One of the key deliverables in the process of initiating a project managed using the PRINCE2 methodology is to create the business case document. A project in PRINCE2 is defined as ‘A management environment that is created for the purpose of delivering one or more business products according to a specified business case’.
What is a business case document? Why is it important to create one? What are the key decisions made using the business case document when initiating a project? How will the business case help in managing and controlling a project and in ensuring that the project continues to deliver business value? This article aims to address above questions.
Why create a Business Case document?
A business case is mainly used to document the justification for undertaking the project, based on the estimated cost of development and implementation against the risks and anticipated business benefits and savings to be gained. It is a justification for an investment based on the costs versus the anticipated business benefits of the solution option selected for implementation. The business case is a primary mechanism of project decision-making and is a means of assessing alternative and competing investment / solution options.
Continual assessment of project progress using the Business Case
The business case document provides a blueprint based on which project progress can be monitored by the project manager and the project board. It provides a means for continuing to assess the viability of the project. In PRINCE2, the Project Board normally reviews the business case at the project initiation stage, end of each project stage, when any exceptions arise and at stage or project closure.
The business case would be the main input to create the Project Initiation Document (PID) for the selected solution option. Some teams put a summary of the business case findings as a section in the PID document itself and use it to make an elevator pitch to the business sponsor and other senior executives of the project board. Once the project is approved, the project manager is assigned and he would create the project charter document with key inputs from the business case.
The Project Manager and the Project Board will monitor the ongoing viability of the project against the business case. At the end of each stage or iteration the relevant stakeholders will sit together, evaluate the deliverables related to both the product and the process against the expected benefits identified in the business case to ascertain whether the business value set out to achieve is being met. Decisions to get the project back on track would thus be based on the baseline intentions defined in the business case. Finally, the business case is used to assess whether benefits are achieved when the project is delivered through a post implementation review.
The business case is not a constant. It may change multiple times during the lifetime of the project. Evaluation at the end of each iteration or stage will help the project team and the project board realizes that changes are required in terms of objectives, expected business value, scope or even timelines. Hence, the initial business case may become invalid and thus be required to be updated with the consensus of the key stakeholders.
The discussion above is just an introduction to the ocean of creating business case documents. Hope this will inspire you to further dive into this ocean.
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