Construction management: business justification

Revision as of 09:49, 12 December 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 wish to appoint independent client advisers.

The tasks described below are based on the route taken by a project following a construction management procurement route where a construction manager is appointed early in the project as a consultant, and then the construction manager takes on a management role for the construction of the project. Within this project plan the construction manager is appointed on completion of concept design. Earlier or later appointment will result in some 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 are available on the Designing Buildings Wiki 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 'submit comment' link at the bottom of the page.

Construction management: business justification

A. Defining the business need.

1. The client identifies a business need which might result in a building project.
2. The client appoints a preliminary internal team to assess whether there is justification for the project.
3. 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. Preparing a preliminary business case.

1. Very experienced clients may have in-house expertise allowing them to make appointments, and to prepare a preliminary business case and strategic brief. However, many clients will not have the full range of skills required and may wish to appoint independent client advisers to assist them. These advisers are separate from the consultant team, which will undertake the actual design of the project. Go to the work stage: Construction management: appointment.
2. The client explores high level options for meeting the requirements set out in the statement of need. This may include an assessment of comparable projects.
3. The client undertakes risk assessment and value management exercises.
4. The client prepares a preliminary business case, which is a first attempt to justify the investment required by the potential project and should include a management structure, draft legal agreements and funding options.
   

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

1. The client assesses the preliminary business case and decides whether it merits investigating in more detail and whether procedures should be established for appointing a consultant team.

D. Establishing an organisational structure.

NB The organisational structure for the project will have been defined and approved in the client's preliminary business case.

1. The client appoints a project director.
2. The client appoints a 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 independent client advisers.
4. The client appoints champions (perhaps heads of departments) to take responsibility for the quality of the project.
5. The client appoints user panels to bring experience to briefing and design workshops.
6. The client identifies project stakeholders to be consulted during the early stages of the project.

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

1. The client assesses the nature of the the consultant team that will be required to carry out feasibility studies and options appraisals, prepare a project brief and design the development.
2. 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. This will include the identification of potential sites 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 complicated process and may require the appointment of independent client advisers (such as surveyors). Go to the work stage: Construction management: appointment .
3. The client undertakes risk assessment and value management exercises.
4. The client sets an initial budget for the project.
5. The client considers funding options for the project.
6. The client revises the preliminary business case and strategic brief.
   

F. Assessing whether there is sufficient justification to progress to the next stage.

1. The client considers and comments on the 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, and options assessments carried out.

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