Practices | Business Case Flashcards
Chapter 5
The Business Case is for ….
Helping to assess whether the project is (and remains):
desirable (cost benefit)
viable (deliverable)
achievable (will the outcomes be realised)
and to support decision-making in its continued investment.
The outputs to benefits chain ….
Outputs
(deliver) Capabilities
(Embed) Outcomes
(measured by) Benefit/Dis-Benefits AND (lead to) Business Objectives
The outputs to benefits chain definitions are …
Output: the tangible or intangible deliverable of an activity.
Capability: completed set of project outputs required to deliver an outcome.
Outcome: the result of change, normally affecting real-world behaviour and circumstances.
Benefit: the measurable improvement resulting from an outcome.
Dis-benefit: the measurable decline resulting from a negative outcome.
Business objective: the measurable outcomes that demonstrate progress in relation to the organization’s strategy.
Outcomes must align with …
Business goals
(Visibility of the link from outputs to outcomes and benefits is crucial)
Business Case evolution steps ….
- Project mandate (biusiness sets need)
- Project Brief (outline)
- Initial Business Case (sufficient detail for authorisation)
- Full Business Case (detailed costs, timelines, products, risks, targets etc)
Business case tolerances include …
Benefits tolerance: deviation in the benefit performance targets allowed (Min allowed vs average).
Sustainability tolerance: deviation in the sustainability performance targets allowed (ESG).
Business justification is a combination of …
All SEVEN project performance targets (see intro)
Trade offs
Then above (cost vs benefits, outcomes, risks etc)
Business case management stages …
Develop
Check
Maintain
Confirm
Business Case Management | Develop
PROJECT MANDATE STAGE:
Do Nothing Differently: Baseline for quantifying other options.
Do the Minimum: Minimal investment for basic outcomes.
Do More Than the Minimum: Enhanced benefits but higher investment.
Business Case Management | Check
PM should do …
Continuous Assessment (for viability)
Business Case Refinement
Project Board Checks
Checking Expected Benefits
Business Case Management | Maintain
End of each stage, PM to …
Update business case
Version control
Business Case Management | Confirm
Post-Project Benefits Review of:
Outcomes, outputs, benefits
Investment appraisal techniques
Whole life
Net benefits
ROI
Payback
Net Present Value (NPV)
Internal Rate Return (IRR)
Options Analysis
Sensitivity Analysis
Multi-case model (more rounded view)
Strategic perspective
Economic perspective
Financial Perspective
Implementation and commercial perspective
Benefit scenario statements …
Best
Expected
Worst
