Week 2 Case Study
Case Background:
Ms. Sally Jones, the CEO of Acme Company, recently was given a report published by the Project
Management Institute called the Pulse of the Profession.1 In the report, she learned a startling statistic.
PMI® reported that when projects are poorly managed, approximately $122 million is wasted for every
$1 billion spent (12.2%). Now, her company’s annual project spend is much smaller (approximately $3
million expected in the next 12 months), but if she could experience even a partial amount of that savings,
she could reinvest those savings for future growth.
In order to accomplish this, she believes that she needs to adopt a more formal or mature approach to
managing projects, and she needs to professionalize the project management teams and, specifically, the
project managers. She has a colleague (Owu Jourdain) from a previous company who was the internal
project management expert in the company who she believes might be able to help, so she gives him a
call to get his take.
Ms. Jones just finished a long conference call with Mr. Jourdain, and she now has a better idea of what
this might take to move forward. In short, in Mr. Jourdain’s opinion, there is a way to experience the
savings that Ms. Jones hopes for, but it will take some time and investment, so she thinks they should
move forward with maturing their team and management approach, but, as noted, it will take an
investment, so Ms. Jones needs to be certain that the savings will deliver sufficient business value. In
short, is there a solid, defensible business case for such a project?
Present Situation:
Ms. Jones emailed you the Pulse of the Profession report over the weekend, and you are now sitting in her
office at 9:00 am on Monday morning. She wants you to develop a business case for implementing a
training program that will lead to maturing the organization’s project management practices. Based on her
work over the weekend to see where some monies may be available for the unexpected project and her
conversation with Mr. Jourdain, she provides you with the following information:
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The company expects to spend approximately $3,000,000 on project related work over the next
12 months (year 1) and $3,500,000 over the following 12 months (year 2)
Based on her conversations with Mr. Jourdain, she believes the cost of training and implementing
a more mature model will be approximately $175,000 as an initial investment
Conservatively, she believes that the company will experience a savings of 3 percent in the first
year and 4.5 percent in the second year
Although the company will experience these savings for many more years in her opinion, she
wants to show that the company will receive a sufficient savings within the first 2 years to justify
this investment within the business case
On most investments, the company would expect to see a return of 11½ - 12 percent (internal rate
of return), and the cost of money (discount rate) is 6 percent.
Including in assigned reading for Week 1.
Part 1: Business Case Assignment Instructions & Considerations
You have been tasked by Ms. Jones with drafting a business case for this potential initiative, and she has
provided you with a template to use (see template attached to assignment instructions). She provides you
with the following comments related to each section of the template, but she tells you that you will need
to sharpen and expand on the ideas that she has provided. She expects your final draft to be ready to take
to the company’s Board of Directors for review and approval by week’s end.
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Background and Business Problem
o She believes this has been covered in the contents of your initial conversation, where she
provided you with background information (see above case study material)
Strategic Case
o She states that this is strategically tied to the company’s goal of becoming more project
oriented, as they believe this will allow for more efficient and effective work, leading to
the company being able to grow in a more scalable manner.
Project Overview
o In addition to what she has stated above, if the business case is approved, then she
believes the basic project would be an 8 – 10 week training program for all project
managers and team members that would train them in the adoption of a more mature
project management model, and it would include some mentorships by the trainer. She
believes this would cost a total of $175,000.
Expected Benefits
o The expected benefits would be increased efficiencies and effectiveness, as noted above.
Financial Considerations
o She has provided you with the investment amount to provide financial support for the
investment
Risks
o She has asked you to look at primarily risks associated with the overall initiative, not
necessarily those focused on the training aspect of the project.
Timeline
o Based on her conversations with Mr. Jourdain, she believes the project execution could
begin within 60 - 90 days, depending on the path chosen for moving forward
Recommendations and Next Steps
o She has asked you to consider all the relevant data you collect and put into the business
case, and then provide a succinctly stated and well-supported recommendation and
concrete next steps if the proposal is accepted
General Case Considerations for Business Case:
o It is expected that you will need to make reasonable assumptions in completing the
business case, so rely on the case study as guide. This is similar to how projects are
conceived in the real world. We have a basic set of factors, and then we must make
reasonable assumptions as we progress forward.
Part 2: Project Charter and Stakeholder Analysis Instructions
As noted above, Acme Company, your employer, has made delivering projects more efficiently and
effectively one of its strategic priorities over the past couple of years. Prior to a couple of years ago, they
talked about projects, but no one had the project manager title; they were accountants, IT developers,
product managers, research managers, and a range of other functionally oriented titles, but they realized
that most of the company’s work was really project work, and they have sought to become a more
project-oriented organization by assigning project managers to lead these projects.
Realizing the importance of becoming a more mature project oriented organization, your CEO, Ms. Jones,
charged you with creating a business case for whether or not your company should invest in the expertise
and training necessary to adopt a more mature project management approach. Your company’s Board of
Directors has approved the project, and you are now charged by Ms. Jones with creating a Project Charter
and initial Stakeholder Analysis.
Upon doing a little research about current project management practices in the organization, you discover
that your company already has two really standout project professionals: Stephanie Smith and Marcus
Lopez. Ms. Smith recently completed a Master’s degree in Project Management, which greatly enhanced
her ability to perform, while Mr. Lopez, who only joined the company last year, is veteran project
manager who is certified as a project management professional (PMP®). Individually, they have
outperformed their counterparts in the organization by an average of 8 percent in terms of efficiency and
use of resources.
Initially, you thought the best route would be to hire Mr. Jourdain to perform the training and
implementation consulting, but now you think you may have the internal talent that could be used. So in
chartering the project, you want to perform an analysis and offer Ms. Jones two options for moving
forward with the training and implementation project.
Present Situation:
As the Board of Directors has approved the business case and you have a project management model that
your company will adopt, your focus will be on chartering a training program to facilitate the adoption.
Based on a conversation with the CEO, you will provide one day of classroom training each week for
eight weeks, which is a total of eight days of classroom instruction. You will use space and resources
(technology, classroom space, etc.), so there is direct cost associated with the location where the training
will be held.2
This is the charge of your project: to implement a training program for project based workers (initially 40
persons) within your organization at a direct cost of $40,000 for the training portion of the project. This is
the section that you are currently chartering.
Your first order of business is to develop the project charter and within the proposal provide a
recommendation about whether to use internal or external resources for training. You have two options to
consider: an internal or an outsourced trainer. Here are the details for each option:
Internal Option:
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Assume a cost of $500 per day for use of the training space. Additionally, assume a cost of $500 per day for food
and classroom supplies for each day of training.
Stephanie and Marcus would act as co-instructors, as they have the most project management
experience. During the eight weeks that the class is running, they will be devoting no more than
50% of their time teaching the class, preparing for instruction, as well as, providing coaching to
various colleagues. In order to be prepared to deliver the instruction, they will need to spend one
week at a ‘training the trainer’ seminar.3 Please review footnote 2 – 3 for additional information
on costing.
Outsource Option:
Alternatively, your team can recommend to hire an external trainer who is very experienced with
the PM model that your company is adopting. As part of your contract with her, she will provide
the one day a week classroom instruction for the eight weeks, and she will also provide an
additional day of coaching each week on-site. Her fee is priced at $17,500. Even though you
would be using an external trainer, Marcus and Stephanie would still need to devote roughly 25%
of their time over the eight weeks to support the trainer and the project, so there is also cost
associated with them in this model, as well, which you will need to account for (see footnote 2-3
for information needed to calculate this cost).
These are the two options for you to consider and provide a recommendation on which option to select.
Regardless of the option selected, you have been charged with having the training completed prior to the
end of this year, so that the new processes can have a fresh implementation in the coming year.
Part 3: Case Consideration for Project Charter:
In considering a case such as this, there are the obvious quantitative considerations that are provided
within the information above, and you will need to perform an analysis of those options and justify your
recommendation. But there are also qualitative factors to consider, such as whether or not there are
intrinsic benefits to developing in-house talent to using outside talent, or whether or not the benefits
provided by someone with an outside perspective and a broader understanding of the industry is more
important than cost alone.
As with any case, not all questions are directly answered, which is very similar to the realities of real
world projects, therefore, you will need to use good judgment and make reasonable assumptions, reading
between the lines to find those logical connections.
Finally, a special note about the stakeholder analysis. You will complete the stakeholder register taking
into account the stakeholders listed throughout the entirety of this case study document (project business
case and project charter). You will have to make certain assumptions to complete this, as you will not
have complete information for all stakeholders, and this is often true for projects at this point. You would
continue to refine and sharpen this analysis throughout the project, so make reasonable assumptions when
you don’t have complete information.
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In order to compare the internal and external scenarios to develop your business case, you need to compare the cost
of each scenario. Use the following information to prepare the cost estimate for the internal option. Assume that
Stephanie and Marcus each earn $125,000 per year in total compensation. This is a weekly cost of approx. $2,400
each. Assume that the combined cost for them to attend the ‘training the trainer’ seminar is $6,500, which includes
the seminar fee and all associated travel cost. Remember to assume that 50% of their time is allocated to this project
for the eight weeks they are teaching the class and that they are gone for a full week while attending the ‘training the
trainer’ seminar.
Business Case1
Project Name: _________________________________
1.0 Background & Business Problem
This section should briefly describe how the current situation has been arrived at and, and it should briefly describe the business
problem that the proposed project will address. This section should not describe how the problem will be addressed, but only
what the problem is.
2.0 Strategic Case
All projects should support the organization’s strategy and strategic plans in order to add value and maintain executive and
organizational support. This section provides an overview of the organizational strategic plans that are related to the project.
Essentially, where does this project fit in helping the organizational achieve its goals? This section should also list the business
goals and objectives which are supported by the project and how the project will address them.
3.0 Project Overview
This section describes high-level information about the project to include a description (high level scope), assumptions, and
constraints.
4.0 Expected Benefits
This section should describe the anticipated outcome if the proposed project or initiative is implemented. It should include how
the project will benefit the business and describe what the end state of the project should be.
5.0 Financial Considerations
Many consider this one of the most important parts of a business case as it is often the costs or savings a project yields which
win final approval to go forward. It is important to quantify the financial benefits of the project as much as possible in the
business case. This is usually done in the form of a cost benefit analysis. The purpose of this is to illustrate the costs of the
project and compare them with the benefits and savings to determine if the project is worth pursuing.
6.0 Risks
What the risks that you anticipate based on your analysis of the proposed solutions (i.e. project)? These are not the specific risks
associated with your project’s performance, such as the project being delivered late, but are risks associated with whether or not
the proposed solution will actually address the business problem you have identified above.
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This document is based on an expanded business case template provided by www.projectmanagementdocs.com.
7.0 Timeline
What is the high level timeline from this point forward? For instance, if the next step is to charter a project, how long until the
results of the project are realized and the business problem is resolved?
8.0 Recommendations and Next Steps
This section summarizes the recommendation(s) of the person(s) responsible for preparing the business case. How do you
recommend that the organization proceed based on your analysis? As for next steps, should the project be chartered, or should a
different outcome result from the analysis?
*Be sure to remove the instructions before you submit your completed statement.
Project Charter2
Project Name: _________________________________
1.0 Project Purpose
In this section, we include the rationale or purpose of the project. This should be tied to a business case / justification for why
this project is being selected. This section should include a clear linkage to the organization’s strategic goals or initiatives.
2.0 Project Objectives
In this section, state what specific objectives, the project should accomplish. These should be measurable objectives.
3.0 Project Scope
Here you want to describe what is required in order for the project to be approved. Most often, this will relate to the scope of
the project. For instance, the project must create ‘these deliverables’ in order to be approved.
4.0 Summary Milestone Schedule
List the primary milestones for the project.
5.0 Summary Budget
In this section, you want to provide a summary budget. It is best to provide a high-level budget for the major deliverables. To
complete this, you will need to do a bit of high level / top down research.
6.0 Approval Requirements
What constitutes success, who decides it, who signs off?
7.0 Assigned Project Manager
You will want to name the project manager, discuss level of responsibility and authority
8.0 Charter Approval
Name and title and signature of person responsible for authorizing project charter, who will act as executive sponsor of the
project.
*Be sure to remove the instructions before you submit your completed statement.
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This document is based on the Elements of the Project Charter Table in The PMBOK® Guide.
Preliminary Stakeholder Analysis
Stakeholder
Position/Role
Type of
Stakeholder
Stakeholder
Expectation(s)
Stakeholder
Interest(s)
Influence
on Project
Result
Stakeholder management strategies
Position in the
organization or
role in project
Internal or
External
High level needs
or expectations
for the project
and/or product
High/
Med/Low
Supporter/O
pposed/
Neutral
Strategies and tactics to maximize positive
stakeholder influence and minimize or
neutralize negative stakeholder influence.
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