In this article, you’ll learn about the business case theme in PRINCE2. You’ll discover what it aims to achieve, and how it is ‘assembled’.
What is the business case in PRINCE2?
The business case is the key document within PRINCE2. Developed first as an outline when starting the project, it is developed further during the initiation stage. It should be updated at the end of each subsequent stage (except, of course, the final stage). By continuously updating the business case, the project board will be able to determine if further investment in the project is worthwhile.
This continuous evolutionary nature of the business case allows it to establish and quantify estimated costs, risks and benefits of the project and its outcomes. It also establishes the methods by which the ongoing project can be assessed for viability and achievability.
What component parts are included in the business case?
There will be nine main sections included within the business case. These are explained below individually.
The executive summary
This highlights the key points of the business case, and will state the expected return on investment.
The reasons for the project
This will describe why the project is needed. For example, this may be a problem which is stopping a business from progressing, or an opportunity which management want to take advantage of.
This section will discuss what the consequences will be under three basic options available to the business. These are:
- Do nothing
- Do the minimum
- Do something
This will include costings, timeframes, benefits and risks. The ‘do nothing’ option will be chosen if other options are deemed as unviable. If this is the case, there is no project.
The business options case will present the case for the option selected, and this will form the basis for moving ahead with the project. The remaining sections will be completed with the assumption that the preferred option is the one selected.
This section details the expected outcomes and benefits of the project. While these may be financial in nature, they don’t have to be. Examples include:
- New machinery could result in greater productivity
- More staff training may result in more satisfied and adept people in an organisation
- A doctor’s surgery that invests in better equipment may witness better patient outcomes, but the financial benefits are harder to quantify
There may be negative consequences of undertaking the project. For example, productivity may fall while the project is bedding in.
These negative consequences may not be felt equally. For example, higher productivity could lead to a section of department losing jobs or being closed altogether. While the project produces a net benefit for the company, for certain stakeholders there is a definite negative consequence. (Note that negative consequences are not risks, which are dealt with separately.)
The first timescale to be discussed is the length of time over which the project will run.
The second is the length of time over which benefits will be realised.
There are two costs to be discussed, including where funding is coming from:
- The cost of the project
- Ongoing costs after the project (e.g. maintenance, training, etc.)
What are the aggregate benefits and negative consequences, as measured against risks and costs? This is an assessment of the financial viability of the project.
The final main section of the business case summarises the major risks associated with the project. This should discuss potential impacts and strategies for dealing with them and mitigating them. The project board will consider these risks when deciding project viability, and whether to proceed at the end of each stage.
Finalising the business case
While there is no further development of the business case needed at the end of the project, it is usual for it to be reviewed and compared to realised benefits. The project manager will develop a benefits review plan at the project initiation stage, to be approved by the project board. This will detail:
- How the benefits will be measured
- Who will measure them
- When they will be measured
Like the business case, the benefits review plan is updated at the end of each stage, with benefits achieved to date. Further benefits reviews may be undertaken after the project is completed at times determined by the project manager and project board.
In our next blog, we’ll examine the theme of organisation in PRINCE2 projects. In the meantime, don’t hesitate to contact us: