What is a project of justification

What is a project of justification?
Although some projects are completed by direct order, most of the projects we are involved with a justification. The most credible justification exists if the reported benefits are of doing the project greater than the costs for doing the project. It is important to understand that there are too many ways to describe the cost-benefit ratio for a project to justify it. With monetary value is only an approach that should not be forced on all projects. Many of you have the problem of producing a justification for top management companies conduct corporate training face for your department personnel, or the importance of introducing a new product line for your business production cycle. These are good examples of in-house projects that were justified to enter with more qualitative results, such as increasing motivation and productivity, the ability to re-growing markets and other results if monetary figures difficult to develop or could predict. In this case, a thing that is not fake data by developing characters who have no real value should be done. Instead, develop specific quality results with measurable indicators to monitor and if this results in some economic opportunity for your business or problem the project intends to attack.

The fact that it important to remember that we describe a problem or an opportunity and not a solution. In other words, we can justify a project as a description of what will happen if the project is implemented and what will happen if the project is declared not carried out.

For example, our company decides to decorate his office space with modern art. This project could cost $ 100,000. The advantage of the company, adding to receive the is quite palpable, but it is reasonable to say that customers are impressed by our lobby to come, we hope, through the work of art and could still cheaper to buy something from us will be discarded. If we try to justify our project in this way, our boss will do well, there are cheaper ways to impress the customers.

There is one other aspect: If our lobby is a complete disgrace, we can impress some of our customers unfavorable. There is probably evidence that we indeed lost some business. This can serve as a good first justification for a project even without the numbers to our potential gains.

Of course, justifications with intangible assets is usually difficult to get approved, especially if you are project resources in short supply and require more talent on the part of the project leader in developing truly convincing suffer descriptions of the disadvantage of the company if the project is not running,.

On the other hand, there are many cases where the monetary benefits for the project are actually measured. In this case it is obviously important that this justification be made for the project. In most companies there is no shortage of good projects, it is usually just not enough money or resources to do them. Monetary reasons we can possible projects with the best projects at the top and the worst ones at the lower rank. The company can then go down the list, do as many projects as possible to the company funds.

Let us digress a bit. A discussion about where their company is in cost order. Of course, if a customer comes to us and offers to pay us to do a project, the benefits for us is the amount of money customers pay us on the project and certain intangible assets, such as experience, so We work more as want to come in, future. Even if the customer pays, we do not get all the money is done until all the work. The company doing the project must provide the necessary resources to do at least part of the project. Where does the company get the money?

The money for the projects are probably not from the company cash. The company probably borrow the money from a bank or sell something to investors. All the money received for projects associated costs. This is the money the company has to pay to the lenders and investors for the use of their money.

Another important factor is involved here, if the money is spent on the project, and received. Since we pay for the use of money, the longer we use it, the more it costs us. If the customer has to be agreed on in advance or progress payments, we need to borrow less money for shorter periods of time, and money is saved on the project. The justification for the project should take these things into consideration.

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What is a project of justification