Does yours measure up?
PRINCE2 Business Case – Background
A significant amount of attention in the three best management practice methods of MoP, MSP and PRINCE2 is on the need for continued business justification and strategic alignment at portfolio, program and project level. Business cases play a crucial role in determining that this is the case. In using PRINCE2 for example the Business Case is used to justify the setting up and continuation of the project. PRINCE2 states the Business Case must drive the project. If a satisfactory Business Case does not exist we should question whether a project should be started. If a Business Case is valid at the start of a project, but the justification disappears once the project is underway, then we need to consider whether the project should be stopped. The PRINCE2 Business Case should be
regularly reviewed and updated – at least at the end of each stage of the project thus demonstrating ongoing justification.
Continued Business Justification and strategic alignment
Given the recent economic turmoil the role of the Business Case is coming even more into play. In the past I’ve often seen projects that have been initiated on a good idea without demonstrating the business justification or alignment with the strategic objectives of the organisation. As practitioners we need to get this right for our programs and projects. The Better Business Cases methodology complements PRINCE2 and can be used to develop sound spending proposals For projects already in existence there will be a need to confirm the business justification for the continuation of the project. We need therefore to continually ask the question – do we need to review and update our Business Case? It may well be that there have been changes to our projected costs. These may have changed significantly and these changes need to be reflected in the Business Case. Changes in the value of property, changes in interest rates and exchange rates can all have a significant impact on our costs and need to be updated to reflect the current position. The assumptions that we made both in terms of costs and benefits need to be reviewed to see whether they are still appropriate. On a large project, its amazing how much even a small change in the interest rate can have on the overall justification for the project. Have we assumed certain income streams from property sales to fund the project? Are these still consistent with the current value of property?
PRINCE2 Business Case Review
As we’ve already mentioned, the PRINCE2 Business Case should be regularly reviewed and updated – at least at the end of each stage. We are now operating in a volatile environment where circumstances can change dramatically within a short time. PRINCE2’s advice and guidance on business case review and updating therefore comes into its own at this time. The PRINCE2 Business Case contents are a useful starting point for reviewing our Business Case:
- Has there been any change in the reasons for the project ?
- Has the strategic direction or business strategy of the organisation changed as a result of current circumstances?
- What impact does this have on the project?
- Has there been a change with regard to the do nothing option as a result of recent events?
- Has there been any change to the way in which we see the project being delivered?
- If we are using external suppliers are they still capable of delivering the project?
- Have the benefits expected as a result of successful delivery changed as a result of increased costs or reduced
- financial gain? Are they still measurable? Achievable?
- Is the project more exposed to risk now? Have new risks been identified and do any of them have a significant
- impact on the financial aspects of the project or achieving the benefits.
Costs and Timescale
- Has there been any changes to the overall costs to the project and to the overall timescale for delivery?
- Does this still stack up and support the continuation of the project ?
- All of this can only support the program business case and the alignment with the strategic objectives of the organisation through the portfolio. In these times of change its worth a thought !!
So how does your PRINCE2 Business Case measure up?