Practice: Business Case Flashcards
The project executive has decided to treat stage 2 as a separate feasibility project with its own business case. The output from this project will be high-level requirements and a recommended option. The project manager has documented the following benefit in the business case for the Feasibility Study Project. “A 10% increase in the donations received from existing individual donors and donor organizations.”
Is documenting this as a benefit of the Feasibility Study Project an appropriate application of the �business case� practice, and why?
No, because the output of the Feasibility Study Project will be a recommended option that will not result in the outcomes to realized the stated benefit
Here are three statements relating to the business case for the project.
Under which heading of the business case (A-E) should the statements be recorded? Choose only ONE heading for each statement. Each heading can be used once, more than once, or not at all.
Options: 1. Reasons, 2. Business options, 3. Time, 4. Costs, 5. Major Risks
A, The project is at the end of stage 2 and, after a review , it is now anticipated there will be a one month delay. The Project will now take 7 Months to complete - Time
B. There has been an increase in reported incidents relating to discrimination against the homeless and refugees - Reasons
C. Funding will be a mix of both public sector and private sector donations - Costs
During the ‘starting up a project’ process, the project executive decided that it would waste time and effort to produce a business case during stage 1. This is because the project team will not have enough information to determine whether the multi-channel campaign is desirable, viable and achievable until the options analysis has been completed during stage 2.
Is this an appropriate application of the �business case� practice, and why?
No, because the project executive should establish the business justification for the Campaign against Discrimination Project in the initiation stage.
Business Case Reasons
Describes the situation faced, links to the ‘Project mandate’
Business Case Business Options
Possibly solutions to the problem to be solved or opportunity to be exploited
Business Case Benefits & Dis-benefits
Improved situations after the project (Expected Benefits)
Business Case Sustainability Targets
Linking to one of the seven aspects of project performance, including ‘ESG targets’
Business Case Time
- Duration of the project
- Time period over which benefits will be realized
Business Case Costs
- Project Costs
- Running Costs
- Funding arrangements
Business Case Investment Appraisal
See ‘ Supporting techniques’. Example
> whole life costs
> net benefits
> return on investment (ROI)
> payback
> Net present value (NPV)
> internal rate of return (IRR)
> Options analysis
Business Case Major Risks
Key threats and opportunities faced, their likely impact and responses
PRINCE2 includes 15 management products that are used to manage the project. The management products specific to the business case practice are described here.
- Management product: Project brief
- Management product: Business Case
- Management product: Benefits management approach
- Management product: Sustainability management approach
7 Aspects of project performance
- Benefits
- Time
- Cost
- Quality
- Scope
- Sustainability
- Risk
Management product: Sustainability management approach
Purpose
The purpose of the sustainability management approach is to define the actions, reviews, and controls that will be established to ensure that sustainability performance targets for the project are achieved.
High-level content
Scope: describes what sustainability targets are to be managed and measured
Measurement: describes how to measure achievement of sustainability targets, when they can be measured, and the baseline measures from which targets will be calculated
Responsibilities: defines responsibilities for sustainability activities, including who is accountable for measuring the achievement of the sustainability targets
Resources: for the sustainability management activities, for example, to undertake studies
Supporting tools and techniques: for the sustainability management activities
Standards: any standards which apply to sustainability management
References: for any associated documents or products
Management product: Project brief
Purpose
The purpose of the benefits management approach is to define the benefits management actions and benefits reviews that will be established to ensure that the project�s outcomes are achieved and to confirm that the project�s benefits are realized.
High-level content
Scope: describes what benefits are to be managed and measured
Benefits realization procedures: describes what management actions are required to ensure that the project�s outcomes are achieved (This should include arrangements for benefits realization activities to be undertaken by the business layer after the project has closed. For example, preparing and handing over a benefits realization plan.)
Benefits measurement: describes how to measure achievement of expected benefits, when they can be measured, and the baseline measures from which the improvements will be calculated
Benefits tolerance guidance: Provides additional guidance to the benefits tolerance levels defined for the project in the business case
Product performance: describes how the performance of the project product will be reviewed
Responsibilities: defines the responsibilities for business case activities, including who is accountable for the expected benefits
Resources: for the benefit management activities, for example, to undertake studies
Supporting tools and techniques: for the benefit management activities, for example, use of a simulator
Standards: any standards which apply to benefit measures
References: for any associated documents or products.
Management product: Business Case
Purpose
The purpose of the benefits management approach is to define the benefits management actions and benefits reviews that will be established to ensure that the project�s outcomes are achieved and to confirm that the project�s benefits are realized.
High-level content
Scope: describes what benefits are to be managed and measured
Benefits realization procedures: describes what management actions are required to ensure that the project�s outcomes are achieved (This should include arrangements for benefits realization activities to be undertaken by the business layer after the project has closed. For example, preparing and handing over a benefits realization plan.)
Benefits measurement: describes how to measure achievement of expected benefits, when they can be measured, and the baseline measures from which the improvements will be calculated
Benefits tolerance guidance: Provides additional guidance to the benefits tolerance levels defined for the project in the business case
Product performance: describes how the performance of the project product will be reviewed
Responsibilities: defines the responsibilities for business case activities, including who is accountable for the expected benefits
Resources: for the benefit management activities, for example, to undertake studies
Supporting tools and techniques: for the benefit management activities, for example, use of a simulator
Standards: any standards which apply to benefit measures
References: for any associated documents or products.
Management product: Benefits management approach
Purpose
The purpose of the benefits management approach is to define the benefits management actions and benefits reviews that will be established to ensure that the project�s outcomes are achieved and to confirm that the project�s benefits are realized.
High-level content
Scope: describes what benefits are to be managed and measured
Benefits realization procedures: describes what management actions are required to ensure that the project�s outcomes are achieved (This should include arrangements for benefits realization activities to be undertaken by the business layer after the project has closed. For example, preparing and handing over a benefits realization plan.)
Benefits measurement: describes how to measure achievement of expected benefits, when they can be measured, and the baseline measures from which the improvements will be calculated
Benefits tolerance guidance: Provides additional guidance to the benefits tolerance levels defined for the project in the business case
Product performance: describes how the performance of the project product will be reviewed
Responsibilities: defines the responsibilities for business case activities, including who is accountable for the expected benefits
Resources: for the benefit management activities, for example, to undertake studies
Supporting tools and techniques: for the benefit management activities, for example, use of a simulator
Standards: any standards which apply to benefit measures
References: for any associated documents or products.
Applying the business case practice
- Organizational context - The outline business case could come form programme level
- Commercial context - The customer and supplier would each need their own business cases
- Delivery method context - How the business case might look in, e.g. an iterative incremental situation
- Sustainability context - Investment appraisal supporting techniques based on cashable benefits, costs and risks are less applicable
- Scale context - the business case will range in sized and formality for small to large projects
Statement: Advise the project manager of any proposed, or actual, changes to products that affect the business case
Role: Project Assurance
Statement: Ensures the project produces products capable of achieving the outcomes
Role: Senior User
Statement: Develop the benefits management approach and sustainability management approach under the delegated authority of the Project Executive
Role: Project Manager
Statement: Holds the senior user to account for benefits realization post project
Role: Business Layer
Statement: Advise the project manager of any proposed, or actual, changes to products that affect the business case
Role: Project support
Statement: Oversees the development of a viable business case
Role: Project Executive
