The Business Case component article forms part of the PRINCE2 training courses offered by Knowledge Train. We offer a wide range of PRINCE2 courses in the UK.
A Business Case is written to justify spending the investment required for a project. Before starting any project, senior management must be satisfied that the expenditure is worthwhile. In other words, the benefits the project shall bring to the organisation need to be clarified and where possible, quantified.
An organisation should not invest money in a project if there are not clearly defined benefits to be realised in return for this investment. The Business Case is a document which describes these benefits and the financial justification for spending the necessary investment.
The benefits of doing a project could be many and varied. For example, investment in new machinery may bring benefits in terms of higher productivity and cost savings on maintenance. Investment in training may bring the benefits of greater staff productivity. Some benefits may not be so easily quantifiable. For example, investment in new hospital equipment may bring improvements in patient care which is an obvious benefit, but the financial benefits may be harder to quantify.
The Business Case needs to set out why the project is needed. This allows senior management to be certain that the reasons have been thought through and haven't simply been decided on a whim. An important section of the Business Case is the investment appraisal. This is where the benefits over time are compared to the costs over the same period. It is common to compare this situation with the ‘do nothing’ scenario. In other words compare what would happen if we proceed with the project with what would happen if we didn't proceed with the project.
Another key section of the Business Case is a summary of the main risks to the project. These risks are taken into consideration by senior management when they decide whether to proceed with the project. They may of course decide that it isn’t sensible to proceed with a project because of the risks involved.
Similarly, senior management needs to understand the total cost and time required for the project, so these must also be documented in the Business Case.
The Business Case is sometimes referred to as the ‘driver’ of a project. This is because it drives the decision making about whether to invest resources in performing the project. The Business Case is re-assessed at the end of every stage (see the Controls component) to determine if the project remains a worthwhile investment. If it is thought that, for whatever reason, the project is no longer a worthwhile investment, then the project should be stopped immediately and no more money should be spent on the project.
A Business Case is an example of what PRINCE2 refers to as ‘management products’ – in other words a document which assists in the management of the project. PRINCE2 defines a number of management products in the manual Managing Successful Projects with PRINCE2™ each of which can assist in the management of a project.
PRINCE2 also defines the term ‘specialist products’ which refers to anything produced from a project which is special to that project e.g. a software system, a new car design, a building, a bridge etc. All of the non-management work on a project is taken up with building or creating these specialist products. These specialist products are the things which shall help the organisation deliver the benefits in the Business Case.
This article was taken from the booklet Concise PRINCE2™ (PRINCE2 ™ is a Trade Mark of the Office of Government Commerce) which was offered to students as part of the PRINCE2 training course (version 2005) by Knowledge Train. This booklet has been based on OGC (PRINCE2™) material. Reproduced under licence from OGC.
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