What Is A Business Case?

The objective

One of the key areas of focus of Prince2 2009 is the Business Case. Senior managers will always want to ascertain if the project meets particular requirements and remains in that state. The key points are whether the project is desirable (a balance of benefit, risk and costs), viable (will the project actually produce the product) and achievable (will the product supply the benefits desired). They will need this information so as to make the correct decisions on their investment. Simply expressed, is the project good value for money.

Minus the business justification a project can’t go on. Not just this, but it is the rationale for a project which should not begin without one. For this reason, if the business situation alters in the course of the project, and this is detrimental, it is very likely to be modified or even terminated. It is never fixed. It controls the ultimate viability of a project. When writing a Business Case it may prove useful to use a set format or look at one from an earlier job.

It may be tempting to use it to help initiate the project then put it on the rear shelf. Within PRINCE2 2009 this would be a heresy. It must be taken account of at the appropriate milestones of any project. Projects should always be reviewed to show how they will contribute to the corporate objectives. Thus, the organization can compare projects to maximize their financial commitment. The person who asks ‘what is a Business Case’ is probably not running the project as well as can be expected.

This business reason is noted in the Business Case document. The rationales for the project will be based upon projections of costs, project risks and the expected gains. These reasons will thus drive the project decision making. The Executive will want to know the level of benefit (from a specific level of financial commitment) and when it will materialise given a specific set of risks.

It is beneficial to remember that any project has an objective and the project is certainly not an end in itself. Therefore, anything that influences the project should be evaluated by consulting the Business Case. So, it sits in the background of each project decision making.

Within PRINCE2 2009 the Senior User (s), who will also sit on the Project Board, will stipulate the benefits and guarantee that they are realized by the product.

The Executive has the responsibility for verifying that the benefits provided by the Senior User are in agreement with the objectives of the corporation, could be attained and are good value for money.

The PRINCE2 Business Case is put together at the start of a project and is managed and referred to for the duration of the project. It is formally ratified by the Project Board at decisive points in the project, for example, end stage analyses. Benefits are confirmed as they materialise. It is not just the Project Board that must put their trust in the project but likewise all the stakeholders.

If one currently exists, for instance, from program or corporate management, it should be changed to meet the current project demands.