The Prepare Outline Business Case activity is a crucial element within the Starting Up a Project (SU) process in PRINCE2 7. This activity establishes the initial justification for undertaking the project and provides the foundation for future investment decisions.
During this activity, the Executi…The Prepare Outline Business Case activity is a crucial element within the Starting Up a Project (SU) process in PRINCE2 7. This activity establishes the initial justification for undertaking the project and provides the foundation for future investment decisions.
During this activity, the Executive works with the Project Manager to develop a preliminary business case that captures the essential information needed to determine whether the project is viable and worth pursuing. The outline business case is not a fully detailed document at this stage but contains sufficient information to support the decision to initiate the project.
The outline business case typically includes several key components. First, it identifies the reasons why the project is needed, explaining the problem or opportunity being addressed. Second, it provides initial estimates of costs, including development and operational expenses. Third, it outlines the expected benefits the organization will gain from completing the project successfully. Fourth, it highlights the major risks that could affect the project's viability. Fifth, it includes a preliminary timeline showing when benefits might be realized.
The information for creating the outline business case comes from various sources, including the project mandate, lessons learned from previous similar projects, and input from stakeholders who understand the business context. The Executive owns the business case throughout the project lifecycle and remains accountable for ensuring the project delivers value.
This activity is essential because it establishes whether there is sufficient justification to proceed with the project. If the outline business case demonstrates inadequate returns or unacceptable risks, the project can be stopped early before significant resources are consumed. The outline business case evolves into a detailed business case during the Initiating a Project process, where it receives further refinement and validation before the project fully commences.
Prepare Outline Business Case - Complete Guide
What is the Prepare Outline Business Case Activity?
Prepare Outline Business Case is a key activity within the Starting Up a Project process in PRINCE2. This activity involves creating an initial version of the Business Case that captures the justification for undertaking the project. The outline Business Case provides enough information to determine whether the project is viable and worth initiating.
Why is it Important?
The Prepare Outline Business Case activity is crucial for several reasons:
• Early Justification: It establishes whether there is a valid reason to proceed with the project before significant resources are committed • Investment Decision: It provides the Executive and Corporate/Programme Management with sufficient information to decide if the project should be initiated • Foundation for Planning: It sets the baseline against which the project's continued viability will be assessed throughout its lifecycle • Alignment with Strategy: It ensures the project aligns with organizational objectives and delivers genuine value • Risk Awareness: It identifies major risks early, allowing informed decision-making
How Does it Work?
The Prepare Outline Business Case activity follows a structured approach:
1. Responsibility: The Executive is responsible for this activity, though they may delegate the work to others while retaining accountability.
2. Inputs Required: • Project mandate (containing initial project idea and context) • Lessons from previous similar projects • Information from the appointed Project Manager
3. Content of the Outline Business Case: • Reasons: Why the project is needed • Options: Business options considered (including do nothing) • Expected Benefits: Measurable improvements resulting from project outcomes • Expected Dis-benefits: Negative consequences that must be accepted • Timescale: When benefits will be realized • Costs: Summary of project costs and ongoing operational costs • Major Risks: Key threats and opportunities • Investment Appraisal: Initial assessment of value for money
4. Level of Detail: The outline Business Case contains less detail than the full Business Case developed later. It should be sufficient to support the decision to initiate the project but will be refined during the Initiation Stage.
5. Output: The completed Outline Business Case becomes part of the Project Brief and is used to inform the decision at the end of Starting Up a Project.
Key Points to Remember
• The Executive owns the Business Case throughout the project • The outline version is preliminary and will be developed further during initiation • At least three business options should be considered (do nothing, do minimum, do something) • Benefits should be measurable wherever possible • The Business Case must remain valid for the project to continue
Exam Tips: Answering Questions on Prepare Outline Business Case
Tip 1: Remember that the Executive is responsible for preparing the outline Business Case, not the Project Manager or Business Analyst. This is frequently tested.
Tip 2: Understand the difference between the outline Business Case (created in Starting Up a Project) and the detailed Business Case (created in Initiating a Project). Questions often test whether you know when each is produced.
Tip 3: Know that the outline Business Case becomes part of the Project Brief, which is then used to create the detailed Business Case during initiation.
Tip 4: Be clear on the minimum business options that should be considered: do nothing, do minimum, and do something. Exam questions may ask about option analysis.
Tip 5: Remember that dis-benefits are accepted consequences, not risks. Questions may try to confuse these concepts.
Tip 6: When faced with scenario questions, look for clues about timing. If the question mentions Starting Up a Project or before initiation, the answer likely involves the outline Business Case.
Tip 7: The purpose is to provide enough justification to proceed to initiation, not to provide complete project justification. This distinction is important for understanding the appropriate level of detail.