PRINCE2 technique for business case management 

 February 5, 2024

By  Dave Litten

PRINCE2 technique for business case management

As shown below, PRINCE2 includes a four-step business case management technique (develop, check, maintain, confirm). An alternative procedure can be used in its place if desired, for example, if the business has already created a process specific to its organization. 

The use of an alternative procedure should be documented as part of the tailoring decisions in the project initiation documentation.

The business case is developed in outline and then in detail at the beginning of the project. It is reviewed and updated as it develops and evolves throughout the project’s life (see below).

It is checked by the project board at each key decision point (such as at stage boundaries) and confirmed throughout the period that benefits accrue.

Prince2 Technique For Business Case Management Prince2 Technique For Business Case Management

In the diagram above: 

Develop means to explore options and get the correct information upon which investment appraisal decisions can be made.

Check: means to assess whether the project is (still) worthwhile

Maintain: means to keep the business case updated with actual progress and current forecasts (including forecast benefits)

Confirm: means to assess whether the intended benefits have been (or will be) realized. Confirming benefits will primarily occur after the project has been closed, although benefits may be realized during the project when products are delivered and released iteratively.

Develop the business case

Providing a project mandate activates the process of starting up a project. 

The project mandate is then used as input to develop the initial business justification for the project, which is documented in the outlined business case as part of the project brief. 

In directing a project, the board approves the brief when authorizing the project initiation.

The outline business case is refined into a full business case while initiating a project. The project board approves this when authorizing the project.

There are three primary 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 basis for quantifying the other options. The difference between doing nothing differently, doing the minimum, or doing more than the minimum is the benefit the investment will buy.

Analyzing each option provides the project board and 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 essential for all projects, including those classified as ‘must do’ (such as regulatory projects), to explore different options and select the most appropriate. 

Different approaches may be available that must be evaluated in terms of their viability, desirability, and achievability.

Check the business case

The business case for the chosen option should be continually assessed for desirability, viability, and achievability, as any new risks or changes might justify switching to another option.

The business case may be refined and updated across stages as project costs, timescale, products, and risks are further understood. Continued business justification drives all decision-making by ensuring that the business objectives and benefits sought can continue to be realized. 

As a minimum, the project board should check the business case:

● at the end of the process of starting up a project to authorize project initiation

● at the end of the process of initiating a project to authorize the project

● at the end of each stage to authorize the next stage and the continuation of the project

● when assessing an exception plan to authorize the revised stage and continuation of the project.

The project manager will also check the business case:

 ● when assessing progress, risks, and issues to determine their impact on the business justification

 ● during the final stage, as part of closing a project, assess the project’s performance against requirements and the probability that the outcomes will provide the expected benefits

● when consulting with stakeholders to determine whether any goals have changed (such as whether the business has established any additional sustainability objectives).

There are many ways to check the expected benefits. For example, sensitivity analysis can determine whether the business case depends heavily on a specific benefit. If it is, this may affect project planning, monitoring and control activities, and risk management, as steps would need to be taken to protect that specific benefit.

Maintain the business case

At the end of each stage, the project manager updates the business case with the progress data (such as products delivered, project costs, and benefits realized) and the latest forecasted benefits and performance targets. 

Maintaining the business case with appropriate version control is essential so that previous versions can be accessed for reference and comparison.

Confirm the business case

The business will review the business case as part of a post-project benefits review to determine the project outcomes in realizing their benefits. They will also assess whether the intended benefits have been realized in practice. During the project, benefits reviews should be conducted at stage boundaries to confirm that any benefits forecast to be achieved during the project are on track to be realized.

Projects deliver outputs, and using those outputs will result in outcomes that benefit the business. The project management team must understand the benefits and outcomes the project should realize. Otherwise, it is unlikely to develop the right outputs or build and sustain commitment to the changes during the project’s lifespan.

The senior user, responsible for specifying the project’s benefits, is also accountable for confirming that the forecast benefits are realized. This may involve a commitment beyond the project’s life, as it is likely that many benefits will only be realized after the project has closed. 

For this reason, it is usually advisable that the senior user comes from an area of the business impacted by the change. However, this poses a dilemma because when the project closes, the ‘temporary organization’ is disbanded along with the framework (particularly the funding and resources) to perform any measurement activities.

The benefits management approach defines the management actions that will be established to ensure that the project’s outcomes are achieved and to confirm that the project’s benefits are realized. 

It is first created by the project manager in the ‘initiating a project’ process during the initiation stage and is submitted to the project board for approval when seeking project authorization. 

If the business is to manage or participate in the benefits reviews, the project board may need to seek its approval. The project or the business may manage the benefits management approach and is likely to be managed beyond the project’s life.

Any benefits that can be measured during the life of a project should be confirmed by the senior user for formal reporting by the project manager in the end-stage and end-project reports. 

When benefits can be reviewed during the project’s life, the benefits management approach should include appropriate mid-project benefits reviews. 

Any unrealized forecast benefits should be re-examined and their forecasts updated as part of the ‘managing a stage boundary’ process.

Post-project benefits reviews will involve the business holding the senior user accountable by asking for evidence of how the individual benefits allocated to them have been realized, with corrective actions taken to achieve benefits that have yet to be fully realized. 

The post-project benefits reviews will also review the performance of the project product in operational use and identify whether there have been any side effects (beneficial or adverse) that may provide valuable lessons for other projects.

The project executive ensures that benefits reviews are planned and executed.

For post-project measurement activities, the responsibility for benefits reviews transfers from the project executive to the business (specifically the senior user) when the project closes, as the reviews will need to be funded and resourced.

Coming Soon! Our PRINCE2 7th Edition Masterclass!

Dave Litten

David spent 25 years as a senior project manager for USA multinationals, and has deep experience in project management. He now develops a wide range of Project Management Masterclasses, under the Projex Academy brand name. In addition, David runs project management training seminars across the world, and is a prolific writer on the many topics of project management.

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