In PRINCE2 7, establishing business justification is a foundational principle and practice that ensures a project remains desirable, viable, and achievable throughout its lifecycle. It acts as the primary driver for decision-making, preventing projects from continuing when they no longer provide va…In PRINCE2 7, establishing business justification is a foundational principle and practice that ensures a project remains desirable, viable, and achievable throughout its lifecycle. It acts as the primary driver for decision-making, preventing projects from continuing when they no longer provide value. This practice is not merely a box-ticking exercise at the start; it is a continuous requirement. If the justification ceases to exist at any point, the project should be stopped to prevent wasted resources.
The central management product for this practice is the Business Case. In the Practitioner context, managing the Business Case involves four specific activities: developing, verifying, maintaining, and confirming. Initially, an Outline Business Case is created during the 'Starting a Project' process to justify the initiation stage. This is expanded into a detailed Business Case during 'Initiating a Project' to provide a baseline for the project.
Crucially, the Business Case must be verified at every Stage Boundary by the Project Board, led by the Executive who holds ultimate accountability. They assess whether the project is still worth the investment based on updated costs, risks, and timescales. The document is also maintained throughout the project; as stages complete, estimates are replaced with actual data, and forecasts are revised. Finally, the practice involves confirming benefits via the Benefits Management Approach, which tracks the realization of value often extending beyond the project's closure. PRINCE2 7 further emphasizes aligning this justification with organizational sustainability goals and strategy, ensuring that the project delivers holistic value rather than just immediate outputs.
Establishing Business Justification - PRINCE2 Practitioner v7 Guide
What is Establishing Business Justification? In the context of PRINCE2 v7, establishing business justification is the act of ensuring that a project is desirable, viable, and achievable before it begins and throughout its lifecycle. It relies on the Continued Business Justification principle, which mandates that there must be a justifiable reason to start the project, the justification must remain valid throughout the project, and it must be documented and approved.
Why is it Important? Projects consume organizational resources (time, money, people) and carry risk. Without established justification: 1. Projects may not align with corporate strategy. 2. Resources might be wasted on 'pet projects' that deliver no real value. 3. Organizations cannot measure if the investment provided a Return on Investment (ROI) or Value for Money (VfM).
How it Works: The Business Case Practice The Business Case practice provides the mechanisms to establish and maintain this justification. It involves three key criteria: 1. Desirable: Do the benefits outweigh the costs and risks? (Value proposition) 2. Viable: Can we deliver it? (Capability and solvency) 3. Achievable: Are the benefits realistic to realize? (Benefit realization)
The justification is documented in the Business Case. It is developed in outline during the 'Starting Up a Project' process, detailed in 'Initiating a Project', and updated at every 'Stage Boundary' to ensure the project should continue.
How to Answer Questions on Establishing Business Justification In the PRINCE2 Practitioner exam, you will be presented with a scenario. You must apply the theory to that specific context. Questions often focus on: 1. Assessing Validity: You may be given a new event (e.g., a supplier price hike or a competitor release) and asked if the Business Case is still viable. 2. Roles and Responsibilities: Identifying who is responsible for the justification. (Hint: The Executive is ultimately responsible for the Business Case, ensuring it aligns with corporate strategy). 3. Output vs. Outcome vs. Benefit: You must distinguish between the deliverable (Output), the change resulting from using the deliverable (Outcome), and the measurable improvement (Benefit).
Exam Tips: Answering Questions on Establishing Business Justification Tip 1: Look for the 'Executive'. If a question asks who confirms that the project is providing value for money, the answer is almost always the Executive. The Project Manager updates the Business Case, but the Executive owns it. Tip 2: Check the 'Continued' aspect. If a scenario states that costs have doubled or benefits have disappeared, the correct PRINCE2 action is usually to raise an exception or recommend premature closure, not to blindly continue. The justification must exist now, not just at the start. Tip 3: Terminology Traps. Be careful with definitions. An Output is the car; the Outcome is the ability to travel; the Benefit is saved travel time. Practitioner questions often mix these up to test your understanding of how justification is constructed. Tip 4: Minimum Requirements. Remember that to satisfy the principle, the justification must be documented. A verbal agreement is not sufficient in PRINCE2.