Creating a case for business

It is not unusual for a business analyst to be involved in the validation of a project and be involved in project selection. After all, organizations need to make sure that whatever they spend their money on aligns with the intended return on investment (ROI) or the outcome they were hoping for.

Because the global economy fluctuates so much, a business analyst will look at several different financial models and make an educated guess on expenditures and ROI. Although a business case isn't completely money-oriented, the majority of project decisions rest on financial considerations. This can help executive management and key stakeholders understand the initiative from a financial perspective and weigh in the results from a scope perspective, and decide whether it's actually worth it to charter the project.

The business need and justification can also come in the form of high-level estimates of an overall project budget, a predicted result for the scope of work, and possible timelines that would be acceptable, given the expected return on financial investments. This helps the prospective project manager understand project work from the business perspective.

Trust me when I say that even after all the financial analysis that goes into developing a business case, that analysis can be very wrong when all is said and done. This is why the project manager will gather scope requirements and build a schedule and a budget around what is actually going to occur at a fine-grained level. Even then, they could be wrong. There is a better chance at getting close to the right numbers once the project is planned and understood. It's the project manager's job to determine whether the crunched numbers are feasible in the beginning of the project. That is why, in some cases, the project manager is a contributor to the process of project selection and may be part of the selection committee. Still other times, all this analysis is being done in spite of us as we happily go about our day, unknowing that a new project is being considered.

The range of possibilities could be unacceptably wide. To narrow the gap, more work is needed. There are several categories of techniques that are used to analyze the costs versus the benefits:

• Decision models
  • Constrained optimization
  • Benefit measurement 
• Economic models
• Expert judgment