In the context of PRINCE2 7 and the Business Case practice, Business Objectives and Dis-benefits represent the strategic drivers and the accepted negative consequences of a project, respectively.
**Business Objectives** are the strategic goals of the organization. They are the specific targets—suc…In the context of PRINCE2 7 and the Business Case practice, Business Objectives and Dis-benefits represent the strategic drivers and the accepted negative consequences of a project, respectively.
**Business Objectives** are the strategic goals of the organization. They are the specific targets—such as increasing market share, achieving net-zero emissions, or complying with new regulations—that corporate management aims to reach. The project is the vehicle used to deliver outputs and outcomes that help realize these objectives. In the Business Case, the project must demonstrate a clear 'Golden Thread' connecting the project's outputs to the realization of benefits that directly support these Business Objectives. If a project does not align with these high-level goals, it lacks strategic justification.
**Dis-benefits**, by contrast, are the measurable declines in the value of one or more objectives that are perceived as negative by stakeholders. PRINCE2 explicitly distinguishes dis-benefits from risks. While a risk is an uncertain event that *might* occur, a dis-benefit is an expected, actual consequence of the project. For instance, a project to automate a factory (Objective: Efficiency) might result in the necessary redundancy of staff (Dis-benefit).
When calculating the desirability of a project within the Business Case, Dis-benefits must be quantified and subtracted from the gross benefits. Ignoring them results in an inflated view of the project's value. PRINCE2 7 highlights that dis-benefits are often the price paid to achieve the Business Objectives; the role of the Business Case is to prove that the positive value of the Objectives outweighs the Costs, Risks, and Dis-benefits combined.
Dis-benefits and Business Objectives in PRINCE2 Practitioner v7
Why is this Important? In PRINCE2 v7, the Business Case is the driving force behind a project. To determine if a project is Desirable, Viable, and Achievable, you must look beyond just the positive gains (Benefits). You must accurately assess the negative side-effects (Dis-benefits) and ensure everything aligns with the organization's strategic goals (Business Objectives). Answering questions on this topic correctly demonstrates your ability to evaluate the true worth of a project in a realistic scenario.
What are Business Objectives? Business objectives are the measurable strategies or goals of the organization. The project is strictly a means to an end; the project produces outputs, which lead to outcomes, which result in benefits that support these objectives. If a project does not align with business objectives, it should not be started.
What are Dis-benefits? A dis-benefit is a measurable decline in the state of an objective as a result of an outcome perceived as negative by one or more stakeholders. It is an actual consequence, not just a risk.
Key Distinctions for the Exam: 1. Dis-benefit vs. Cost: Costs are the resources (money, time, people) spent to deliver the project. Dis-benefits are negative side-effects of the result (e.g., a drop in customer satisfaction during a system migration). 2. Dis-benefit vs. Risk: A risk is an uncertain event (it might happen). A dis-benefit is an expected consequence (we know it will happen as part of the project).
How it Works in Practice When creating the Investment Appraisal for the Business Case, dis-benefits are quantified and subtracted from the benefits. For example, if a new automation system saves $100k a year (Benefit) but results in a $10k loss in brand reputation due to reduced human contact (Dis-benefit), the net value is analyzed against the Business Objectives.
Exam Tips: Answering Questions on Dis-benefits and Business Objectives When facing scenario-based questions in the PRINCE2 Practitioner exam, follow these steps:
1. Identify the 'Type' of Negative Impact If the scenario describes a negative impact, determine its category: - Is it the price paid for goods/services? -> It is a Cost. - Is it something that might occur? -> It is a Risk. - Is it a certain negative outcome derived from the project's use? -> It is a Dis-benefit.
2. Validate the Alignment Questions may ask if a Business Case is strong. Look for a clear link between the project's benefits and the corporate Business Objectives. If the project makes money but violates a core objective (e.g., 'To reduce our carbon footprint'), the Business Case may not be viable.
3. Look for 'Perception' Remember that a benefit for one stakeholder might be a dis-benefit for another (e.g., a merger streamlines costs for the Board but results in job losses for the Staff). In the exam, ensure you identify who perceives the outcome as negative.
4. Net Benefit Calculation If a question asks about the value of the project, ensure you account for dis-benefits in the calculation: (Total Quantified Benefits) - (Total Quantified Dis-benefits) = Net Benefit.