Business case    

PRINCE2 online
  • Business Case
  • Development
  • Documents
  • Relation with processes

You must know and understand:

  • Content of the Business Case and the Benefits Review Plan
  • Responsibilities
  • Business Case use
  • Business Case development
The purpose of the Business Case theme is to establish mechanisms to judge whether the project is (and remains) desirable, viable and achievable as a means to support decision making in its (continued) investment.

The Business Case provides an understanding of the way the project will lead to the intended benefits. For a good understanding of the Business Case we should differentiate between:

  • Output
    The project's tangible and intangible products ("deliverables").
  • Outcome
    The result of the changes that are caused by the use of the products.
  • Benefit
    A measurable improvement resulting from an outcome, that is regarded as benificial by one or more of the stakeholders.

The Business Case is usually recorded in a document. While every organisation can use it's own standard here, a Business Case should hold the information given in the template proposed by PRINCE2.

Confirm the Benefits
The reason to undertake a project is the expectation of benefits. Therefore PRINCE2 urges to establish realized benefits as soon as possible. At the end of each stage the Project Manager should indicate which benefits have been realized. Operational benefit realization is a Senior User responsibility, while assuring the realisation is a Business Executive responsibility.

After project closurethe project organisation will be disbanded and therefore PRINCE2 advises to record in a Benefits Review Plan the reviews that will take place after the project to measure the actual benefits realized. The Benefits Review Plan is created in the process Initiating a Project.

The result of a training PRINCE2 is a delegate that has passed the exam. The output from the training therefore is "A trained and certified employee". This leads to an improved performance for this employee in her role as a project manager. This is an outcome. This outcome leads to higher customer satisfaction regarding project control. There is no disagreement on settlement of the bills, which leads to an improved cashflow of the supplier in the project. This is a benefit!
Developing the Business Case
The Business Executive is responsible for the Business Case (which of course does not mean he has to do the actual writing). An outline Business Case can be developed before the start of the project in the proces Starting up a Project, starting from the project mandate. This outline Business Case will be an input to the first decision of the Project Board in the process Directing a Project.

Updating the Business Case

The Project Manager should investigate the Business Case and if necessary perform an update:

  • As part of risk assessment when dealing with issues and risks;
  • At the end of every stage to determine if some part of the Business Case (e.g. estimated time or cost) should be updated;
  • During the last stage to examine how the project has performed against expectations and to see what the probability is of the outcomes leading to benefits.
Maintaining and Reviewing the Business Case
The Project Board will review the Business Case on the following occasions during the project:

  1. After the process Starting up a Project (Authorize initiation);
  2. After the process Initiating a Project (Authorize the project);
  3. When reviewing a Stage- or Exception Plan (Authorize a Stage or Exception Plan);
  4. When closing the project (Authorize project closure).
business case
Two documents are relevant for the Business Case:

These are closely related: the Business Case states in advance which benefits are to be expected, the Benefits Review Plan states when and how reviews will be conducted to verify that benefits have actually been achieved.

Most of the time benefits will be measured after project closure when the project's products have been used operationally. However, when benefits may be achieved during the project, benefits measurement should commence during the project.

With Directing a Project (DP)

  • After SU the outline Business Case is reviewed;
  • After IP wordt the existence of a viable Business Case is investigated;
  • At stage boundaries the viability of the Business Case is examined;
  • When investigating exceptions any effects on the Business Case are examined.

With Controlling a Stage (CS)

  • When investigating issues and risks effects on the Business Case are taken into account.

With Managing a Stage Boundary (SB)

  • At the end of each stage the Business Case is examined to see if parts of it (e.g. costs, timing) should be updated.

With Closing a Poject (CP)

  • At the end of the last stage to investigate how well the project performed angainst expectations and to determine the probability of the outcomes leading to benefits.