PRINCE2 Business Case
What is a Business Case?
A PRINCE2 business case is a component of the Project Initiation Document (PID) and lies at the heart of every PRINCE2 project. It is the key driver of all projects undertaken using the PRINCE2 method. During the project, a PRINCE2 business case is a major control document that is referenced on a regular basis to ensure and confirm that the project remains viable.
PRINCE2 business cases will contain justifications for a project, such as value for money for what is to be done and why it should be done now. The Business Case's key goal is to test the viability of the project.
How to create a Business Case
The format of a PRINCE2 business case is not prescribed in the PRINCE2 methodology and will therefore vary from company to company. However, as a guideline, the following questions should be considered:
- Why do we need to undertake this project?
- What are the business benefits?
- What are the risks?
- What are the potential costs?
- How long will the project take?
Who writes the Business Case?
Programme management often develops the detailed Business Case, but many organisations delegate this work to the Project Manager or a business analyst. Project Assurance can also assist with developing the Business Case. They can clarify things like the difference between a cash-flow forecast, a profit-and-loss account and a balance sheet.
When should you revisit the Business Case?
Because it's meant to answer the question "is the investment in this project still worthwhile", the Business Case is not static. After it's used to gain funding for the project, it should be actively maintained throughout the project and continually updated with current information on costs, risks and benefits.
This is when you should review it:
|Project Board||Project Manager|
At the end of the Starting up a Project process to authorise project initiation based on a reasonable justification and again at the end of the Initiating a Project process to authorise the project
Provided with an Exception Plan to authorise revised stages and project continuation
In tandem with any impact assessment of new or revised issues or risks
End of Each Stage
Authorise the next stage and project continuation
End of Each Stage
Determine if any costs, timescales, risks or benefits need updating
Assess the project's performance against its requirements and the likelihood the outcomes will provide the expected benefits
At the end of the project, the Business Case is then reviewed as part of the benefits review. This is usually by corporate or programme management, who determine the success of the project outcomes in realising their benefits.
Outline Business Case vs detailed Business Case
The outline Business Case is part of the Starting up a Project process. The Project Manager derives the outline Business Case from the project mandate and then submits it to the Project Board for approval. At this early stage, the costs and timescales will be estimates.
If the project is approved, the outline Business Case is refined during the Initiating a Project phase. This detailed Business Case uses the Project Plan and Risk Register along with the outline Business Case. With more detailed costs and timescales, the project could be more or less viable. The project might therefore require replanning at this point.