PRINCE2® defines a Project as: “a management environment that is created for the purpose of delivering one or more business products according to a specified Business Case” (what PMBOK® includes in the Project Charter).
Also, PRINCE2® states in its terminology that a “Business Case is used to define the information that justifies the setting up, continuation or termination of the project. It answers the question: ‘Why should this project be done?‘ It is updated at key points throughout the project”.
So a Project Director (PD) must know very well what are the reasons why a project was initiated; and these strategic reasons must be taken into account throughout the project. The PD must align the project to business goals when deciding the scope of the project, when the project is being planned and when deciding what changes are allowed.
The Business Case or Project Charter can cover many points (the Project Charter more than the Business Case), but the most important point deals with alignment of the project objectives with the business goals and strategies of the organization or company.
All project objectives must be linked to business goals and strategies, but it is possible to find well-defined objectives and poorly defined ones. It is very important to invest the time needed to establish SMART objectives, because these will establish Client and stakeholders expectations.
A SMART objective stands for Specific, Measurable, Agreed upon, Realistic and Time/Cost limited. It is recommended to make a specific ROI (Return On Investment) analysis for each project objective.
Other VOI (Value On Investment) references could be established, unless these are more difficult to calculate.
Remember that if SMART objectives were correctly established, ROI will be easily recalculated at the end of the project – to know if this project has succeeded or not.
And finally when calculating the ROI, never forget to pay attention to the TCO (Total Cost of Ownership) in your calculations. ROI is not only about the project execution, but also about the final delivered product.
What is your advice about the best way to align project to business goals?