Why Problems and Opportunities are NOT the same for projects

Jun 21, 2018
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Most professionals in project management understand that in order to successfully approach a project, the problem statement must be clearly defined. The problem is that many practitioners treat problems and opportunities interchangeably when developing Business Cases and Project Charters. Understanding the difference between problems and opportunities is critical to selecting the optimal approach any project. Below are some key differences that will you help you determine if your next project is aiming to solve a problem or to take advantage of an opportunity.

Problem vs. Opportunity

In relation to Project Management, a problem can be defined as an issue that is preventing the organization from achieving business goals and objectives. Problem-focused projects must first determine the cause of the problem then determine how to solve it. Opportunities, on the other hand, are initiatives that will assist the organization in reaching business goals and objectives if implemented appropriately.

Reactive vs. Proactive

Problem-focused initiatives are reacting to an issue that has already been identified by the organization or a business unit. Here the project team must execute a number of tasks that will uncover the cause of the issue and prevent the issue from happening in the near future. Business Analysts may execute Root Cause Analysis Techniques such as a Fishbone diagram or The Five Whys.

Initiatives that are opportunity-centered are proactively seeking to capitalize on an event that may be valuable to the organization in the long-term future. Opportunity statements are generally more difficult to develop. In most cases, opportunities are assumed, while for problem statements, the issue is usually recognized before the project is initiated. To explore opportunities, business analysts may use techniques such as User Stories, Bench Marking, Market Analysis or Balance Scorecard in order to determine the future benefit to the organization. These techniques can be used to identify problems as well, however, they are particularly helpful in identifying opportunities. 

Tactical vs. Strategic

Tactical projects are those that deal with the current state and benefits that can be gained in the near future. Middle management generally initiates these projects or an operational issue that has been escalated can also be a catalyst. Strategic Initiatives, on the other hand, focus on a broader perspective and the long-term future. Executive leadership often initiates strategic projects as they are often associated with higher revenues or increased profitability for the organization.

Problem statements are often warranted in tactical projects. Once the cause of the problem is identified and resolved, benefits can be seen quickly or short-term. Opportunity statements, on the contrary, are best suited for strategic projects as the goals and objects are likely to be realized in the long term and at a greater scale.

Final Thoughts

In closing, understanding the key differences between problems and opportunities will help you develop more compelling and effective business cases and project charters. Not only will it increase the likelihood that your project gets approved but it will also set a clearer path for the business analysis tasks that will need to be executed and the techniques are most appropriate. Hopefully, this makes your project management and business analysis initiatives more successful!!


Author: Michael White, Business Analyst

Michael White is a Business Analyst at a leading financial institution. He has an extensive background in business analysis, project management, coaching, and development. He has driven innovation at some of the top financial lenders in the nation. Michael has also developed and spearheaded an award-winning client service platform and currently holds a Doctor of Business Administration .





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