Construction management: business justification

Revision as of 17:28, 15 November 2011

The business justification stage is the first stage to take place once a business need has been identified which might result in a building project. This stage involves assessing whether there is justification for the project, preparing a preliminary business case and creating an organisational structure for the project. The business justification stage takes place before the appointment of the consultant team, so the client may find it desirable to appoint independent client advisers. The OGC gateway procedure for public projects splits this stage into two parts: strategic assessment and business justification. We have combined them into one stage: business justification, to avoid a proliferation of stages and to avoid confusion with the 'Appraisal' stage within the RIBA Plan of Work, which might also be considered to be a form of strategic assessment.

The tasks described below are based on the route taken by project following a construction management procurement route where a construction manager is appointed early in the project as a consultant, and then takes on a management role for the construction of the project. We recommend that the construction manager is appointed on completion of concept design. Earlier or later appointment might result in certain activities being re-allocated between the consultant team and the construction manager (for example the role of cost consultant).

Project plans for other procurement routes area available on the home page.

NB This article is locked in order to preserve the logic and continuity of the full work plan. If you would like to propose changes or additions, click on the comment link at the bottom of the page.

Construction management: business justification

A. Confirming that the corporate strategy mandates a new project and considering options.

1. Having identified a business need which might result in a building project, the client identifies a preliminary internal team to assess whether there is justification for the project.
2. The client prepares a statement of need, which is a first attempt to describe the possible requirements of the project. These requirements may or may not result in the need for a project, and even if a project is required, it will not necessarily require a new building.

B. Selecting and appointing independent client advisers if required.

1. Very experienced clients, such as private sector developers, may have in-house expertise allowing them to make appointments, and prepare a preliminary business case, strategic brief and project brief. However, many clients will not have the full range of skills required and may wish to appoint independent client advisers. These advisers are separate from the consultant team, which will undertake the actual design of the project, but they may carry out early studies such as feasibility studies and options appraisals.
2. If appointments are necessary, go to the work stage: Construction managment: appointment.

C. Assessing whether there is sufficient justification for the project.

1. The client should prepare a preliminary business case, which is a first attempt to justify the investment required by the potential project. It should include a management structure, draft legal agreements and funding options.
2. The client should assess the preliminary business case and decide whether it merits investigating in more detail and whether procedures should be established for selecting a consultant team.

D. Establishing an organisational structure.

1. The management structure for the project will have been defined and approved in the client's preliminary business case.
2. The client appoints a project director and project board to advise the project director on technical and user matters.
3. The client appoints a project sponsor responsible for day to day liaisons with the consultant team and /or independent client advisers.
4. The client identifies project stakeholders to be consulted during the early stages of the project.
5. The client appoints champions (perhaps heads of departments) to take responsibility for the quality of the project.
6. The client appoints user panels to bring experience to briefing and design workshops.

F. Setting out the client's objectives and needs in sufficient detail to appoint a consultant team.

1. The client develops the statement of need into an initial strategic brief which provides sufficient information about the project to allow the appointment of a consultant team (or independent client advisers in the public sector). This will include the identification of potential site(s) for the development. It should be noted that for particularly large projects, an environmental impact assessment may be required by the local planning authority and that this may include an assessment of alternative sites for the development. It is important to consider this when assessing potential sites. Identifying possible sites, and considering their impacts (such as the possibility of moving staff) can be a very complicated process and may require the appointment of independent client advisers (such as surveyors).

G. Selecting a consultant team.

1. The client assesses the nature of the consultant team which will be required (or independent client advisers in the public sector). Go to to the work stage: Construction management: appointment.

H. Developing and approving a preliminary business case and agreeing that there is justification to progress to next stage.

1. The client develops the preliminary business case and strategic brief with the benefit of responses from the consultant team during the appointment process along with comments from champions and user panels.
2. The client considers and comments on the developed preliminary business case and strategic brief and decides whether to proceed to the next stage where the consultant team will be appointed, feasibility studies undertaken, options reviews carried out and a strategic brief prepared.

Return to work stage: Construction management: outline work plan.
Next work stage: Construction management: feasibility studies.