Within the PRINCE2 Business Case Theme, understanding the different types of business justification is fundamental to establishing and maintaining project viability. PRINCE2 recognizes that business justification can take various forms depending on the nature of the project and organizational conte…Within the PRINCE2 Business Case Theme, understanding the different types of business justification is fundamental to establishing and maintaining project viability. PRINCE2 recognizes that business justification can take various forms depending on the nature of the project and organizational context. Compulsory projects are driven by regulatory or legal requirements, where the business justification centers on compliance and avoiding penalties rather than traditional return on investment. In contrast, non-profit projects focus on delivering benefits to beneficiaries rather than financial returns to the organization. For projects with evolving requirements, emergent business justification is appropriate, allowing the business case to develop progressively as more information becomes available. Some projects are justified based on their necessity for business continuity or as foundational components for future initiatives without immediate direct benefits. PRINCE2 also acknowledges that business justification may be driven by strategic alignment with organizational objectives, even when tangible benefits are difficult to quantify. By recognizing these different types of business justification, PRINCE2 enables organizations to apply appropriate evaluation criteria and development approaches to their business cases, rather than forcing all projects into a one-size-fits-all model of justification. This flexibility ensures that the focus remains on whether the project is desirable, viable, and achievable within its specific context, supporting more nuanced decision-making about project investment.
Types of Business Justification in PRINCE2
Understanding Types of Business Justification in PRINCE2 Foundation
Business justification is a cornerstone of the PRINCE2 methodology, serving as the foundation for making informed decisions throughout a project's lifecycle. In this guide, we'll explore the different types of business justification, their importance, and how to approach exam questions on this topic.
Why is Business Justification Important?
Business justification provides the rationale for undertaking a project. It ensures that:
• Projects are aligned with organizational objectives • Resources are allocated to initiatives that deliver value • There is continuous validation that projects remain viable • Decision-making is based on demonstrable benefits rather than subjective opinions
What are the Types of Business Justification?
In PRINCE2, business justification primarily manifests in three forms:
1. Business Case The Business Case is the primary and most formal type of business justification in PRINCE2. It documents: • The reasons for undertaking the project • The benefits, costs, and risks involved • The expected ROI (Return on Investment) • The timeframes for benefit realization
The Business Case evolves throughout the project lifecycle, starting as an outline and developing into a more detailed document as the project progresses.
2. Benefits Review Plan The Benefits Review Plan complements the Business Case by: • Defining how and when benefits will be measured • Establishing who is responsible for measuring benefits • Determining when post-project reviews will occur • Providing a framework for tracking benefit realization
3. Project Brief In the early stages of a project, the Project Brief may contain initial business justification in the form of: • A preliminary outline of the Business Case • Initial identification of expected benefits • Early cost and timeframe estimates
How Business Justification Works in PRINCE2
Business justification operates through these key principles:
Continuous Justification: The project must remain justified throughout its lifecycle.
Documented Justification: The Business Case documents the justification and is updated at key decision points.
Roles and Responsibilities: • The Executive is ultimately responsible for the Business Case • The Project Manager develops and maintains the Business Case • The Project Board approves the Business Case at stage boundaries
Decision Gates: At each stage boundary, the Business Case is reviewed to determine if the project remains viable.
Exam Tips: Answering Questions on Types of Business Justification
Recognize the Hierarchy: Understand that the Business Case is the primary document for business justification, supported by the Benefits Review Plan.
Know the Content Requirements: Be familiar with what each type of business justification should contain.
Remember Document Evolution: Recognize that the Business Case starts as an outline and is progressively developed.
Understand Ownership: Know who is responsible for creating, maintaining, and approving each document.
Connect to Themes: Link business justification to other PRINCE2 themes, especially the Business Case theme.
Focus on Key Terms: Pay attention to terms like "continued business justification" as a PRINCE2 principle.
Sample Question Approach:
When faced with a question like "Which document contains the detailed business justification for a PRINCE2 project?" 1. Eliminate options that are not related to business justification (like Risk Register) 2. Consider the level of detail required (outline vs. detailed) 3. Think about the project stage (early vs. later stages) 4. Select the Business Case as the primary document for detailed justification
Practice Identifying Document Purposes: Be able to distinguish between the purpose of the Business Case (justifying the project) vs. the Benefits Review Plan (planning benefit measurement).
By thoroughly understanding the types of business justification and their roles within PRINCE2, you'll be well-prepared to answer exam questions on this important topic.