Lesson 17: Business Case Theme, Minimum Requirements

Each theme has specific minimum requirements in PRINCE2® that you must have. The rest depends on you and the way you’re going to tailor PRINCE2 for your project. So, what do you think would be the minimums necessary for this theme?

Based on AXELOS PRINCE2^® material. Reproduced under licence from AXELOS. All rights reserved.
Note: PRINCE2 2017 edition is now called PRINCE2 6th edition.

00:09 – PRINCE2 has outlined a number of items that each project should be doing from a Business Case theme point of view
00:16 – Therefore, this section is called the Business Case Theme minimum requirements
00:21 – You will also see how the Business Case is used in a project
00:26 – Let’s jump back to the IP process for a second
00:29 – So the purpose of the IP process is to establish a solid foundation for the project
00:35 – And this solid foundation produces the documents; a Project Plan, a Business Case, the Benefits Approach document, and information on controlling a project
00:45 – And this is all put together in one package we call the PID
00:49 – So that’s where the Business Case, the full Business Case document first appears
00:54 – Now let’s jump back to the SU process
00:57 – So, during the starting of a project process, the outline Business Case is created by the executive
01:03 – And the input for this will be the Project Mandate
01:08 – And also some information can come from the Project Approach
01:12 – It is then refined in the Initiation Stage, which we have just discussed, and becomes the full Business Case document
01:19 – The Project Board then will approve and check the Business Case every time they have to make a decision
01:27 – During the stages, the Business Case is considered when evaluating each issue and risk
01:33 – For example, the Project Manager will ask, “What impact will this issue have on the Business Case?”
01:40 – The Business Case document as well is a minimum requirement because you must provide a document to show a business justification
01:47 – However, each organization can have their own format
01:51 – So, I’ll just go through some of the options
01:53 – So, some companies might use an executive summary, they should be using reasons for the project because this gives good information
02:01 – The benefits as well should be a must, but not all Business Cases I have seen include dis-benefits
02:08 – Time, cost and return on investment should be a must because this is important data for a Business Case
02:14 – And the different approach options; this is not always documented, but it’s good to know the different approaches that were considered for each project and why one was chosen, so why one and not the other
02:28 – A list of major risks is also a must or should also be a must, but again not always included
02:34 – So that’s an overview, let’s say, of the main headings we might find in a Business Case document
02:40 – This is a simple example taken from a sample project which I have done called the U2 Driving School
02:48 – And you can find on the Internet, just search on Google for U2 Driving School
02:53 – This example makes it much clearer and easier to explain, and also easier for you to understand them
02:59 – So we have the executive summary, so you see here this is a very, very short statement on why this project from a business point of view
03:08 – The reasons? Well, these are clear and they can come from the Project Mandate document
03:14 – The options? This is a simple example of three options which I have included
03:19 – And I started with the Do Nothing, which is always a good way to start
03:22 – So what happens if we do nothing? What are the consequences then?
03:27 – So here, the consequences are we will lose 4% of our clients every year
03:31 – Okay, that’s clear, so how can we improve on that?
03:35 – The next option was a big marketing campaign, which was too costly
03:39 – And the other option was create an online driving test simulator, which is the one that was chosen
03:46 – Expected benefits, they’re also listed in there, including measurable improvements and the timeline on when we can expect these as well
03:55 – So that’s quite clear
03:58 – There’s a nice example then of the costs over a number of years and the return on investment over a number of years
04:05 – So, as you can see from this example, writing a Business Case is not that difficult, so it can be easy to do
04:12 – So there’s no reason not to do it
04:14 – The Business Case is also reviewed and updated at the end of each stage; so in the Stage Boundary Process
04:23 – As the real costs will keep changing and the Business Case document must reflect this because it’s a living document
04:30 – So for example, if the stages are costing 20% more, the last three stages are costing 20% more, then there’s a good chance that the rest of the project will also cost 20% more
04:41 – So the Business Case must be updated to reflect this
04:45 – The Business Case gets its final update in the Closing a Project process; so this is the final process of the project
04:53 – This is when we know then the full cost of the project just before the budget was switched off or slows down
05:02 – The project should also document the benefits and we use a Benefits or a document called the Benefits Management Approach, I refer to it as a Benefits Approach document
05:12 – And this is created in the Initiation Stage
05:16 – So here, the Project Manager will extract this benefit information from the senior users because they should know
05:23 – For example, the list of the expected benefits, the current status today, so we know how to compare
05:30 – And the expected benefits perhaps for the next six months over a couple of years or the next 12 months over a couple of years
05:38 – The purpose of this Benefits Approach document is to define the benefits that will be put in place to ensure that the project’s outcome are achieved
05:47 – So, help that happening; and confirm that the project’s benefits are realized
05:55 – During the Stage Boundary Process, we can check to see if some of the benefits have already been realized
06:03 – If its users are using part of the product or service from the project already
06:07 – So this happens a lot in IT projects where we deliver part of the products during the project and then it’s possible to check
06:16 – During the Closing a Project process, the Project Manager will check for benefits, if there are any,
06:23 – And plan for future benefit reviews that will take place post project, so after the project is closed
06:32 – Next, I will introduce two steps here for the Business Case
06:36 – We have Develop the Business Case and then Maintain the Business Case
06:40 – So we have covered these already, but now let’s cover them again
06:44 – So, first, develop the Business Case
06:46 – An outline Business Case is created in the starting of a project process
06:50 – This is a very, very light version of the Business Case; let’s say a half a page is sufficient here
06:55 – And then the full Business Case document is created towards the end of the Initiation Stage after we have a better idea of the costs of the project
07:05 – And this better idea on the cost will come from the Project Plan
07:09 – So, that’s develop the Business Case
07:13 – Next, maintain the Business Case
07:16 – The Business Case is updated at the end of the delivery stage
07:20 – So, as the costs, benefits and requirements are always changing
07:24 – So, we refer to this as maintaining the Business Case or keeping it up-to-date
07:30 – Now I look at something that PRINCE2 calls Verify the Business Case
07:34 – So, verify means assessing whether the project is worthwhile and still worthwhile doing from a business point of view
07:44 – This is first done at the end of the starting of a project process where the outline Business Case document is reviewed
07:53 – It is next done at the end of the Initiation Stage and there the Business Case document is reviewed for the first time
08:02 – And then from then on, at the end of each stage, the updated Business Case is reviewed
08:10 – Note, the Project Board can shut down the project anytime if the project is no viable from a business point of view
08:22 – Next we have Confirm the Benefits
08:25 – This means assessing whether the intended benefits have been or will be realized
08:33 – The benefits are outlined in the Benefits Approach document or the Benefits Management Approach document
08:39 – Confirming the benefits will mostly take place after the project is complete, so we call this post project
08:47 – So here is a quick overview now of the minimum requirements for the Business Case
08:53 – One, create and maintain a business justification for the project
08:58 – So this is usually the Business Case document
09:01 – And this is also one of the PRINCE2 principles, the PRINCE2 guidelines, so continued business justification
09:08 – Two, review and update the business justification in response to the decisions and events that might impact desirability, viability or achievability of the project
09:21 – For example, the following events will have an effect on the Business Case
09:25 – So, the costs of development is increasing or decreasing, future income expectations are going up or down,
09:33 – And the risks for the project, there may also be more or less risks
09:39 – Three, define the management actions that will be put in place to ensure that the project’s outcomes are achieved and confirm the project’s benefits are realized
09:49 – So that’s where the Benefits document comes into place
09:52 – And four, define and document the roles and responsibilities for the Business Case and the Benefits Management
10:01 – So one more comment I’d like to make here on the Business Case, and this is not a marriage proposal
10:06 – The Business Case team is central to the PRINCE2 projects as it is at the heart of why we do a project
10:13 – So, that’s the reason for the heart

Did you do the previous optional exercise of explaining the principles to your colleagues? It’s a good time now to go back, and tell them everything you know about the Business Case theme. Draw a timeline similar to what we have in the course, and use it to show the processes and products that relate to the Business Case theme.

Lesson 17: Business Case Theme, Minimum Requirements

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