Project Initiation: A Critical Look- A Review

The question has come up, probably countless times, of just how closely companies follow PMI’s PMBOK guidelines on initiation. Mark Mullaly responds that not many do. His belief; that objective, reasoned, analytical and rational thought processes in choosing projects that meet a business’s goals or fit its strategy were the furthest thing from the truth. Truth be known, Mullaly felt that while this was widely known and practiced, many Project Managers would rather ignore what they know to be a critical topic in the industry.

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Mullaly’s belief was that for many companies the decision to choose one project over another had little to do with any rational, reasoned, or analytical thought. The decision had more to do with politics, pure and simple. Someone within the company, with plenty of clout and power, decided they wanted their pet project done. While there are some companies that follow a formal analysis of the merits of a proposed project and how it fits into the scheme of things, there just aren’t that many. And those that do follow some formal process don’t do a really good job of it.

The Process
In Mullaly’s article he explains what the initiation process for all projects is supposed to be, it is where all projects start. Someone comes up with an idea. That idea is analyzed determining what is the scope of the idea, what will need to be done, how long it will take, and roughly what will be the cost. According to the PMBOK Guide, the initial scope is defined, initial finances are committed, business case is written, stakeholders are identified, the Project Manager is selected, the charter is written and when approved the project becomes official (PMI, 2013).

The Business Case
One of the key deliverables is the business case or project proposal (Verzuh, 2012), a document that Mullaly feels is inappropriate to use to justify accepting an idea as a project (Mullaly, 2011). He feels that the formal usage of a business case is to justify the project in purely financial terms. We use tools such as NPV (Net present value), DCF (Discounted Cash Flow), IRR (Internal Rate of Return) and ROI (Return on Investment). Basically, you are trying to put a dollar value on costs and benefits. He feels it is impossible to put a dollar figure on an intangible such as security. Mullaly felt that any financial number measuring benefits, in a business case, is an estimation based upon an approximation derived from an inference; basically, we used the swag method or just simply guessed (Mullaly, 2011).

So Mullaly suggests the best way to deal with hazarding a guess as to the cost of and the benefits derived from a proposed idea is through communicating. He feels we need to be open and honest about the kind of project we’re doing. We need to be open and honest about whether or not the financial projections justify moving forward with the project. The assumptions being made to create the financial projections need to be clearly defined and every one of the stakeholders needs to agree to those assumptions. All this effort is just asking whether a project is adequately worthwhile to examine further.

Business Strategy
As we have read in Verzuh’s book, initiation is highly important to business strategy. During this stage of the process the business should be deciding if an idea fits into the business strategy or meets the goals of this strategy. The business is supposed to justify the project because they have determined that it fits into the business strategy and meets its goals. The business further decides based on its ability to meet the cost and resource demands the project will put on the business. If it doesn’t, it should be denied (Verzuh, 2012).

But I have to agree with Mullaly, that while the optimal is to base the decisions to go/no go on whether the cost of the idea and the resources required bringing the idea to fruition are worth it to the company, many times I have seen where none of those criteria are used. There are times where an idea became a project, and then some other project that was approved by someone in upper management, which no one else knew anything about, started to pull resources and money from this project that had gone through the so-called approval process.

Initiation Process
While the process I described above is the optimal, it would be nice if we actually did it this way. I never seen it done that way at any of the companies I have worked for, although two have come close. Very few companies I have worked for actually have a process in place and those companies that do have a process usually follow a hybrid in-house system. Where I currently work we have a hybrid system. The initiation phase is called Demand Management. An idea form is submitted, a small committee of team managers review the idea form and then decide if the project merits assigning a project manager to it. The project manager is tasked with doing the initial requirements gathering from which an E0 Estimation is created and presented to the business requestor for approval.

Project Proposal
One of the problems I see is that the initiation process I described at my place of employment doesn’t take into consideration how well the idea fits into the business strategy or goals. In fact, nothing is ever mentioned. I honestly don’t think any of the managers know the company’s business strategies. Mullaly points out that one of the reasons why projects fail is because they simply don’t take the time to analyze and determine if the project fits the company strategy.

One document in particular, when properly used, can actually help to fully define the project so that an informed decision can be made. The project proposal contains the project goal, states the problem/ opportunity, offers a solution, details the costs/benefits of doing the project, shows how the project fits into the overall enterprise portfolio, defines the business requirements. It includes the scope, the risks, and a high level schedule. In a nutshell; it makes the business think the proposed project through to ensure that the business is choosing the project wisely.

In conclusion, what Mullaly and Verzuh both point out, that when used correctly, the process works. Mullaly just points out what is really common knowledge; many companies and organizations do not follow the process and the do so at their own risk. Part of a Project Managers job is to guide the team through the process and to help their company develop a process that allows them to make an informed choice that benefits the company and fits their strategic goals.

Mullaly, M. (2011, March 1). – A Critical Look at Project Initiation. Retrieved from
Project Management Institute. (2013). A guide to the project management body of knowledge (PMBOK guide), fifth edition. Newtown Square, PA: Author.
Verzuh, E. (2012). The fast forward MBA in project management, fourth edition. Hoboken, NJ: John Wiley & Sons.

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Author: Rich Garling

Successful results-driven experience in IT program/project management, focusing on collaborating with multiple businesses and IT workstreams to define detailed business process requirements into workable enterprise software solutions for retail, finance, pharmaceutical, and inventory processes. A successful proven track record in leading cross-functional international teams of project managers while managing expectations and delivering projects of greater than $10M within stakeholder expectations. Provided an in-depth knowledge of SDLC using Agile and Waterfall project management methodologies (Scrum Master (SMC)), MS IT Management/Project Management (AMU)), and a talent for developing business requirements delivering workable technology solutions. Rich holds a Bachelor of Science in Political Science from Northern Illinois University and a Master of Science in Information Technology/Project Management from American Military University. He is currently a Project Manager III for Bradford Hammacher Group in Niles, IL/