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PRINCE2 Foundation > 5.0 Business Case > Flashcards

5.0 Business Case Flashcards

1
Q

What is the purpose of the Business Case theme?

A

To establish mechanisms to judge whether the project is (and remains) DESIRABLE, VIABLE and ACHIEVABLE as a means to support decision-making in its (continued) investment.

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2
Q

The Outline Business Case is developed in the __________ process and refined by the __________ process.

A

Starting Up a Project

Initiating a Project

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3
Q

The Business Case is approved and reaffirmed through the __________ process.

A

Directing a Project

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4
Q

The Business Case is used by the ___________ process when assessing impacts of issues and risks.

A

Controlling a Stage

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5
Q

When is the Business Case revised and updated and through which process(es)?

A

At the end of each management stage (through the Managing a Stage Boundary process)

At the end of the project (through the Closing a Project process)

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6
Q

Who is responsible for specifying the benefits?

A 
benefits (and realising them through the use of the products provided)
Senior User(s)
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7
Q

The Executive is responsible for ensuring that benefits provided by the Senior User…

A
  • represent value for money
  • are aligned with corporate, programme management or customer objectives
  • can be realised
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8
Q

If the business justification for a project ceases to be valid…

A

the Executive must stop or change the project following review by the Project Board

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9
Q

Key Term: Desirable

A

The balance of costs, benefits and risks

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10
Q

Key Term: Viable

A

That you are actually able to deliver the products

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11
Q

Key Term: Achievable

A

Whether use of the products is likely to result in envisaged outcomes and resulting benefits

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12
Q

Key Term: Outputs

A

A specialist product that is handed over to a user(s)

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13
Q

Key Term: Outcomes

A

The result of change, normally affecting real-world behaviour and/or circumstances

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14
Q

Key Term: Benefits

A

The measurable improvement resulting from an outcome perceived as an advantage

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15
Q

Who is accountable for the Business Case for the duration of the project?

A

Executive

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16
Q

Who is responsible for realising the benefits through the use of the products provided?

A

Senior User(s)

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17
Q

Who provides the Project Mandate?

A

Corporate, programme management or the customer

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18
Q

Who holds the Senior User(s) to account for realising the post-project benefits enabled by the project’s products?

A

Corporate, programme management or the customer

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19
Q

Who is accountable for the benefits management?

A

Either Executive or corporate, programme management or the customer

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20
Q

Who oversees the development of a viable business case?

A

Executive

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21
Q

Who secures the funding for the project?

A

Executive

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22
Q

Who ensures the project is aligned with corporate, programme management or customer strategies?

A

Executive / Project Assurance

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23
Q

Who confirms that the products required can be delivered within the expected costs and are viable?

A

Senior Supplier(s)

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24
Q

Who is responsible for development of the Business Case and Benefits Management Approach?

A

Project Manager

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25
Q

Who should advise the Project Manager of any proposed or actual changes to products that affect the Business Case?

A

Project Support

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26
Q

Who verifies and monitors the Business Case against external events and project progress?

A

Project Assurance

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27
Q

Who monitors project finance on behalf of corporate, programme management or the customer?

A

Project Assurance

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28
Q

Who monitors changes to the project plan to identify any impact on the needs of the business or the Business Case?

A

Project Assurance

29
Q

Who reviews the impact assessment of potential changes on the Business Case and project plan?

A

Project Assurance

30
Q

Who assesses and reports on project performance at project closure?

A

Project Manager

31
Q

Who assesses and updates the Business Case and Benefits Management Approach at the end of each management stage?

A

Project Manager

32
Q

Who reviews the impact of issues and rusks on the continued viability of the Business Case?

A

Project Manager

33
Q

Which 2 products are produced and maintained for the Business Case theme?

A

Business Case

Benefits Management Approach

34
Q

A Business Case is used to document the ___________ for undertaking a project

A

business justification

35
Q

PRINCE2 projects deliver outputs in the form of _______, the use of which results in changes in the business. These changes are called ________.

A

products

outcomes

36
Q

What does the Business Case provide?

A

The costs, benefits, expected dis-benefits, risks and timescales against which viability is justified and continuing viability is tested

37
Q

What does the Benefits Management Approach define?

A

The management actions that will be put in place to ensure that the project’s outcomes are achieved and confirm that the project’s benefits are realised

38
Q

PRINCE2’s requirements for the business case - what must a project do as a minimum to be following PRINCE2?

A
  1. Create & maintain a business justification
  2. Review & update the business justification
  3. Define the management actions
  4. Define & document the roles & responsibilities
39
Q

An initial version of the business justification should be derived from which document as part ofd which process?

A

Project Mandate

Starting Up a Project

40
Q

What is the business justification document produced in the Starting Up a Project process?
Who is responsible for this?

A

Project Mandate > brief with outline business case

Executive is responsible

41
Q

What is the business justification document produced in the Initiating a Project process?
Who is responsible for this?

A

Project Brief > PID with full/detailed business case, benefits management approach and development path

Project Manager is responsible

42
Q

What is the business justification document produced in the Managing a Stage Boundary process?
Who is responsible for this?

A

Updated PID with updated business case

Project Manager is responsible

43
Q

What is the business justification document produced in the Controlling a Stage process?
Who is responsible for this?

A

Impact analysis of risk and issues

Project Manager is responsible

44
Q

Role of the SUPPLIER

A

Viability (project costs)

The supply-side (Supplier) has to be confident that the project is VIABLE - it can be done with the skills, technology, time and budget available

45
Q

Role of the PROJECT EXECUTIVE

A

Desirability (represents major risks)

The project Executive has a business perspective and needs to be sure the project has a strategic fit and is DESIRABLE from a financial perspective

46
Q

Role of the USER

A

Achievability (benefits)

The user has to be satisfied that the outputs delivered will be fit for purpose of ACHIEVING new ways of working resulting in the desired measurable improvements in service (the benefits)

47
Q

The business justification must be reviewed and verified at what points in the project?

A
  • end of the Starting Up a Project process (Project Board)
  • end of the Initiating a Project process (Project Board)
  • as part of any impact assessment (Project Manager)
  • in tandem with an Exception Plan (Project Board)
  • at the end of each management stage (Project Manager & Project Board)
  • during the final management stage (Project Manager)
  • as part of benefits reviews (possibly by corporate, programme management or the customer)
48
Q

Business Case evolution: Develop

A

Getting the right information upon which the decisions can be made

49
Q

Business Case evolution: Verify

A

Assessing whether the project is (still) worthwhile

50
Q

Business Case evolution: Maintain

A

Keeping the business justification updated with actual costs and benefits and with current forecasts for costs and benefits

51
Q

Business Case evolution: Confirm

A

Assessing whether the intended benefits have (or will be) realised. Confirming benefits will mostly take place post-project, although benefits may be realised during the project

52
Q

Benefits Management: What are project outputs?

A

Any of the project’s specialist products (created, tested and approved in managing product delivery)

53
Q

Benefits Management: Change

A

Change leads to Desired Outcomes or Unpredicted Side Effects

54
Q

Benefits Management: What are Unpredicted Side Effects?

A

Negative consequences as a result of change

55
Q

Benefits Management: What are dis-benefits?

A

The measurable negative impact resulting from an outcome that is perceived as a disadvantage by one or more stakeholders

56
Q

Benefits Management: What are desired outcomes?

A

An outcome is the result of the change derived from using the outputs, usually post project (but some benefits may accrue if adopting an incremental approach)

57
Q

Benefits Management: What is a benefit?

A

The measurable improvement resulting from an outcome that is perceived as an advantage by one or more stakeholders

58
Q

Business case of a project within a programme

A

If the project is part of a programme, the programme will typically define both the approach to Business Case development and provide an outline Business Case for the project

59
Q

What are the investment appraisal techniques

A
  • discounted cash flow
  • whole-life costs
  • net benefits
  • net present value
  • return on investment (ROI)
  • payback period
  • sensitivity analysis
60
Q

Investment appraisal techniques: discounted cash flow

A

A means of expressing future benefits based on the current value of money. Sometimes discounted cash flows include risk adjustments as the business may not be confident that all the benefits will be achieved

61
Q

Investment appraisal techniques: whole-life costs

A

Analysing the total cost of implementation and any incremental transitional, operational and maintenance costs

62
Q

Investment appraisal techniques: net benefits

A

Analysing the total value of the benefits less the cost of implementation, transition and ongoing operation, calculated over a defined period

63
Q

Investment appraisal techniques: net present value

A

The total value of discounted cash inflows less the initial investment

64
Q

Investment appraisal techniques: return on investment (ROI)

A

Profits or savings resulting from investments expressed as a percentage of the initial investment

65
Q

Investment appraisal techniques: payback period

A

A calculation of the period of time required for the ROI to repay the sum of the original investment

66
Q

Investment appraisal techniques: sensitivity analysis

A

Adjusting the input factors (e.g. project costs, timescale, quality, scope, project risks) to model the point at which the output factors (e.g. operations & maintenance costs, business benefits, business risks) no longer justify the investment

E.g. a project might be worthwhile if it can be done in 4 months but ceases to be worthwhile if it were to take 6 months

67
Q

Business cases are based on ________ forecasts.

A

uncertain

68
Q

What is the purpose of the Benefits Management Approach?

A

To provide a schedule for measuring the achievement of benefits

69
Q

What is an output?

A

Any of the projects specialist products

PRINCE2 Foundation (17 decks)

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