Prince2: Business Case Theme
The purpose of this theme is to establish mechanisms to judge a project’s vability.
Prince2 Business Case Approach
- Develop: Getting the right information upon which decisions can be formed
- Verify: Assess whether the project is still viable
- Maintain: Update with actual costs/benefits and current forecasts for costs/benefits
- Confirm: Assess if intended benefits had been realised or will be.
- Prove by selecting objective measures that realiably prove benefits.
- Quantify by collecting baseline measurables.
- Decide how, when and by whom the benefit measures will be collected.
- Reasons should show why the project outcome is needed! The event that triggered the project.
- Reasons are linkely to be defined in the Project Mandate.
Understanding Business Options
- Do you start the project, no nothing, do something else. These are business options for the project.
- Option to do nothing is always considered as a starting point to act as comparison for other options.
- Business Options should not be confused with the Project Approach to Delivery. These will be documented in the Project Brief, not the Business Case.
Understanding Expected Benefits
- Wherever possible benefits should be expressed in tangible ways.
- An Expected Benefit should be measurable
- Aligned to corporate objectives
- Quantified with tolerance
- Mapped from the outputs and outcomes provided by the project.This aids decision making in the planning and control of the project
Outputs, outcomes and benefits
- A project output is any specialist product whether tangible or intangible.
- A outcome is the result of the change derived from using the projects outputs
- A benefit as a measurable improvement perceived as an advantage by stakeholders.
Understanding Expected Dis-Benefits
- A Dis-Benefit is a negative consequence of what will happen if the the project goes ahead. They are actual consequences of the activity where a risk has some uncertainty
- A threat to an Expected Benefit should not be listed as a Dis-Benefit.
- When Benefits are expected to be achieved these should be listed under Timescales.
- When Product Delivery is expected should also be listed here.
- It shows the period that the project costs will incurred
- The period that cost/benefit analysis will be based.
- The ealiest/latest feasible start date
- The earlies/latest feasible completion date
The Business Case should summarize the costs derived from the Project Plan, together with the assumptions upon which they are based.
Any change to the cost of the project will affect the the project’s viability.
- Funding arrangements should be listed here.
- External product costs should not be included as they are not within the scope of the project.
- Total forcasts
- Allocated Tolerance
- Risk Budget
- Change Budgets
- Through life costs
- Net Benefits
- Return on Investment (ROI)
- Payback period
- Discounted cash flow
- Net present value
- Sensitivity analysis
Understanding Major Risks
- Dis-Benefits should not be confused with Risks