Chapter 6: Business Case

Question 1

What’s the purpose of the business case theme

Answer 1

Purpose is to establish the mechanisms to judge whether the project is desirable, viable and achievable as a means to support decision making in its investment

Question 2

What is an outcome in regard to business change

Answer 2

Outcomes allow the business to realise the benefits that are set out in the business justification for the project

Question 3

What is a dis benefit

Answer 3

Outcomes that are perceived as negative by one or more stakeholders are called dis-benefits

Question 4

What are PRINCE2’s requirements for business case theme

Answer 4

• create and maintain a business justification for the project; usually a business case
• Review and update the business justification in response to decisions and events that might impact desirability and achievability
• Define management actions put in place to ensure project outcomes are achieved and confirm benefits are realised
• define and document the roles and responsibilities for the business case and benefits management

Question 5

What must be produced for the business case theme?

Answer 5

• Business Case: provides costs, benefits, expected dis-benefits, risks and time scales
• Benefits management approach: defines the management actions that will be put in place to ensure that the projects outcomes are achieved

Question 6

The business case theme is central to PRINCE2 projects as it’s the heart of why a project is being done

Answer 6

The business case theme is central to PRINCE2 projects as it’s the heart of why a project is being done

Question 7

What is the outline business case and the detailed/full business case

Answer 7

In most cases, projects costs, timescale, products and risks won’t be sufficiently understood to provide a robust justification of the project.
This initial version will need further development and refinement as the project progresses

• The initial version of the business justification is called the ‘outline business case’
• The refined outline business case is described as the ‘detailed business case’ or ‘full business case’

Question 8

When must business justification be reviewed and verified

Answer 8

• At the end of the starting up a project process by the project board, to authorise project initiation
• At the end of the initiating a project process by the project board
• As part of any impact assessment by the PM of any new/ reviewed issues or risks
• As part of benefits reviews
• In tandem with an exception plan by the project board, to authorise the revised management stage
• End of management stage, to determine if costs, timescales, risks or benefits need to be updated

Question 9

Why is it advisable that the senior user comes from an area of the business impacted by the change

Answer 9

The senior user is also responsible for confirming that benefits are realised
- this many involve commitment beyond the life of the project as it’s likely that many benefits won’t be realised until after the project is closed
- for this reason, it’s advisable that the senior user comes from an area of business impacted by the change

Question 10

What does the benefits management approach ensure

Answer 10

The benefits management approach defines the management actions that will be put in place to ensure the projects outcomes are achieved and to confirm that the projects benefits are realised

It’s first created by the PM in the initiating a project process during the initiation stage & is submitted to the project board for approval when seeking project authorisation

Question 11

When should the benefits management approach be updated

Answer 11

Should be updated during each management stage with actual benefits achieved, and any updates for benefits management activities or benefits reviews

Question 12

Who is benefits management approach managed by

Answer 12

May be managed by the project, by corporate, programme management or by the customer & is likely to be managed beyond the life of the project.

Question 13

Any benefits that can be measured during the life of a project should be confirmed by the senior user for formal reporting by the project manager in the end stage reports and project closure report

Answer 13

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Question 14

What does post project benefits review involve?

Answer 14

Post project benefits review involves corporate, programme management or the customer holding the senior user to account by asking them to provide evidence of how the individual benefits allocated to them have been gained in comparison with those benefits promised to justify the cost & risk of the project when it was authorised.

Question 15

Post project benefits reviews also review the performance of the project product in operational use and identify whether there have been any side effects that may provide lessons for the other projects

Answer 15

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Question 16

What is the responsibility of:
- corporate, programme management or customer
- Executive
- Senior user(s)
- Senior Supplier(s)
- Project manager
- Project assurance
- Project support

Answer 16

Corporate, programme management or customer
- provide mandate and define any standards for business case
- hold senior users accountable for realising post project benefits

Executive
- Accountable for business case during the project

Senior user(s)
- Specifying the benefits upon which business case is approved

Senior supplier(s)
- Confirm products required can be delivered within cost and viability

Project Manager
- Develop business case and benefits management approach

Project assurance
- Monitor business case against external events and project progress

Project support
- Advise PM of any proposed/ actual changes to products that affect the business

Question 17

By default, the executive is responsible for ensuring the benefits reviews are planned and executed, but there are circumstances where this may not always be the case

• For projects in a programme environment, the projects benefits management approach may be produced & executed by the programme p
• For post project measurement activities, the responsibility for benefits reviews will transfer from the executive to corporate, programme management or the customer as the project closes

Answer 17

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Question 18

A problem that commonly occurs is that projects are often successful from a delivery perspective, but fail from an investment perspective
- the link from the projects outputs to outcomes and benefits needs to be clearly identifies and made visible to those involved in the project, otherwise there is a danger that the original purpose of the project plans can get lost and benefits won’t be realised

Answer 18

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Question 19

Info regarding customer and supplier business case

Answer 19

The business case for a customers project is separate from a suppliers business case for bidding for & working on that customers project

A supplier would have to ensure it will benefit from the work it undertakes on the project

Question 20

How does a project within a programme affect business case

Answer 20

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

Question 21

Give some examples of investment appraisal techniques

Answer 21

Whole life costs
- analysing total costs of implementation and any incremental transitional, operational and maintenance costs

Return on investment (ROI)
- profits/ savings resulting from investments expressed as a percentage of initial investment

Question 22

Info regarding projects using agile approach

Answer 22

An agile approach may require more information on the tolerances around benefits with respect to priorities, timescales, and how much if the scope will be delivered in the product