be chosen (during subsequent phases)
- is there a preferred alternative which has been
chosen
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21. 2.2.0Types of feasibility studies
Operational
Define the urgency of the problem and the acceptability
of any solution;
If the system is developed, will it be used?
 Includes people-oriented and social issues: internal
issues such as labour objections, manager resistance,
organizational conflicts and policies;
 also external issues, including legal aspects and
government regulations.
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22. 2.2.0 Types of feasibility studies
Technical-- Is the project feasibility within the limits of
current technology? Does the technology exist at all? Is it
available within given resource constraints (i.e., budget,
schedule,...)?
Economic (Cost/Benefits Analysis ) -- Is the project
possible, given resource constraints? Are the benefits that
will accrue from the new system worth the costs?
What are the development and operational costs?
Schedule--Constraints on the project schedule and
whether they could be reasonably met
Finally, you prepare your report and you hand it in.
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23. 2.3.0 Collecting views for the
project
Begin with your customers
How will they be affected by the result?
 How they will benefit
Talk to your colleagues
What do they think about your idea?
What are their expectations from the project
Talk to the other people (with relevant expertise) inside
and outside your organisation
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24. 3.0 Establishing terms of reference
(TORs)
After the business case and feasibility study have
been approved, a new project is formed (Project
Charter).
At this point, terms of reference are created.
 The terms of reference define the goal, objectives,
scope and deliverables for the new project.
They also describe the organization structure,
activities, resources and funding required to
undertake the project.
Any risks, issues, planning assumptions and
constraints are also identified. 24Emmanuel Santa Mwagomba

25. 3.1.0. Develop a goal or project
purpose
3.1.1 A goal is a direction that you want to take at the
end of the project i.e
To install a new circulation system for the library
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26. 3.2.1 Objective(s)
Definition: is a statements of achievements,
attainable within the timeframe of the project, that
will lead to the accomplishment of project goals
Examples:
To develop circulation module for checking out and
checking in of library materials
To enable online reservations of library materials
To implement automatic overdue fine charges
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27. 3.2.2. Characteristics of objectives
 Specific. The objectives must be so clear and well defined that anyone with a
basic knowledge of the project area can understand them. They must precisely
define what the project will and will not do.
 Measurable. Objectives must be defined in measurable terms. If they cannot
be measured, they are too ambiguous and you need to define them more
clearly. To be successful, you must be able to measure and report on the
progress.
 Agreed-upon. The project manager, project sponsors, and customers must
agree on the project objectives. All stakeholders must agree that the end
result will solve the problem or respond to the opportunity defined.
 Realistic. The project objectives must be achievable, given the available
resources, knowledge, skills, and time. It might take some time and energy to
negotiate project objectives that are realistic.
 Time/cost-limited. The objectives need to be framed within clear time/cost
goals. The amount of available time (budget) as well as any available
flexibility, should be defined,
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28. 3.2.1 Objectives: Importance
Help to convince others
Give you a point of reference for monitoring
Help you decide between different courses of action
Let you know when you have finished
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29. 3.3 Scope
Defines what will be included in the project and what
will not
Write it down
To define scope refer back to your objective
What do you need to do to achieve your objective?
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30. 3.1.3 Scope
Everything which contributes directly to the
objective;
Everything you must do to achieve the objective is
within the scope
Everything else is outside.
Use project objectives to decide what the scope will
be
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31. Scope: components
Essential – the project must deliver these;
Desirable – included in the scope, but could be
dropped without destroying the project;
Nice to have – if the project has a lot of resources,
these could be included
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32. 3.1.4 Deliverables
Checking in and checking out circulation modules
Reservation module
Overdue fines module
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33. 3.2.0 Project organisation
This deals with who will be involved in the project
3.2.1 Customers: List the customers who intend to
use the deliverables produced by the
project. Customers may be individuals or
groups within or outside the company. The
success of the project will be based primarily on
whether or not the deliverables produced
match the requirements of the customers
identified
3.2.2 stakeholders: you list all people or groups who
have interest in your project
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34. 3.2.3 Develop structure, roles and reporting lines
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35. 3.4.0) Initial plan - Tasks
In this you come up with a number of activities to
and these activities can be arranged according to
dates in you will perform them within the time frame
It is preferred that you must use the Gantt chart
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36. 3.4.1 Initial plan: resources
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37. 3.5.0 Listing project considerations
 Risks – summarise most apparent risks
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38. 3.6 List of assumptions
List the major assumptions made while defining the
project. Examples include:
Prices of hardware and software will not increase
during the course of the project.
Additional human resources will be available from the
IT section to support the project.
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39. 3.5.2 Project constraints
List the major constraints identified while defining
the project. Examples include:
 If time is short, the resources (cost) must increase or
scope must decrease, or both.
 If funds are short, the time can be extended or scope
must decrease, or both.
 If the scope is large, the cost will be greater or the time
must be extended, or both.
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