Learning Objective 04 Business Case Flashcards
This section will enable you to gain an understanding of the business case as providing justification for undertaking a project, programme or portfolio. It evaluates the benefit, cost and risk of alternative options and provides a rationale for the preferred solution.
What is a business case?
Justification for the initiation, investment, and/or continuation of a project in terms of benefits, costs, and risks.
What are the three main tools and techniques used to determine factors influencing a project’s business case?
PESTLE, SWOT, VUCA.
What does PESTLE stand for?
- Political
- Economic
- Sociological
- Technological
- Legal
- Environmental
What does the ‘P’ in PESTLE refer to?
Political: internal and external politics.
What does the ‘E’ in PESTLE refer to?
Economic: local, national, and international market conditions relating to project funding.
What does the ‘S’ in PESTLE refer to?
Sociological: societal impact and stakeholder support on project risk and outcome.
What does the ‘T’ in PESTLE refer to?
Technological: project’s technological requirements or the use of emerging technology.
What does the ‘L’ in PESTLE refer to?
Legal: regulatory considerations such as health and safety, employment and contract law.
What does the ‘E’ in PESTLE refer to?
Environmental: impact of the project on the environment.
What does SWOT stand for?
- Strengths
- Weaknesses
- Opportunities
- Threats
What does the ‘Strengths’ in SWOT refer to?
Organizational strengths and their influence on the project.
What does the ‘Weaknesses’ in SWOT refer to?
Organizational weaknesses and the risk they pose to the project.
What does the ‘Opportunities’ in SWOT refer to?
External elements that could be exploited by the project and the organization.
What does the ‘Threats’ in SWOT refer to?
External elements that could be problematic for the project.
What does VUCA stand for?
- Volatility
- Uncertainty
- Complexity
- Ambiguity
What does ‘Volatility’ in VUCA refer to?
Project instabilities and using this to inform estimates or identify risks.
What does ‘Uncertainty’ in VUCA refer to?
Inherent risks of the project and uncertain outcomes.
What does ‘Complexity’ in VUCA refer to?
How complex the project is and how it can be managed.
What does ‘Ambiguity’ in VUCA refer to?
Elements and risks that have not been identified and their potential impact.
What are the five elements of the Business Case?
- Strategic Context
- Economic Analysis
- Commercial Approach
- Financial Case
- Management Approach
What would be considered in the Strategic Context section of the Business Case?
The case for change, what we are doing, why and how it aligns with the wider vision, goals and objectives
What would be considered in the Economic Analysis section of the Business Case?
Economic analysis details why the business case is a good idea, in terms of return on investment, market share, sector or domain strengths, and potential courses of action.
(Note: This is different from the financial case.)
What would be considered in the Commercial Approach section of the Business Case?
Commercial approach concerns how the overall project or task will build its resources, how the supply chain will be built and how the required services will be procured.
(Route to Market)
What would be considered in the Financial Case section of the Business Case?
How the business will afford/fund the project.
Financial case deals with the internal financial resource, where the budget will come from
and how this is prioritised. It con also contain other financial details such as margin and profit
projections, or personnel forecast in terms of operating costs.
What would be considered in the Management Approach section of the Business Case?
How we will deliver the project
Management approach provides the necessary information to explain roles and responsibilities, stakeholder management and risk management, and ensures that the business case contains all the required information to set the baseline effectively.
What is the purpose of the Business Case?
Justifies investment, provides a record of decisions, ensures alignment with benefits, and serves as a starting point for the project management plan.
True or False: The business case should be reviewed periodically.
True.
Fill in the blank: The strategic context is the case for _______.
change.
Fill in the blank: Economic analysis details the return on _______.
investment.
Fill in the blank: The commercial approach concerns how the overall project will build its _______.
resources.
Fill in the blank: The financial case outlines the _______ to the organization in the agreed timeframe.
affordability.
Fill in the blank: The management approach provides information to explain roles and _______.
responsibilities.
One reason that the project could come to a close early would be if the _______.
benefits are no longer viable.
What should be examined to assess the potential impact of new government regulations on a business case?
Legal elements in the PESTLE framework.
State two tools or techniques that can be used to identify and analyze factors influencing a business case.
- VUCA
- PESTLE
- SWOT
