Tools and tips to analyze context of a project

A business case contains all the information necessary to make a strategic business decision. The information that this one provides must meet three key points:

1. Truthful
2. Appropriate
3. Important

Truthful: It means that all the facts are true

Appropriate: It should be timely and accessible

Important: It is relevant to the project

A strategic business decision almost always is relating with the benefit, the risk, the cost, the scope of the project, to name a few. These are very important nowadays due to limited resources that an organization must afford. In this point is when a business case becomes relevant because this document justify decision making based on information.

Business Case Contents

A Business Case is a flexible guide that contains information about the project and the context in which it will be developed. This document can take many forms, for instance:

• Industry Analysis
• Mergers and acquisitions
• ROI (Return On Investment)
• Developing a new product
• Strategic
• Investment
• Values
• Research
• Efficiency
• Compliance
• Entering a new market

It is very important take notice of external context in which the project is developing, and on this occasion we are going to see some tools. First we need to define context. The context is all the facts, opinions relating to the project or system that we are studied, in other words it is the environment where the project will be develop and work. To analyze the external context there are four powerful tools: PESTLE, Fundamental Analysis, Technical Analysis and Thinking visionary.

PESTLE analysis

The first tool that I want to talk is about PESTLE. It is a framework used to evaluate the external environment, this one considers following Political, Economic, Social, Technological, Environmental and Legal factors. It is specifically studied macro facts to explain the relationship with the project and their consequences. Let’s see all the points:

• Political Facts: They are all the laws that can influence the project.
• Economics factors: They all the external factors relating with economic, some examples are: economic growth, interest rates, exchange rates, inflation, and so on.
• Social factors: It is everything relating to the shared belief and attitudes of the population.
• Technological factors: Technology changes very fast so it is important to be updated, because a new tool might increase the efficiency of the business
• Legal Factors: These one are something that customers and employees demand consistently
• Environmental factors: These factors are relating to increasing scarcity of raw materials, polluting targets, in general to an environment for sustaining socio-economic

Fundamental Analysis

Sometimes abbreviated as “FA”. It is a method of measuring a security of intrinsic values through evaluating financial indications. The main goal is compare some data of the business with other indicators to evaluate strategies.

The fundamental analysis can be divided into two groups analyze Top-down and analyze bottom-up. Top-down is an analyze where we study a macro system, after that we divide itself into small parts. On the other hand Bottom-up is the inverse, we study a particular case and look how it affects environment where it is developing.

Technical Analysis

Is a method which we can use to find out trends through statistical analysis.

Thinking visionary

Thinking visionary is more relating to a habit. It is similar to Technical analysis, except this study is a qualitative analysis. In other words, It is the habit to think about the future in a creative way and anticipate challenges posed by the environment.

In the end, we have several tools to understand the environment in which the project will be develop, in this way we are able to reduce risk of failure. This is very important when we are investing important amount of resources in the venture. There are more tools and methodologies that it can be used, however the tools mentioned above, are a good starting point.