process everywhere

Often times one of the most overlooked aspects of carrying out a project is quantifying the business value an organization can expect to recoup by investing time and resources into that project. Of course consensus can still be built without taking a look at the numbers. Projects still move forward when everyone in the room agrees that taking action is a “no-brainer”.

Unfortunately for the organization’s shareholders, the decision makers will put this common phrase into practice by absent-mindedly skipping the upfront work of quantifying the end benefit to the organization. Instead, in many cases they will simply spend the money that has been set aside for their department and the emphasis for carrying out projects shifts from delivering value to staying under budget and meeting deadlines.

In these sorts of organizations, projects that actually destroy business value can be deemed as a success because they were completed cheaper and sooner than originally anticipated. Picture a toll road that is constructed out of gravel. It might be cheaper and quicker to build than a highway, but if no one pays to drive on it the project can obviously not be considered a success. The reward for the time and effort spent to build the project will never be recouped.

By instead putting in the effort to calculate the business value upfront, the organization sets the correct tone for all future activities related to that project. It not only answers but also provides justification for the most important question of all: Why take action?

• Pre Project
  From the very beginning, building a financial justification allows the organization to compare the project against other alternatives. It also develops the goals of the project and paints the end picture of what a successful project looks like from day one.

• During the Project
  During the implementation of the project the business value should continuously be revisited as uncertainty reduces. Known facts will replace and revise the estimates and assumptions from the initial plan. If evidence presents itself that the project will destroy value or that other alternatives are more attractive, knowing the business value gives the organization the power to abandon the project before digging a deeper hole.

• Post Project
  After the project is completed, it gives the organization an idea of what to measure. The organization will know if the project is successful and what steps can be taken to further increase business value.