Research Methods

It is important to research the costs, benefits, assumptions, and constraints associated with a project, and to include your findings in your business case.

2. Research methods

It is important to research the costs, benefits, assumptions, and constraints associated with a project, and to include your findings in your business case.

The decision makers who read your business case need this information in order to weigh the pros and cons of the project.

You need to know how to identify and categorize the costs and benefits of your project.

To identify the costs associated with a project, you should

form a team

Your cost-identification team should include the key members of the project team, to ensure a good understanding of the key issues associated with the project and the possible costs.

choose a facilitator

The facilitator should be someone who can remain impartial and help the group to reach agreement on any issues that may arise.

identify the costs

It is useful to create a list of possible costs for comparison with the costs actually incurred over the course of the project. Unquantifiable costs should be noted and mentioned in your cost discussion in the business case.

enter the costs in a spreadsheet

You should organize the spreadsheet according to a relevant time period, such as a year, quarter, or month, with a column for each unit of time over the expected project duration. The subtotals of the costs of each project element for each period are added up to give the total cost.

Ana is a project manager for an educational software company. She wants to investigate a new system that will make the company's product database more efficient. She wants to carry out some research on the issue before she begins work on a business case.

To identify the costs associated with the project, Ana

forms a team

Ana's cost-identification team consists of members of the project team who are familiar with the product database, the development technologies that will be used, and what the proposed update would involve.

chooses a facilitator

Ana asks Bob, a software developer from outside the project team, to perform the role of facilitator, as he can provide impartial judgment on project-related issues.

creates a list of possible costs

The main costs of the project are those incurred during a database cleanup, software purchase and installation, server upgrade, and the hiring of an IT consultant.

enters the costs into a spreadsheet

Ana's team organizes the cost data on a monthly basis, to coincide with the main project milestones.

QUESTION

Alan, a project manager at an IT company, is putting a business case together for an online marketing campaign. Alan needs to identify the project costs. In which order should he take these steps?

1. List the costs of designing advertisements and displaying them on major portal sites
2. Ask Jane, the accounts manager, to sit in on discussions
3. Input into a spreadsheet all research, development, and execution costs for the campaign, arranged by quarter
4. Create a team, including marketing personnel, a graphic designer, and an IT consultant, to discuss costs

Create a team, including marketing personnel, a graphic designer, and an IT consultant, to discuss costs is ranked

Your cost-identification team should include the key members of the project team, to ensure a good understanding of the key issues associated with the project and the possible costs.

Ask Jane, the accounts manager, to sit in on discussions is ranked

You should choose a facilitator who can remain impartial and help the group to reach agreement on any issues that may arise.

List the costs of designing advertisements and displaying them on major portal sites is ranked

You should create a list of possible costs for comparison with the costs actually incurred over the course of the project.

Input into a spreadsheet all research, development, and execution costs for the campaign, arranged by quarter is ranked

You should organize the spreadsheet according to a relevant time period, such as a year, quarter, or month, with a column for each unit of time over the expected project duration.

Once you've documented the costs of the project, you need to identify the benefits of the project.

Your benefit-analysis team should include key members of the project team so that everyone has a common understanding of the benefits, and how they are linked to the original project objectives. The team should have a facilitator.

Your team should brainstorm the benefits that your organization will gain from your project, so that no potential benefit is overlooked.

Benefits should highlight tangible returns in terms of cost savings and incremental revenue, but qualitative benefits, such as increased customer satisfaction and employee satisfaction, should also be included.

You should include stakeholders and operational managers in this process, to foster cross-organizational support for the business case.

When you have compiled a list of benefits, you should categorize them into natural groups, combining similar areas and eliminating any redundancies.

Once you've done this, you can compare these benefits with the original objectives for the project and identify any gaps and oversights. This enables you to align the benefits with the project objectives.

QUESTION

Identify the steps you should take to identify benefits of a project.

1. Choose a team and facilitator
2. Have a meeting to discuss all ideas for potential benefits
3. Consider only tangible project benefits
4. List the benefits
5. Identify any gaps or oversights
6. Keep the process strictly within the team

Your team should include key members of the project team so that everyone has a common understanding of the benefits.

Your team should brainstorm the benefits that your organization will gain from your project, so that no potential benefit is overlooked.

Qualitative benefits, such as increased customer satisfaction and employee satisfaction, should also be considered.

You should categorize the list of benefits into natural groups, combining similar areas and eliminating any redundancies.

Comparing the benefits with the original objectives for the project enables you to align the benefits with the project objectives.

You should include stakeholders and operational managers in the process, to foster cross-organizational support for the business case.

1. Choose a team and facilitator
2. Have a meeting to discuss all ideas for potential benefits
4. List the benefits
5. Identify any gaps or oversights

Having documented the costs of her project, Ana needs to identify the project benefits.

She begins by putting together a benefits-identifying team with a facilitator.

The team meets and brainstorms potential benefits of the project. Increased database efficiency brings the tangible benefits of increased revenue and possibly more new business.

The new database also brings qualitative benefits such as greater time savings for employees and improved customer service.

These are then aligned with the main project objectives of helping product managers and sales staff to work more efficiently and increase sales.

It is vital that your business case documents any assumptions that are made concerning the project. You should examine your assumptions in three main categories.

Product

Product assumptions relate to the product or service being offered by the project. Questions to be asked include: Does the project meet customer needs? Will it have a measurable impact on the company's bottom line? Are the costs prohibitive? Are the necessary materials easily obtainable? Are the product support systems established? Can the product be developed in a reasonable amount of time?

Economic

Economic assumptions relate to the economic environment in which your project will operate. Questions you should ask are: Is your industry currently healthy? How do economic changes affect your industry? Are your industry forecasts positive?

Market

Market assumptions are those that concern the potential market for the project. You should ask: Is the market for your product or service clearly identifiable? Is the market ready for your idea? Is the market large enough to support your idea? What barriers are there to entering your market?

To answer the many practical questions that will arise when documenting project assumptions, you should work with people who are actively involved at an operational level.

Managers and consultants, for example, have the expertise to help you test project assumptions. Company directors, on the other hand, are more concerned with broad strategic issues than with the requirements of specific projects.

Having researched the costs and benefits for the database project, Ana meets with John, a sales manager, and Ravi, the company's IT manager, to discuss the project assumptions.

Ana: For this business case I'm making the assumption that there is a real business need for improved access to our product catalogue. Can you back me up on this John?

John: I certainly can. We're losing a lot of business by not having ready access to our product offerings. Our sales staff have been looking to get this issue resolved for a long time.

Ana: OK, good. Ravi, I'm assuming that existing IT support systems will be sufficient to allow the database project to roll out in a reasonable amount of time. Does that seem fair?

Ravi: That shouldn't be a problem - we can provide support for the database cleanup, software installation, and server upgrade. But you'll have to budget for any additional resources.

John: Speaking of costs, we should also assume that sales over the next quarter will remain constant. This will be important when calculating the impact of any downtime.

Ana: Yes, I'll take this into consideration. Finally, I'm assuming that the market conditions for this project are as good as they're going to get, and that it should be done right away. What do you think?

John: I think that's right. We've reached a point where our sales figures are falling behind, because the product information just isn't accessible. If we don't do something about it, we'll be overtaken by the competition.

Ravi: John and I have worked together on the requirements, and the demand for the project is very high - from both employees and customers.

Ana has tested the assumptions of the business case with Ravi and John, both of whom are stakeholders in the project. In doing this, she ensures the validity of her assumptions, and also gains support for the project across different departments.

It is important to document and validate all assumptions, and to keep track of the sources you use for statistics and cost estimates.

QUESTION

Which steps should you take to test assumptions for your project?

1. Examine product assumptions
2. Discuss them with project stakeholders and operational managers
3. Examine the company's past activity
4. Discuss them with the board of directors
5. Examine economic assumptions
6. Examine market assumptions

You need to decide whether the product or service meets customer needs, how it will affect the company's bottom line, if it is viable in terms of cost and resources, and if it can be realized in a reasonable amount of time.

This helps to foster cross-organizational support for the project.

Assumptions are statements used to describe the present and future environment, not the past.

The board of directors is not sufficiently engaged with the project to be able to test your assumptions.

You should examine the economic environment in which your industry is situated, and try to anticipate changes.

This helps you to establish whether the proposed market is identifiable, of sufficient size, and ready for the product or service.

1. Examine product assumptions
2. Discuss them with project stakeholders and operational managers
5. Examine economic assumptions
6. Examine market assumptions

Constraints limit the scope and content of available alternative solutions.

To research the constraints on a project, you should talk to team members to determine the likely availability of resources.

You should also consider your company's corporate culture, and the positive or negative effects that your proposed project could have on the company and its employees.

Finally, you need to list and prioritize the criteria for the project, as they relate to the constraints. For example, you may need to rank criteria such as schedule, cost, and quality in order of importance.

Ana and her team are researching the constraints affecting the database project. To do this, the team must

research the availability of resources

The project will require some IT support during implementation, as well as the hiring of temporary staff.

investigate the corporate culture

The team reviews the company's rules, methods, and procedures for the business areas affected by the project.

list the schedule and budget constraints

The departmental budget for new projects is $70,000. The project needs to be completed before the start of the next financial quarter.

list the quality constraints

The product database needs to be accessed by customers, so it may need to contain more information relating to purchase price, shipping charges, and sales tax than one developed solely for employee use.

list the technical constraints

The database needs upgrading, and new software and hardware need to be integrated into the existing system.

prioritize the constraints

Ana's team decides that the schedule constraint should be prioritized over budgetary, technical, and quality constraints.

QUESTION

Which steps should be carried out when investigating project constraints?

1. Research the availability of resources
2. Investigate the corporate culture
3. Research the competition
4. List the schedule, budget, quality, and technical constraints
5. Prioritize the constraints
6. Plan the project outside the constraints

You should discuss the issue of resources with members of your project team to assess availability.

This helps you to consider the positive or negative effects that your project could have on the company and its employees.

The competition does not affect the project's constraints.

These are constraints that directly affect the implementation and delivery of your project.

For example, you may need to rank criteria such as schedule, cost, and quality in order of importance.

Constraints dictate the parameters of your project, so it is not possible to work outside them.

1. Research the availability of resources
2. Investigate the corporate culture
4. List the schedule, budget, quality, and technical constraints
5. Prioritize the constraints

Simon is a sales manager at a national bookstore, with 79 branches throughout the United States. He wants to put together a business case for a supplier extranet web site to make ordering more efficient and streamline the supply and ordering processes across the stores. The categories that Simon researches are

costs

Simon forms a team with personnel from different branches, and chooses a business acquaintance as a facilitator. He outlines and records all costs associated with development of the extranet, from planning through to rollout and training.

benefits

Simon forms a team from members of his project team, and a facilitator from outside the team. The team lists the benefits to the company of the extranet project - for example a more integrated ordering process and increased customer satisfaction.

assumptions

Simon tests the project's assumptions by discussing them with sales and development personnel. He is assuming that the project can be completed within a reasonable time frame, that the costs will not run over budget, and that the current demand in stores for the extranet system will continue.

constraints

Simon researches the availability of resources for the project, the corporate culture, and the schedule, budget, quality, and technical constraints. Because the extranet ordering system needs to be rolled out quickly and seamlessly, the schedule constraint takes priority over budget or technical constraints.

Omar's Project

Omar is a project manager in a successful clothing company. He believes that the company's web site could be updated to enable customers to view and order clothes from their nearest outlet, guaranteeing prompt delivery, cost savings, and a high level of customer satisfaction. Omar is researching the costs, benefits, assumptions, and constraints of the project before writing the business case.

The existing web site is maintained part-time by a contractor, and does not have an ordering function. The project is to be rolled out over the next financial year.

As part of their research, Omar and key members of his project team have created a list of cost-savings benefits amounting to $40,000 per year. Omar hopes this will sell the project to the decision makers. This information is not being discussed with anyone outside the team until the business case is presented.

Omar's team assumes that the positive financial forecasts they've studied with sales managers are accurate, and that the web site can be developed in a reasonable amount of time. They are also assuming that customers will be ready for the web site change, although they have not discussed this with Marketing.

The company's IT Department has said that it can provide support for the duration of the project. Also, having received feedback from Sales, Omar decides that it is more important to roll out the site on schedule than to ensure that everything on it works perfectly right away. It is not known yet which department will be responsible for the hiring of a web administrator.

QUESTION 1

Which steps should Omar take to identify costs?

1. Research all the costs by himself
2. Form a cost-identification team with members of his project team and IT personnel
3. Ask Lionel, a colleague of Omar's from the HR Department, to be the team facilitator
4. List the costs of hiring a dedicated web administrator, developing a new web site, and upgrading the web security software
5. Create a list of unquantifiable costs such as those arising from possible changes to the project goals
6. Enter into a spreadsheet all costs associated with the research, development, and execution of the campaign by financial year

Omar by himself would not have a sufficient overview of all the cost-related issues of the project.

This ensures a good understanding of the key issues and potential costs.

The facilitator should be someone who is not part of the project team and who can make impartial judgments.

The list of possible costs for setting up the project will be checked against the actual costs incurred over the course of the project.

At this stage, unquantifiable costs are not listed. However, they should be discussed in the business case.

Because the project is scheduled over the financial year, the spreadsheet should arrange costs by financial year.

2. Form a cost-identification team with members of his project team and IT personnel
3. Ask Lionel, a colleague of Omar's from the HR Department, to be the team facilitator
4. List the costs of hiring a dedicated web administrator, developing a new web site, and upgrading the web security software
6. Enter into a spreadsheet all costs associated with the research, development, and execution of the campaign by financial year

QUESTION 2

Identify the areas in which Omar followed the correct procedure to identify the benefits of the project.

1. Forming a benefits-analysis team
2. Listing the cost savings of $40,000 per annum represented by the project
3. Listing customer satisfaction as a benefit
4. Keeping the entire process inside the team
5. Associating increased sales and cost savings with increased customer satisfaction and ordering efficiency

Omar formed a team from key members of the project team, who have a common understanding of the benefits.

Omar's team has researched the tangible benefits of the project.

Omar's team listed only tangible benefits such as sales increases. Intangible benefits should also be included in a business case.

Omar should have included IT and sales managers in the process, to foster cross-organizational support for the business case.

Omar did not draw a connection between the financial benefits of the project and the qualitative benefits.

1. Forming a benefits-analysis team
2. Listing the cost savings of $40,000 per annum represented by the project

QUESTION 3

Identify the ways in which Omar's team correctly researched assumptions for the project.

1. By ascertaining the readiness of customers for the new web site
2. By discussing the assumptions with sales managers
3. By discussing the assumptions with marketing managers
4. By studying the financial forecasts

Without the assistance of marketing staff, the team was unable to validate this market assumption.

This helped the team to validate its economic assumption.

The team did not discuss its assumptions with Marketing.

This may help the team to anticipate the future economic environment in relation to the project.

2. By discussing the assumptions with sales managers
4. By studying the financial forecasts

QUESTION 4

Which of these actions by Omar's team were effective in investigating the project constraints?

1. Establishing the availability of IT support for the project
2. Investigating the company's corporate culture
3. De-emphasizing the budget and quality constraints of the project
4. Prioritizing the timely rollout of the web site
5. Discussing the hiring of a web administrator

Good IT support is necessary for the success of the project.

The impact of the project on other areas, such as corporate culture, was not considered by the team.

Project budget and quality issues were deemed subordinate to schedule constraints.

The schedule constraint is prioritized over the quality constraint, in response to feedback from Sales.

The hiring of the web administrator is a budgetary constraint, and has not been researched.

1. Establishing the availability of IT support for the project
3. De-emphasizing the budget and quality constraints of the project
4. Prioritizing the timely rollout of the web site

It is important to research the costs, benefits, assumptions, and constraints associated with a project, and to include your findings in your business case.

Project costs can include personnel, overhead, installation, operational, and consultant costs. Benefits include operational savings, improved customer satisfaction, increased revenue and market share, and improved employee satisfaction. You must perform a cost and benefit analysis to establish whether the project is viable and worthwhile.

When planning a project, you need to make certain assumptions about the present and future business environment. These should be tested with project stakeholders and operational managers, and documented in your business case.

Constraints that can affect your project include schedule, budget, quality, and technical constraints.

Seven Resources for Building Your Case

Purpose: Use this Job Aid to identify company resources that can assist in the building of a business case.

Certain departments within your company can assist you in building your business case. In most companies, these can be broadly classified into seven categories: Research and Development, Facilities and Equipment, Materials and Supplies, Sales and Marketing, Financial Services, Legal Services, and Human Resources.

Research and Development

The Research and Development department can help you develop, design, test, and modify your product or service idea.

Facilities and Equipment

The Facilities and Equipment department can help you determine whether your idea is logistically feasible. It can help you to determine, for example, whether the facilities are sufficient to support the new project, whether the energy, utilities, and services needed for production are available, and if any equipment will be necessary to produce the new product or service.

Materials and Supplies

The Materials and Supplies department can provide useful assistance in determining what materials will be needed for the new product, and whether such materials are readily available.

Sales and Marketing

The Sales and Marketing department can inform you on matters relating to the promotion and marketing of the new product or service. They can share their knowledge of the market with you, and provide insight into matters such as pricing and distribution. Sales and Marketing departments can also provide advice on order-fulfillment and customer-service strategies.

Financial Services

Without relevant financial information, you will not be able to successfully argue your case. Financial Services tell you how research and development costs will be handled. They can provide you with company budget figures for new product development and suggest a realistic budget for the new product. Financial Services can also ensure the availability of up-to-date information on sales and expenses.

Legal Services

If you are planning a new product, you will need to engage Legal Services to find out if there are any patent, copyright, trademark, or service mark issues to resolve. Legal Services can also assist with international tax and distribution laws.

Human Resources

The Human Resources department can supply you with information regarding the labor resources that your company already has on hand. They will also have data about company hiring goals. This information will tell you how much of a cost strain your project will be on the budget.

Using internal resources to gather information about developing a new product or service will help you to write and present a business case that meets the demands of future customers while at the same time achieving company goals and objectives.

I have been teaching and training agents, team leaders, supervisors, managers and admins of call centers and other businesses in BPO related fields. This series, comes as a result of that experience. I have more than 4,000 modules that I plan on sharing here. This is # 007-08

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