Establishing business justification is a fundamental principle in PRINCE2 7 that ensures every project has a valid reason for its existence and continued investment. The Business Case practice serves as the primary mechanism for documenting and maintaining this justification throughout the project …Establishing business justification is a fundamental principle in PRINCE2 7 that ensures every project has a valid reason for its existence and continued investment. The Business Case practice serves as the primary mechanism for documenting and maintaining this justification throughout the project lifecycle.
At its core, business justification answers the critical question: Why should this project be undertaken? This requires a clear articulation of the expected benefits, costs, risks, and timescales associated with the project. The Business Case document captures this information and serves as a reference point for decision-making.
The process begins during project initiation when an outline Business Case is developed. This initial version identifies the reasons for the project, expected benefits (both tangible and intangible), estimated costs, anticipated risks, and the expected timeframe for realising benefits. The Executive is accountable for ensuring the Business Case remains viable.
As the project progresses through stages, the Business Case is refined and updated. Each stage boundary provides an opportunity to reassess whether the project remains justified. If circumstances change significantly, such as increased costs or reduced expected benefits, the project board must evaluate whether continuation is warranted.
Key components of a robust Business Case include: reasons for undertaking the project, business options considered, expected benefits and their measurement criteria, expected dis-benefits, costs, timescales, investment appraisal, and major risks. Benefits should be measurable wherever possible to enable post-project evaluation.
The Business Case remains a living document, subject to review and update at each stage gate. This ensures that investment decisions are based on current information rather than outdated assumptions. If the Business Case can no longer be justified, the project should be closed prematurely, representing responsible governance of organisational resources.
Ultimately, establishing business justification protects organisations from investing in projects that fail to deliver value, ensuring resources are allocated to initiatives that genuinely support strategic objectives.
Establishing Business Justification in PRINCE2 Foundation v7
Why is Establishing Business Justification Important?
Establishing business justification is fundamental to PRINCE2 because it ensures that every project has a valid reason to exist. It provides the basis for decision-making throughout the project lifecycle and helps organizations avoid investing resources in projects that will not deliver value. A project that lacks business justification should not proceed, as it represents a waste of organizational resources.
What is Establishing Business Justification?
Establishing business justification is one of the key activities within the Business Case practice in PRINCE2. It involves creating and documenting the reasons why a project should be undertaken by analyzing the expected benefits, costs, risks, and timescales. The business justification must demonstrate that the project is desirable (worth doing), viable (achievable), and achievable (can be delivered).
The Business Case document captures this justification and includes: - Executive summary - Reasons for the project - Business options considered - Expected benefits and dis-benefits - Costs and timescales - Investment appraisal - Major risks
How Does It Work?
The process of establishing business justification follows these steps:
1. During Pre-project: An outline Business Case is created during the Starting up a Project process. This provides initial justification to determine whether the project is worth initiating.
2. During Initiation: The Business Case is developed in detail during the Initiating a Project process. This refined version provides comprehensive justification for proceeding.
3. Responsibility: The Executive is accountable for the Business Case, though the Project Manager typically assembles it with input from various stakeholders.
4. Assessment: The Project Board reviews the Business Case at key decision points (stage boundaries) to confirm continued justification.
How to Answer Exam Questions on Establishing Business Justification
When facing exam questions on this topic, focus on these key concepts:
- The Business Case is created in outline form during Starting up a Project - The detailed Business Case is developed during Initiating a Project - The Executive is responsible for the Business Case - Business justification must be maintained throughout the project - Projects should be stopped if justification no longer exists
Exam Tips: Answering Questions on Establishing Business Justification
1. Remember the timing: Outline Business Case comes first (pre-project), detailed Business Case comes during initiation.
2. Know the ownership: The Executive owns the Business Case, not the Project Manager or Project Board as a whole.
3. Understand continuous validation: Business justification is not a one-time activity; it must be verified at each stage boundary and at project closure.
4. Link to decision-making: Questions may ask about when projects should be stopped - the answer relates to loss of business justification.
5. Focus on the three criteria: Remember that projects must be desirable, viable, and achievable - questions often test understanding of these terms.
6. Read questions carefully: Distinguish between who creates the Business Case (Project Manager assembles it) and who is accountable for it (Executive).
7. Consider the benefits: Benefits realization often extends beyond project closure, which is why benefit reviews may occur after the project ends.