Business case Flashcards
What is the purpose of the Business Case?
To establish mechanisms for judging whether the project is and remains desirable, viable, and achievable, supporting decisions on investments.
Why do organizations undertake projects?
To realize measurable improvements (benefits), including meeting regulatory requirements, which could have a measurable cost if not achieved.
Examples of output, outcome, and benefits.
Output: New sales system. Outcome: Sales orders processed more quickly and accurately. Benefits: 10% cost reduction, 15% increase in sales orders, 10% annual revenue increase.
What should the business justification confirm in a project?
That the project is desirable (balance of costs, benefits, risks), viable (capable of producing outputs), and achievable (likelihood of achieving the anticipated outcomes and resulting benefits).
Who is responsible for specifying and realizing benefits?
The Senior User specifies benefits; the Executive ensures these benefits provide value for money, align with business objectives, and are achievable.
What is the principle of continued business justification?
The business justification must be regularly reviewed and updated. If it loses validity, the Executive must decide whether to stop or change the project, after a review by the project board.
What is the relationship between output, outcome, and benefits?
Project outputs lead to business changes (outcomes) that enable the realization of the benefits outlined in the business case. They can also produce side-effects and consequences.
What are the minimum requirements for the Business Case?
To create and maintain a business justification (usually a business case), review and update the justification in response to decisions and events, define management actions to achieve the project’s outcomes and confirm benefits, and define roles and responsibilities for the business case and benefits management.
What are the two products required by PRINCE2 for the Business Case theme?
The Business Case (providing costs, benefits, expected dis-benefits, risks, and timescales) and the Benefits Management Approach (defining management actions to ensure the project’s outcomes are achieved and benefits confirmed).
When is the Business Case developed?
At the beginning of the project. It is reviewed and updated throughout the project’s life cycle and formally verified by the project board at key decision points.
What are the key phases of the Business Case?
Develop (getting the right information), Verify (assessing if the project is still worthwhile), Maintain (updating the business justification with actual and forecast costs and benefits), Confirm (assessing if the anticipated benefits have been or will be realized).
How is the Business Case used in assessing the impact of risks, issues, and changes?
The Business Case is central to any impact assessment by asking: “How will this risk, issue, or change affect the viability of the business case and the business objectives and benefits being sought?”
Who is responsible for producing and approving the business justification?
The Executive is accountable for ensuring that the business justification is produced and approved. This responsibility can be delegated (for example, to the project manager).
How is the business justification developed?
It can be developed by the designated individual, ensuring they possess necessary business skills. If the project is part of a program, it may be provided with the project brief.
How is the initial version of the business justification created?
Derived from the project mandate as part of the starting-up a project process, typically documented in a formal business case. It must be approved by the project board to initiate the project.
What happens to the business justification during the progression of the project?
The initial version requires further development and refinement as the project progresses and a better understanding of costs, timescales, products, and risks is gained.
What is the “detailed business case”?
It is a more in-depth and complete version of the initial business justification, developed during the initiating a project process. This document provides detailed analyses of costs, timescales, products, and risks, and is continuously refined and updated during the project management stages.
What should the business justification for a project include?
Not only the costs of developing the products but also any changes to operational costs post-project. Most organizations have policies on how these costs should be accounted for in business justifications.
When should the business justification be reviewed and verified?
At the end of the starting up a project process by the project board, at the end of the initiating a project process, as part of any impact assessment of new or revised issues or risks, and in tandem with an exception plan.
How is the business justification managed during the project management stages?
It is reviewed at the end of each management stage by the project manager and the project board, to update costs, timescales, risks, and benefits, and to authorize the next management stage and the continuation of the project.
What is the role of the business justification in the final management stage?
During the final management stage, the project manager assesses the project’s performance against its requirements and the likelihood that the outcomes will provide the expected benefits.
