Business case

• Defined
  • Purpose
  • Business Case defined
  • Outputs, outcomes and benefits
  • Types of Business Case
• Approach
  • Overview
  • Developing the Business Case
  • Verifying and maintaining the Business Case
  • Confirming the benefits
• Approach - The contents
  • Typically contains
  • Reasons
  • Business options
  • Expected benefits
  • Timescale
  • Costs
  • Investment appraisal
  • Major risks
• Responsibilities

Key sections

• Introduction
• Business case
• Organization
• Quality
• Plans
• Risk
• Change
• Progress
• Introduction to processes
• Starting up a projectDirecting a project
• Initiating a project
• Controlling a stage
• Managing Product Delivery
• Managing a Stage Boundary
• Closing a Project
• Tailoring PRINCE2 to the project environment
• Directing Projects with PRINCE2

The PRINCE2® approach

The contents

Expected benefits

The Business Case should list each benefit that it is claimed would be achieved by the project’s outcome (for the selected business option).
It is important to define the current status of each benefit in quantifiable terms so that measurable improvements can be assessed after the project has been completed.
The Business Case should define how and when the measurement of the improvement can be made.
For example, one of the benefits of relocating the office could be a saving in hotel conferencing costs, but only if the new site has more conference rooms.
Benefits can be financial and non-financial (sometimes referred to as cashable and non-cashable).
Regardless of whether they are financial or non-financial, benefits should be:

• Aligned to corporate objectives and strategy
• Mapped from the outputs and outcomes provided by the project
• Quantified (with tolerance)
• Measurable
• Assigned.

Clear responsibility for benefits, collectively and individually, is a key requirement for successful benefits realization.
The Senior User(s) is responsible for the set of benefits within their respective areas, but responsibility for individual benefits should be assigned to an appropriate person, ideally from within the group of users affected by that benefit.

The list of expected benefits will influence the set of products that the project will provide.
The project should not include any products that do not directly or indirectly enable the sought-after benefits to be achieved.
Mapping products to outcomes and subsequently to benefits aids decision making in the planning and control of the project.
Such mapping enables decisions to be made based on the impact of the realization of the expected benefits, i.e. the justification for undertaking the project.

Wherever possible, benefits should be expressed in tangible ways.
The Senior User or Executive may define many benefits as intangible (for example, ‘happier staff’).
It is worth making the effort to think carefully about intangible benefits to see whether they can be expressed in measurable ways.
In this example, ‘happier staff’ may translate into reduced staff turnover and/or less time off for stress-related problems.
Both of these can be converted into a likely monetary saving.

The quantification of benefits enables benefits tolerance to be set (e.g. a 10–15% increase in sales) and the measurability of the benefits ensures that they can be proven.
If the project includes benefits that cannot be proven, then it is impossible to judge whether the project:

• Has been a success
• Has provided value for money
• Should be (or have been) initiated.

There are many ways to verify the expected benefits.
For example, sensitivity analysis can be used to determine whether the Business Case is heavily dependent on a particular benefit.
If it is, this may affect project planning, monitoring and control activities, and risk management [see ‘The Complete Risk Management package’], as steps would need to be taken to protect that specific benefit.

Another example is to define three views of the achievement of the benefits, i.e. what are we really expecting, what might we achieve if things went well, and what might be the worst-case scenario?
The last might be affected by building into the costs an allowance for estimating inaccuracies, changes and risks.
This analysis usually reveals whether benefit expectations are reasonable or overoptimistic.
The result of this analysis can lead to revision of the decision to go ahead with the project, which in turn would form a basis for setting any benefit tolerance.
Once the benefits are defined, the activities to establish and collect the measures should be described in the Benefits Review Plan.

PRINCE2® is a Registered Trade Mark of the Office of Government Commerce in the United Kingdom and other countries.