PRINCE2 Business Case Development
The PRINCE2 business case needs to be seen as a living document that will be maintained throughout the annual of the project and beyond. Once the project end product enters into operational use the business case and its supporting PRINCE2 documents the benefits realization plan will continue to be used.
The PRINCE2 business case is not just a mechanism to obtain funding as it is only by using the business case as a tool for monitoring progress that it is possible to make sure the intended benefits of the project or programme are indeed realized.
For many people the PRINCE2 business case is indeed something you do at the beginning of a project in order to secure the funds and then forget about. PRINCE2 uses the term “a living document” because the projection of benefits dropping or increasing may change the view of the project.
It is likely that throughout the annual of the project the business situation may change and it would be foolish to continue running the project unless the business case is updated to reflect the new reality. The up to date living business case provides essential on-going management information.
The initial and usually fairly high level business case can be prepared even before PRINCE2 starts and in that case it comes into the method as part of the project mandate. The mandate is the trigger that starts off Start Up.
Often the organisation has some idea of white wants to run the project and what the likely main benefits are, even if it is wildly optimistic, it is at least a start.
If the business case is not provided within the mandate, or it’s included but not in the enough detail even for the sketchy or outline business case, then you work on it during startup.
The PRINCE2 official Manual identifies four steps which cover the development of the business case including keeping it up to date. These are:
Develop. Giving the information together in the first place
Verify. Checking at intervals to ensure that the business case is still valid and that the project is still justified
Maintain. Keeping the business case up to date with the latest information, such as project costs and benefits projections
Confirm. Checking that the benefits have been forthcoming or are likely to be
It is important to get help in creating developing and maintaining the business case if you require it. Your organizations finance people may be a good first place to ask and you can think of them is part of the team.
On occasion, you may need to call in other business specialist experts.
The PRINCE2 first principle is that of continued business justification, and clearly the business case supports this.
The PRINCE2 business case lifecycle
Project mandate
The mandate may include an outline business case possibly with sketchy information that the organization briefly worked on. An example here could be a feasibility study.
Start-up
The outline business case is produced if it was not included in the mandate, or checked and amended if it was
The first project board decision at the end of start up
At the end of start-up the board must decide whether the project idea looks worthwhile on whether to authorize the initiation stage. The information in the outline business case on ballpark costs time and benefits informed this decision.
Project initiation
In the first stage of the project, the planning or initiation stage, the business case is worked into full detail with investment appraisal if required
Second project board decision at the end of the initiation stage
The full business case forms part of the project initiation document which the project manager gives to the project board at the end of the initiation stage. The board must now decide if they want to accept the PID, including the business case within it, and commit to running the whole project.
During stages
During stages the project manager checks the business case to make sure that everything remains on track to deliver the expected levels of benefit.
If some new information comes end, or something happens that affects the benefit levels, the project manager may need to warm the project board immediately. This is part of the exception management control.
At the end of each stage and third project board decision
Towards the end of each management stage the project manager works with the executive, senior users and any others with an interest and updates the business case. This work involves making sure that the whole project is still viable as well as checking individual benefit projections.
Then the project board decide whether or not to authorize the next stage. This end stage work repeats for every stage in the project.
Interfacing with organisational finance
Nearly every organization is obsessed with controlling money. Finance people want to know exactly when everything will cost down to the last detail and they want to know that as soon as someone even brief the word project.
Actually, this is more than illogical and not aligned with sensible business practice. How can you possibly say how much a project will cost, with absolute precision and to tender us all places, when you’re not even completely clear on what the project is yet?
PRINCE2 is much more sensible than that. When the idea is rough, some of the costings. As you do more work to plan the project out in initiation, so you work for the costings in more detail and more accurately.
What is the point of putting together an extremely detailed business case with detailed costings based on guesswork and ignorance? To compound this one. Someone puts forward detailed information changing it is very hard as the budget become setting concrete no matter how much anyone says that the costings are estimates and subject to change after the more detailed planning work.
Going with the organisational trends to provide detailed costings upfront goes against the logic of PRINCE2. Instead of start-up happening reali quickly to sketch the project out, it becomes much more involved and every thing begins to slow down.
That is because when you try to work out detailed costings this early, you are doing initiation level work at start-up. It is important that you do all you can to avoid getting bogged down in too much detail early on.
Work hard to try to change the standard organisational approach that requires compiling detailed financial information in advance of the initiation stage of the project.
You normally run start-up very rapidly in days or even hours, so make every effort to keep things that way. Do not try to do for project planning and get drawn into the detailed costings and calculations, which in turn require detailed plans to provide source data.
Many organisations have well-established formats for how you must present financial case is to decision makers such as committees. In one sense those formats aren’t a problem, but in another sense they can be because of overheads.
Consider if you can combine the project needs as represented by PRINCE2 with in the organisational needs as represented in the finance submission format.
You may for example, or to the content and layout of the business case so that you present the organisational items first, and the PRINCE2 elements that don’t appear in the organisational format second – or even as an appendix.
In this way you can have one document that covers both requirements and save on overheads. As with all the timings though, if you think that the PRINCE2 content is well suited to the project and is better than the organisational format, then you may suggest change to bring the organisational standards into line with the PRINCE2 method.
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