In PRINCE2 7, the Business Case is the driving force behind a project, representing the justification for the investment. It is not a static document but a dynamic instrument that evolves through a specific lifecycle to ensure the project remains desirable, viable, and achievable.
1. **Develop (St…In PRINCE2 7, the Business Case is the driving force behind a project, representing the justification for the investment. It is not a static document but a dynamic instrument that evolves through a specific lifecycle to ensure the project remains desirable, viable, and achievable.
1. **Develop (Starting Up):** The lifecycle begins in the 'Starting Up a Project' process. Here, an **Outline Business Case** is created based on the project mandate. Its purpose is to provide just enough information for the Project Board to decide if the project is worth initiating, acting as a gate to prevent poor ideas from proceeding.
2. **Verify and Baseline (Initiating):** During the 'Initiating a Project' process, the outline is refined into the **Detailed Business Case**. This serves as the performance baseline, detailing costs, risks, and expected benefits. Concurrently, the Benefits Management Approach is developed to define how and when benefits will be measured.
3. **Maintain and Confirm (During the Project):** throughout the lifecycle, specifically at each **Stage Boundary**, the Business Case is updated with actual data (costs incurred) and revised forecasts. The Project Board reviews this to ensure the project still offers value for money before authorizing the next stage. If the justification disappears, the project should be stopped.
4. **Assess (Closing):** Finally, in 'Closing a Project', the Business Case is reviewed to compare the final project outcomes against the original baseline. While the project ends, the Business Case lifecycle extends into the post-project period where the **Benefits Management Approach** tracks the realization of long-term benefits.
Business Case Lifecycle
What is the Business Case Lifecycle? In PRINCE2, the Business Case is not a static document written at the start and forgotten. It is a dynamic instrument that evolves throughout the life of the project. The Business Case Lifecycle refers to the continuous process of developing, verifying, maintaining, and confirming the justification for the project. It ensures that the project remains desirable (the balance of costs, benefits, and risks), viable (able to be delivered), and achievable (benefits can be realized).
Why is it Important? Projects operate in changing environments. Costs may increase, risks may materialize, and the strategic needs of the organization may shift. The lifecycle approach ensures that the project remains aligned with business objectives. If at any point the Business Case ceases to be valid (e.g., costs exceed benefits), the project should be stopped to prevent wasted investment. This aligns with the PRINCE2 principle of Continued Business Justification.
How it Works: The Stages of Evolution The Business Case evolves through specific steps related to the PRINCE2 processes: 1. Develop (Starting Up): Derived from the Project Mandate, the Outline Business Case is created. This is a rough estimation used to justify the initiation stage. 2. Refine (Initiating): The Outline is expanded into the detailed Business Case using data from the Project Plan. It becomes part of the Project Initiation Documentation (PID). 3. Maintain (Managing a Stage Boundary): At the end of every management stage, the Business Case is updated with actual costs incurred and revised forecasts for time and cost. It is also updated if a significant issue or risk impacts viability. 4. Verify (Directing a Project): The Project Board reviews the Business Case at every Key Decision Point (Gate) to authorize the next stage. 5. Confirm (Closing & Post-Project): During the Closing a Project process, the final status is assessed against the original baseline. Post-project, the Benefits Management Approach is used to confirm the realization of benefits.
Exam Tips: Answering Questions on Business Case Lifecycle When answering Practitioner questions regarding the Business Case Lifecycle, apply the following logic:
1. Identify the Document Version: Check which process the scenario is currently in. If the project is in 'Starting Up a Project', the answer must refer to the Outline Business Case. If the project is in 'Initiating a Project' or subsequent delivery stages, it refers to the detailed Business Case.
2. Watch for Triggers: Questions often present a scenario where a risk occurs or a change is requested. You must identify that the immediate action is to update the Business Case to reflect the impact of this change on costs, time, or benefits. The Project Manager updates it; the Executive approves it.
3. The 'Do Nothing' Option: When assessing the lifecycle or investment appraisal, remember that the Business Case should preferably include a comparison to the 'do nothing' option (business as usual) to demonstrate value.
4. Role Responsibilities: If a question asks who is responsible for the Business Case during its lifecycle, the Executive is accountable for it. However, the Project Manager is usually the one who performs the work of drafting and updating it on behalf of the Executive.
5. Viability Checks: If a scenario suggests the Business Case is no longer viable, the correct answer is never to 'continue and hope.' The correct path involves raising an exception or recommending premature closure to the Project Board.