Business Justification and the Project Lifecycle

May 26, 2018
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Business justification demonstrates the reasons for undertaking a project. It answers the question “Why is this project needed?” Business justification drives all decision making related to a project. So, it is important to assess the viability and achievability of a project not only before committing to significant expenditures or investment at initial stages of the project but also to verify the business justification for continuance throughout the project’s lifecycle. A project should be terminated if it is found to be unviable; the decision should be escalated to the relevant stakeholders and to senior management. The business justification for a project must be assessed at the beginning of the project, at pre-defined intervals throughout the project, and at any time when major issues or risks that threaten the project viability arise.

The following steps capture how business justification is determined:

  1. Assess and Present a Business Case

Business justification for a project is typically analyzed and confirmed by the Product Owner. It is documented and presented in the form of a project Business Case prior to Initiate phase and involves considering the various factors. Once documented, the Product Owner should create a Project Vision Statement and obtain approval of the Project Vision Statement from the key decision-makers in the organization. Generally, this consists of executives and/or some form of a project or program management board.

 

  1. Continuous Value Justification

Once the decision makers approve the Project Vision Statement, it is then baselined and forms the business justification. The business justification is validated throughout project execution, typically at predefined intervals or milestones, such as during portfolio, program, and Prioritized Product Backlog Review Meetings and when major issues and risks that threaten project viability are identified. Throughout the project, the Product Owner should keep the business justification in the Project Vision Statement updated with relevant project information to enable the key decision makers to continue making informed decisions.

 

  1. Confirm Benefits Realization

The Product Owner confirms the achievement of organizational benefits throughout the project, as well as upon completion of the User Stories in the Prioritized Product Backlog. Benefits from Scrum projects are realized during Demonstrate and Validate Sprint, Retrospect Sprint, Ship Deliverables and Retrospect Project processes.

The following figure summarizes the steps to determine business justification.

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