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Planning a new project? Don’t leave it to chance to create value from your investment

The decision to embark on a project is normally based on the rational premise that it will generate some kind of benefit that justifies the cost, disruption and risk involved. Typically, approval is considered on the basis of a business case that sets out a schedule of expected costs and the flow of benefits that will materialize for a given appetite for risk.

However, while the process for estimating costs is generally well understood and easily scrutinized, articulation and measurement of benefits can be more elusive. The justification for proposing a project is often based on an inadequate understanding of potential benefits, what they are, how to measure them and how, in practical terms, they will be realized, when and by whom. Also, the investment decision can sometimes be distorted by what has been called "delusional optimism”, whereby potential benefits are overstated and costs underestimated to make the proposition more attractive. Further, and contrary to what some believers in the power of the project management process might suggest, benefits and value don’t automatically flow from the delivery of projects. You have to work hard at it.

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