It might seem that once a project makes it through the approval process it is ready to start. This is not the case. There is one more step that has to happen before a project can actually start. In portfolio management this is the “authorization” process. In project management it is “initiation“. On the surface it might seem that this is an extra bureaucratic step that does not add value. Actually it is a very important step to make sure that the best decisions are made based on the most current information.
Think about how project work is approved in most organizations. The major work for next year is planned in the current year so that budgets and projects are ready when the new year starts. In fact, all of the work cannot start on the first day of the new year. The work is staggered to start throughout the year. It may be up to 12 months (or longer) between the time a project is approved and when it is actually ready to begin.
It does not make sense to allow projects to start based on information that could be many months old. Therefore we have the authorize/initiate step to make sure that the project is still viable and that the organization is ready to start. There are a number of things that need to be validated before the project begins.
- Validate the Business Case. The time lag between approval and when the project is ready to start may have changed the Business Case. For instance, it is possible that a competitive opportunity has come and gone.
- Identify the stakeholders. It is important to know who the people are that have an interest in the project. These people need to be engaged and may be needed for project planning.
- Validate sponsorship. It is possible that the sponsor has changed or is no longer committed to the project. You need to validate the current sponsor of the project.
- Validate staffing. You should not start a project without staff availability. It is possible that the resources that were going to work on the project are no longer available.
- Validate budget. It is possible that budget cuts, or overruns from other projects, have resulted in a lack of funding for the project.
You can now see that there are a lot of reasons why a previously approved project may no longer make sense by the time it is ready to proceed. It is usually the case that the shorter the timeline between approval and authorization, the more likely it is that the project will in fact proceed as envisioned. If the project no longer makes sense the organization has a chance to utilize the funding on an alternate project instead – one with more clear business benefit.
Do you need help optimizing your portfolio management processes? We help organizations with portfolio management all the time. TenStep Consulting Services can help you get these processes right. Contact us to see how we can help you.