The PRINCE2 7th Edition Business Case 

 February 4, 2024

By  Dave Litten

The PRINCE2 7th Edition Business Case

The business case practice aims to establish mechanisms to judge whether the project is (and remains) desirable, viable, and achievable to support decision-making in its continued investment.

The business case is at the centre of any impact assessment of risks, issues, and changes by asking the question: how will this risk, issue, or change affect the viability of the business case and the business objectives and benefits sought?

PRINCE2 Business Case justification

Business justification is not only about costs but also about understanding the value of a project. It is the perceived benefits or importance of the outcomes in proportion to the resources deployed to achieve them.

Business justification is about selecting an approach that offers the best overall value.

Organizations undertake projects to make measurable improvements in one or more aspects of their business. These measurable improvements are called benefits. In compliance or regulatory projects, the benefits may be compared to the consequences of inaction.

PRINCE2 projects deliver outputs in the form of products which are used to facilitate changes in an organization or for organizations. These changes create capabilities that lead to outcomes.

The outcomes allow the organization(s) to realize the benefits explained in the project’s business case. Outcomes that are perceived as negative by one or more stakeholders are called dis-benefits.

All projects must have a business justification, usually documented in a business case.

The business case establishes not only the reason for the project but also confirms whether the project is:

desirable (the balance of costs, benefits, and risks)

viable (able to deliver the products)

achievable (whether the use of the products is likely to result in envisaged outcomes and resulting benefits).

Business justification is not only about costs but also about understanding the value of a project. It is the perceived benefits or importance of the outcomes in proportion to the resources deployed to achieve them. Moreover, business justification selects an approach that offers the best overall value.

It is a PRINCE2 principle that a project must ensure continued business justification.

This requires that the business justification is established at the beginning of the project by creating a business case and then kept under regular review and updated in response to the decisions and events that might impact the project’s desirability, viability, or achievability.

The project should be stopped or changed if the business justification is invalid.

PRINCE2 7th Edition Business Case Evolution

The business case is developed as an outline at the start of a project based on information provided in the project mandate. It must 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 need to be sufficiently understood at this point to provide a robust justification for 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 more precise, the outline business case is developed into a more detailed one. 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 evolution from the project mandate to the project brief and the (full) business case is shown below:

The Prince2 7Th Edition Business Case

The business case may also undergo further refinement as the project progresses across stages as actual costs are incurred, forecast benefits are potentially achieved, and information is further understood.

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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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