Value, including outcomes from the perspective of the customer or end user, is the ultimate success indicator and driver of projects. Value focuses on the outcome of the deliverables. The value of a project may be expressed as a financial contribution to the sponsoring or receiving organization. Value may be a measure of public good achieved, for example, social benefit or the customer’s perceived benefit from the project result. When the project is a component of a program, the project’s contribution to program outcomes can represent value.
Many projects, though not all, are initiated based on a business case. Projects may be initiated due to any identified need to deliver or modify a process, product, or service, such as contracts, statements of work, or other documents. In all cases, the project intent is to provide the desired outcome that addresses the need with a valued solution. A business case can contain information about strategic alignment, assessment of risk exposure, economic feasibility study, return on investments, expected key performance measures, evaluations, and alternative approaches. The business case may state the intended value contribution of the project outcome in qualitative or quantitative terms, or both. A business case contains at least these supporting and interrelated elements:
- Business need. Business provides the rationale for the project, explaining why the project is undertaken. It originates with the preliminary business requirements, which are reflected in the project charter or other authorizing document. It provides details about the business goals and objectives. The business need may be intended for the performing organization, a client organization, a partnership of organizations, or public welfare. A clear statement of the business need helps the project team understand the business drivers for the future state and allows the project team to identify opportunities or problems to increase the potential value from the project outcome.
- Project justification. Project justification is connected to business need. It explains why the business need is worth the investment and why it should be addressed at this time. The project justification is accompanied by a cost-benefit analysis and assumptions.
- Business strategy. Business strategy is the reason for the project and all needs are related to the strategy to achieve the value.
Together, the business need, project justification, and business strategy, in addition to benefits and possible agreements, provide the project team with information that allows them to make informed decisions to meet or exceed the intended business value.
Desired outcomes should be clearly described, iteratively assessed, and updated throughout the project. During its life cycle, a project may undergo change and the project team then adapts in response. The project team continuously evaluates project progress and direction against the desired outputs, baselines, and business case to confirm that the project remains aligned to the need and will deliver its intended outcomes. Alternatively, the business case is updated to capture an opportunity or minimize a problem identified by the project team and other stakeholders. If the project or its stakeholders are no longer aligned with the business need or if the project seems unlikely to provide the intended value, the organization may choose to terminate the effort.
Value is the worth, importance, or usefulness of something. Value is subjective, in the sense that the same concept can have different values for different people and organizations. This occurs because what is considered a benefit depends on organizational strategies, ranging from short-term financial gains, long-term gains, and even nonfinancial elements. Because all projects have a range of stakeholders, different values generated for each group of stakeholders have to be considered and balanced with the whole, while placing a priority on the customer perspective.
Within the context of some projects, there may be different forms of value engineering that maximize value to the customer, to the performing organization, or other stakeholders. An example of this includes delivering the required functionality and level of quality with an acceptable risk exposure, while using as few resources as possible, and by avoiding waste. Sometimes, especially in adaptive projects that do not have a fixed, up-front scope, the project team can optimize value by working with the customer to determine which features are worth investment and which may not be valuable enough to be added to the output.
To support value realization from projects, project teams shift focus from deliverables to the intended outcomes. Doing so allows project teams to deliver on the vision or purpose of the project, rather than simply creating a specific deliverable. While the deliverable may support the intended project outcome, it may not fully achieve the vision or purpose of the project. For example, customers may want a specific software solution because they think that the solution resolves the business need for higher productivity. The software is the output of the project, but the software itself does not enable the productivity outcome that is intended. In this case, adding a new deliverable of training and coaching on the use of the software can enable a better productivity outcome. If the project’s output fails to enable higher productivity, stakeholders may feel that the project has failed. Thus, project teams and other stakeholders understand both the deliverable and the intended outcome from the deliverable.
The value contribution of project work could be a short- or long-term measure. Because value contribution may be mixed with contributions from operational activities, it may be difficult to isolate. When the project is a component of a program, evaluation of value at the program level may also be necessary to properly direct the project. A reliable evaluation of value should consider the whole context and the entire life cycle of the project’s output. While value is realized over time, effective processes can enable early benefit realization. With efficient and effective implementation, project teams may demonstrate or achieve such outcomes as prioritized delivery, better customer service, or an improved work environment. By working with organizational leaders who are responsible for putting project deliverables into use, project leaders can make sure that the deliverables are positioned to realize the planned outcomes.
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