Business Analysis: The Best Way to Start a Project

How do projects get started in your organization? A strong business analysis knowledge can save your organization significant time and money by weeding out low-value projects and prioritizing valuable ones based on business need and realistic, expected benefits. If you’re thinking, “well, it depends,” you are not alone. Few organizations have a well-defined, consistent way of deciding when work becomes a project.  Let’s dig in.

Six Step Process to Start a Project

1. Receive Request for Work
2. Analyze the Request
3. Develop a Solution Approach and a Business Case
4. Prioritize Against Other Projects
5. Get Approval and Funding
6. Assign a Project Manager and Start Planning

Evaluating Stakeholder Requests

Having a consistent process assures stakeholders that every request will be considered equally. As titles and job responsibilities vary in organizations, any professional with strong business analysis skills can manage this pre-project work. Follow these six steps to develop a structure for evaluating stakeholder requests.

Step 1: Receive Request for Work

All work starts with a request.  This of this as a potential project.  The work starts by someone inside or outside the organization asking for something to be changed, added, or removed from the organization’s processes or systems.  A request is the trigger that sets the work in motion and the requestors are the first known stakeholders.  There are generally three types of requests.

1. A problem: The requestor or problem owner may have called the help desk or filled out a problem ticket. A problem can also be identified by a business leader from customer feedback.
2. An opportunity: How can you improve value or increase revenue? An opportunity could help an organization more toward its goals more quickly. An opportunity may be a new product idea or a process improvement.
3. A constraint: Constraints may be imposed on an organization by management’s internal policies or by an outside agency.

The organization must review requests to analyze importance, urgency, and priority.

Step 2: Analyze the Request

Not every request will bring the same business value to the organization.  Some requests are better than others, and some requests may not be good at all. You need to analyze the value of each request and prioritize accordingly. Project objectives should help articulate the business value. However, defining project objectives is challenging because stakeholders often have conflicting values and expected benefits.  Facilitating conversations about expected benefits, goals and objectives can help stakeholders reach agreement.

Value can be determined by worth or price, but it can also be influenced by missed opportunity costs.  That is why every project request should be evaluated for its business value. Select high-value projects by spending time upfront determining the expected business benefits and the costs.

Project requests can be added to one of three buckets to help determine if the project is worth pursuing.  A request that will resolve a serious problem impacting the organization’s ability to do business is a MUST DO.  If the request will cost more to improve that it will save in expected benefits should go into the REJECTED bucket. If a problem is less immediate, the request is placed in the LOOKS PROMISING bucket to be further analyzed and prioritized. The process of bucketing requests allows you to begin discussion the solution and build the business case.

Step 3: Develop a Solution Approach and a Business Case

When the initial analysis confirms the request is worth pursuing, the team needs to discuss solution alternatives and assess the estimated costs of each. Teams often use brainstorming techniques to generate creative, innovative ideas for solutions, then analyze each possible idea. Regardless of the method you chose, all feasible options should be considered before one is chosen.

Once the solution approach (or product vision) is agreed upon, it’s time to estimate the business value and costs involved in designing and building the solution along with the expected maintenance costs. These benefits and costs are then compared in a business case or cost/benefit analysis to determine if the request should move forward.

The business case includes the estimated net business value of the request with objective, measurable criteria.  Keep in mind that financial considerations are only one component of project selection.

Step 4: Prioritize Against Other Projects

Once a request has a business case, it can be prioritized against existing requests.  This backlog of requests should be reviewed on a regular basis, and the highest priorities should be promoted to projects.

Organizations that don’t follow this six-step process often struggle with prioritization. Sometimes the requester with the highest position in the organization gets their requests prioritized. Sometimes organizations respond first to the requests that are smallest or easiest to complete and never get to the bigger, more complicated initiatives.

Other organizations try to work on every request and wind up with overworked employees and few completed projects.  Prioritization is difficult, but it be easier if each request has a business case and a strategic plan for comparison.

Step 5: Get Approval and Funding

Just because a request is likely to add business value doesn’t mean the organization has the time or resources to complete it immediately.  Once a request has been analyzed and prioritized, someone in the organization must provide funding.

The project sponsor, as the key stakeholder, is the person or group (such as the steering committee) who provides the funding for the project. The sponsor may be the original requester the requester’s manager, or an executive.

If particular skills are needed, the sponsor could move employees off lesser-value projects or look for outside resources to fill the gaps.  If the project is requested by an outside customer, the price is established, and a proposal is presented to them.

When the value is financial, there are many formulas that can be used to evaluate and compare options.  Return on investment calculations estimate how much the organization will receive if they fund the potential project.  Other financial measure, such as the internal rate of return and net present value may be used. However, value can’t always be calculated in financial terms. In some cases, the best choice might be a project with a longer payback period with other intangible advantages such as customer satisfaction.

Step 6: Assign a Project Manager and Start Planning

Only after completion of the previous five steps does a request become a real project.  At this point, the organization assigns a project manager who begins planning the project.  When these six steps are complete, the project manager has great information with which to plan.

If a project manager struggles during project planning, it may be an indication that this pre-project analysis was not done.

Need Additional Help?

Business analysis work is not just about requirements. Deepen your Business Analysis skills and knowledge to help your organization to understand the business value and assess the importance of requests before you start a project.

Still have questions and need some extra guidance? Consider one of RMC’s popular business analysis eLearning courses including Business Analysis Fundamentals or Business Analysis: A Critical Role on Projects.

Sources:

https://rmcls.com/ask-the-why-question-it-really-works-requirements/

https://www.teamgantt.com/blog/how-to-prioritize-projects