Outline Business Case – its creation and use.
The Business Case states why the work of a project is worth doing and is therefore vital in ensuring that the project cost, time, and risk are justified.
The outline Business Case will only contain a high-level view at this early point. However, this is sufficient to authorise the initiation stage, where the detailed business case will be created.
The business case is developed as an outline at the start of a project based on information provided
in the project mandate. It needs to include sufficient information to enable the project board to
confirm the business justification and authorize the project manager to initiate the project.
PRINCE2 uses the term ‘outline business case’ for this initial justification. Other approaches may use terms
such as ‘strategic outline case’. The outline business case is documented in the project brief.
In most cases, the project costs, timescales, products, risks, and targets will not be sufficiently
understood at this point to provide a robust justification of the entire project. Therefore, the outline
business case will need further development and refinement.
As the project is planned in more detail and information becomes clearer, the outline business case is developed into a more detailed business case. PRINCE2 uses the term ‘full business case’ to describe this enhanced business case. Other approaches may also use the terms ‘detailed business case’ or ‘final business case’.
The provision of a project mandate activates the process of starting up a project.
The project mandate is then used as an input to develop the initial business justification for the project
documented in the outline business case as part of the project brief.
In the process of directing a project, the project brief is approved by the project board when authorizing the project initiation.
The outline business case is refined into a full business case during the process of initiating a project. The project board approves this when authorizing the project.
There are three basic business options concerning any investment:
do nothing differently
do the minimum
do more than the minimum.
The ‘do nothing differently’ option should always be the first option and act as the basis for
quantifying the other options. The difference between do nothing differently, do the minimum, or
do more than the minimum is the benefit that the investment will buy.
The analysis of each option provides the project board and the project’s stakeholders with sufficient
information to determine which option presents the best value for the organization.
It answers the question: for this level of investment, are the expected benefits more desirable, viable, and
achievable than the other available options?
During the early stages of a project, there may be a wide range of options under consideration, and
subsequently, the number of options will be reduced so that they can be examined in more detail.
It is important for all projects including those classified as ‘must do’ (such as regulatory projects) to
explore different options and select the most appropriate. There may be different approaches
available that must be evaluated in terms of their viability, desirability, and achievability.
It is the project board executive who is responsible for drafting the outline business case, and the following information will need to be included:
A clarification of the objectives and hence the reasons for the project as defined in the project mandate.
A clear understanding of how the project will align and contribute towards corporate and/or programme management objectives and strategies.
The project funding will need to be understood and stated here. This might be a simple lump-sum statement or some form of crucial payment milestones considering the cash flow situation.
The lessons log needs to be reviewed to determine if there are any lessons related to business justification.
There may also be organisational standards that must be followed concerning the format and presentation of the Business Case, such as the use of investment metrics and standard templates.
Outline Business Case – responsibilities.
The project board executive will want to check if there is any relevant background information such as contracts, service level agreements, feasibility reports and so on, in which case these should be included within the outline Business Case.
If required, the project board executive will want to seek approval of the outline business case from the Business level.
Although the project board executive is responsible for the Business Case, it may well be that the project manager or representatives from an appropriate finance department create draft versions for the project board executive to agree on.
Meanwhile, the project manager will seek advice and guidance from the senior user and executive roles to define what the project is to deliver and create the product description.
The project product description contains the customer’s quality expectations and acceptance criteria, and the information must be gathered.
Also, if there are any timescale requirements stated in the project mandate, these will have to be checked for their feasibility and included in the outline business case. Any key milestones need to be determined and also included.
The Daily Log must be reviewed, and any identified risks must be summarised in the outline business case. The objective is to provide sufficient business information for the project board to make an informed choice when authorising the initiation stage.
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