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PRINCE2 - What a Business (Case)!

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Written by Mike – Tue 15 Jan 2013

The Business Case in PRINCE2® is the document against which all decisions are ultimately made. It provides the decision makers (Project Board) in the project with a clear picture of what the project is set to deliver, how much it is all going to cost, how long it will take, and an analysis of when the expected benefits will come on stream.

 So why is this any different to any other project that we already undertake? For example at home; if we are considering enlarging our living accommodation we, first of all, have to gain a common understanding of why we need to do it ... to have good REASONS

Once that is agreed and decided there are several options that may be available to us...

  • We could “do nothing”
  • We could move to a larger house
  • We could build an extension on side of the existing house
  • We could grow into the loft
  • We could adapt the existing room layout

Each of these OPTIONS would, of course, have different costs and timescales attached to them... but we would consider them all, and decide which of them could be discounted and capture why that decision was made. We may be left with a couple of alternatives which need further investigation, but eventually, we come to a decision on the way forward... and that is our chosen OPTION.

Learn more about the Business Case in PRINCE2 on our PRINCE2 Foundation and PRINCE2 Practitioner Training Courses. One of our most popular training methods is applying PRINCE2 to everyday examples to help you understand them and pass your exam!

In a project such as the above, the costing and timescale would almost certainly have been supplied by a builder and their associated trades, and all of these costs added together will form the basis of the COST heading in our Business Case. Equally the overall timescale from their various trades will equate to the TIMESCALE  heading in our Business case. It should be noted here that the builder (and other trades) are all in business to make a profit, and therefore they will all have their own Business Case... our focus is on OUR Business Case.

We should not even consider the project unless we anticipate gaining some BENEFITS from it. This may be increased living space, increased resale value of the property, delaying the requirement to move etc. and each of these benefits should have a quantifiable value attached to them so that we can keep track of what we hope to achieve. Of course, we can’t be sure that these benefits are accurate, after all, they are a prediction of the future, but they are an indicator that we can use constantly to check whether the benefits will outweigh the costs.

There are always likely to be downsides to doing any project, and these are captured as DISBENEFITS in a PRINCE2 environment. These are things stakeholders say will happen if the project goes ahead. If we extend the house, then the dirt and disruption caused by the building work would be a disbenefit.

Read our other recent PRINCE2 posts on Work Packages in PRINCE2 and Getting Work Done with PRINCE2.

Along with things that it is deemed will happen (disbenefits), there will be other things which are more uncertain, and these are captured under the MAJOR RISKS heading. This is intended to capture risks that are likely to affect the costs, timescale or benefits – i.e. these are the major risks that will have an impact on the Business Case. Major risks in the extension project might relate to the housing market remaining buoyant, the cost of materials not rising, new legislation regarding development etc.

Last, of all we need to consider an INVESTMENT APPRAISAL which looks at the best case and worst case scenarios. What if the prices go up by 20%... what if the housing market drops by 15% ... what if the timescales are protracted .... with a balanced view of the status of the business case for each situation. Of course, we plan against the costs, timescales and benefits as declared, but the decision makers need to understand how risky the project is.

So there is no difference between PRINCE2’s approach to a business case and how most people approach a project in their domestic environment. Clearly, if you are looking to extend your house then there will be a significant amount of paperwork involved to support the project, but if it is a smaller project, such as decorating a room, then the paperwork would typically be substantially less but the process involved would be exactly the same. This is where Tailoring comes into its own.

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