Business Case
The Business Case is a fundamental concept in PRINCE2 methodology, directly supporting the principle of 'Continued Business Justification'. It represents the documented justification for undertaking a project, based on estimated costs, risks, benefits, and timescales. The Business Case is first developed at the beginning of the project during the Starting Up a Project (SU) process and is refined during the Initiating a Project (IP) process. What distinguishes PRINCE2 is that the Business Case is continuously updated throughout the project lifecycle and regularly reviewed at key decision points, particularly at stage boundaries. This ensures the project remains viable and aligned with business objectives. The Business Case answers the crucial question: "Why are we doing this project?" It serves as the primary vehicle for decision-making throughout the project, providing stakeholders with the information needed to judge whether the project remains desirable, viable, and achievable. The Project Board has the ultimate responsibility for ensuring the project delivers value for money by making decisions based on the Business Case. PRINCE2 emphasizes that if the Business Case ceases to be valid at any point, the project should be terminated. This contrasts with many failed projects that continue despite no longer delivering business value. The continuous focus on Business Case validates investments, provides transparency to stakeholders, and ensures resources are directed to projects that deliver organizational value.
PRINCE2 Principles: Business Case - Comprehensive Guide
Introduction to Business Case in PRINCE2
The Business Case is one of the seven core themes in PRINCE2 methodology and directly links to the 'Continued Business Justification' principle. It forms the backbone of project decision-making and is vital for successful project management.
What is the Business Case?
The Business Case is a document that captures the reasoning and justification for undertaking a project. It demonstrates that the project:
- Is desirable (meets a business need)
- Is viable (can deliver the required outcomes)
- Is achievable (can be delivered successfully)
- Offers value for money
The Business Case documents the benefits, costs, timescales, and risks associated with the project, enabling informed decision-making throughout the project lifecycle.
Why is the Business Case Important?
The Business Case is crucial because it:
1. Provides the primary driver for the project
2. Ensures resources are committed only to viable projects
3. Focuses attention on business objectives rather than just deliverables
4. Provides a baseline to measure success
5. Forms the basis for ongoing decision-making
6. Prevents projects from continuing when they no longer offer sufficient value
How the Business Case Works in PRINCE2
The Business Case evolves throughout the project lifecycle:
Starting Up a Project (SU): An outline Business Case is developed
Initiating a Project (IP): The detailed Business Case is created
Controlling a Stage (CS) & Managing Stage Boundaries (SB): The Business Case is reviewed and updated
Closing a Project (CP): The Business Case is reviewed to assess whether objectives were met
The Business Case includes:
- Executive Summary
- Reasons for the project
- Business options considered
- Expected benefits (measurable)
- Expected dis-benefits
- Timescales
- Costs
- Investment appraisal (e.g., ROI, NPV)
- Major risks
Roles and Responsibilities
- Executive: Ultimately responsible for the Business Case
- Project Manager: Develops and maintains the Business Case
- Project Board: Approves the Business Case and reviews it at stage boundaries
- Senior User: Specifies benefits and ensures they are realized
- Senior Supplier: Confirms the solution can deliver the benefits
Exam Tips: Answering Questions on Business Case
1. Understand the principle of Continued Business Justification
- Remember that a project must have ongoing justification
- Know that a project should be terminated if justification ceases to exist
2. Know the Business Case development stages
- Outline Business Case (SU)
- Detailed Business Case (IP)
- Updated Business Case (throughout project)
- Verified Business Case (CP)
3. Differentiate between outputs, outcomes, and benefits
- Outputs: The project deliverables
- Outcomes: The result of using the outputs
- Benefits: Measurable improvements from outcomes
4. Understand verification methods
- Know how benefits are measured and verified
- Understand that some benefits may be realized after project closure
5. Focus on terminology and definitions
- PRINCE2 uses specific terms - use them precisely
- When asked about the Business Case, refer to its components accurately
6. Recognize the relationship with other themes
- Organization (roles related to the Business Case)
- Change (impact on Business Case)
- Risk (threats to benefits realization)
- Progress (measuring against the Business Case)
7. Common question patterns
- Questions may ask about when the Business Case is updated
- You may need to identify who is responsible for specific aspects
- Some questions may present scenarios and ask how the Business Case affects decisions
8. Be specific about review points
- End stage assessments
- Exception situations
- Project closure
Remember that the Business Case is central to PRINCE2. It justifies the project's existence and guides all major decisions. If you understand its purpose and lifecycle thoroughly, you'll be well-equipped to handle related exam questions.
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