Business Case

PRINCE2 Business Case Practice: A Comprehensive Guide for Practitioners

Why Understanding the Business Case Practice is Important

The Business Case Practice is a cornerstone of PRINCE2 methodology, serving as the primary driver for project initiation and continuation. Mastering this practice is crucial because:

• It provides the fundamental justification for a project's existence
• It ensures resources are invested only in viable undertakings
• It establishes the mechanisms for measuring project success
• It's a key theme assessed throughout PRINCE2 Practitioner exams

What is the PRINCE2 Business Case Practice?

The Business Case is one of the seven PRINCE2 themes and is described as the most important document in the project. It documents the justification for undertaking a project based on:

• The estimated costs
• The expected benefits and risks
• The timeframe
• The investment appraisal

The Business Case evolves throughout the project lifecycle, from the initial outline during project inception to the detailed case that guides execution and is finally reviewed during closure to confirm benefit realization.

Key Components of a PRINCE2 Business Case

A complete Business Case typically includes:

• Executive Summary - A high-level overview
• Reasons - Why the project is needed
• Business Options - The considered alternatives (usually do nothing, do minimum, do something)
• Expected Benefits - Measurable improvements that justify the investment
• Expected Dis-benefits - Negative outcomes that will result from the project
• Timescale - When the project will deliver and when benefits will be realized
• Costs - Full project and ongoing operational costs
• Investment Appraisal - Financial analysis techniques like ROI, NPV, IRR
• Major Risks - Threats to benefits realization

How the Business Case Works in PRINCE2

The Business Case follows a development path through the project:

1. Starting Up a Project: An outline Business Case is created
2. Initiating a Project: The Business Case is developed in detail
3. Managing a Stage Boundary: The Business Case is updated and reviewed
4. Directing a Project: The Project Board uses the Business Case to make decisions
5. Closing a Project: The realized benefits are assessed against the Business Case

The Project Board must confirm the Business Case remains viable at each stage boundary. If it becomes unviable, the project should be terminated.

Business Case Roles and Responsibilities

• Executive: Ultimate ownership of the Business Case
• Senior User: Specifies benefits and ensures they're realized
• Senior Supplier: Confirms the solution can deliver the benefits
• Project Manager: Creates and maintains the Business Case document
• Project Assurance: Verifies Business Case viability and accuracy

Benefits Management Approach

This supporting document defines:

• How benefits will be identified and measured
• Who is responsible for benefits realization
• When and how benefits reviews will be conducted
• How benefits will be tracked and reported

Exam Tips: Answering Questions on Business Case

1. Focus on Continued Business Justification: Many exam questions test your understanding that projects must remain justifiable. Look for scenarios where you need to evaluate if a project should continue.

2. Understand the Development Path: Questions often test how the Business Case evolves through project stages. Know what happens to it in each process.

3. Know Responsibilities: Be clear on who does what with the Business Case. The Executive owns it, but the Project Manager creates and maintains it.

4. Recognize Decision Points: Identify when the Business Case should be reviewed (typically at stage boundaries) and when continuation decisions should be made.

5. Connect with Other Themes: Look for relationships between the Business Case and other themes like Risk, Change, and Progress. For example, how risks might impact benefits realization.

6. Apply Principles: Link your answers to PRINCE2 principles, especially 'Continued Business Justification' and 'Learn from Experience.'

7. Distinguish Output, Outcome, Benefit: Understand the difference between project outputs (products), outcomes (the result of using outputs), and benefits (measurable improvements).

8. Remember Timing: Some benefits may only be realized after the project closes. The Benefits Review Plan schedules post-project reviews.

When tackling scenario-based questions, always refer back to how your answer supports project justification and benefits realization. The Business Case is meant to be a living document—not a 'create and forget' artifact.