PRINCE2 Foundation Certification Notes 4: Business Case Theme
Important: The new PRINCE2® Foundation and Practitioner exams (PRINCE2® 2017) are available from 10 July 2017 (details of the changes here). Don’t worry, the changes are quite minor indeed as all the 7 principles, themes and processes remain the same. From now on until the end of 2017, candidates can take either the existing or updated English versions of the PRINCE2® exam. All PRINCE2® Foundation and Practitioner exams will be based on PRINCE2® 2017 from 1 January 2018. You can still seize the time to get certified based on the current version! Once you get PRINCE2® certified, your certification is still valid under PRINCE2® 2017 and onwards!
Introduction: In PRINCE2®, there are 7 Themes describing important aspects of project management that are vital to the success of the project. The Business Case Theme is the first PRINCE2® Theme which focuses on whether the project benefits justifies the investment. This should be monitored continuously during the life of the project. Once the project is considered not beneficial enough, it might be stopped depending on the decision of the management. The PRINCE2® Foundation Study Notes for the Business Case Theme below details what are needed for the PRINCE2® Foundation Exam.
PRINCE2® Theme: Business Case
- The Business Case is a must for PRINCE2® projects that contains the justifications for the project (i.e. why the project, how to carry out the project and how much benefits the project will bring, etc.). It is part of the Project Initiation Document (PID).
- It presents the optimum amount of information as the basis to judge whether the project is desirable, viable, achievable and worthwhile to start and continue — i.e. the Business Case is not only vital for the initiation of the project but it is often referred regularly to during the execution and closure of the project.
- The Business Case must be continually updated throughout the life of the project to provide the updated status of the project.
- The Business Case needs to be formally approved (i.e. baselined — to be managed under configuration management).
Types of Business Cases
- Outline Business Case
- developed during ‘Starting up a Project’ process which is derived from the project mandate
- need to be reviewed by the project board and approved by management (i.e. baseline)
- responsible by the Executive
- Detailed Business Case
- developed during ‘Initiating a Project’ process from the Outline Business Case together with the Project Plan
- includes more details (e.g. project cost, time, products and risks)
- need to be reviewed by management in Benefits Review for management stages
- responsible by the Executive; updated by the Project Manager
Content/Format of a Business Case
The actual contents of the Business Case varies according to organization needs as well as the scope/severity of the project. PRINCE2® does not prescribe a definite format for the Business Case. But the following are major items that are found in most Business Cases.
- an executive summary for the management
- reasons for the existence of the project (why it is worthwhile to undertake the project)
- at least 3 business options (i.e. doing nothing, doing the minimum and doing something) with analysis of respective expected benefits and dis-benefits (better in quantifiable terms e.g. in a money range))
- the time of the project (i.e. when would spending incur and benefits realized)
- the cost of the project with assumptions (i.e. cost calculated in the project plan plus ongoing running/maintenance costs)
- investment appraisals (i.e. compare the total costs of the project against the benefits realized from the project over time)
- major risks for the project
- Output — the products (tangible or intangible) delivered by the project
- Outcome — the results brought about from using the output of the project
- Benefit — the quantifiable improvement from the project outcome (often in terms of money)
Business Case Theme: Roles and Responsibilities
- Corporate or Programme Management: provides the project mandate (the authorization for the start of the project, can be in written or verbal format) and defines the standards/level of details of the Business Case
- Executive (can be considered as the project owner): responsible for the Business Case and the Benefits Review Plan during the whole project life — to ensure the project is in line with corporate strategies and benefits generated from the project justify the cost (assessed with the Benefits Review Plan). Executive is also responsible for securing funding for the project.
- Executive may ask the Business Analyst to help developing the Business Case
- Senior User(s): specifies the benefits/desired outcomes required from the project which would include the expected products, desired outcome and benefits to be achieved. And during the benefits reviews, Senior User(s) needs to provide actual vs forecast benefits statement to help assessing the viability of the project at different stages.
- Senior Supplier(s): responsible for the supplier Business Case(s) (if any) and checks that the required products can be achieved with the estimated cost.
- Project Manager: help the Executive to compose the Business Case and update it at the end of each management stage with actual project data. Project Manager is also responsible for carrying out impact analysis of new/changed issues/risks affecting the project against the original.
- Project Assurance: carries out business assurance responsibilities by verifying and monitoring the Business Case against project progress and changes and ensures the project is financially beneficial to the business for the life of the project. The Project Assurance also need to check whether the project is aligned with programme/corporate strategy.
- Project Support: provides advice to the Project Manager on changes to the products affecting the Business Case.
(The PRINCE2® Business Theme is similar to the Project Integration Management as described in the PMBOK® Guide for PMP Certification Exam for project initialization though the development of the Business Case is usually not considered as the responsibility of the project manager (but that of the project sponsor) in PMP Exam.)
Wish you PRINCE2® Foundation Exam success!