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Project Business Case


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Project Business Case

  1. 1. Nader Jarmooz 2012
  2. 2. Every project is an endeavour arising as the result of a need for a new product or process; or evolution of existing product or process.The Business Case provides the justification for the project by setting out the frame work in terms of Scope, Time, and Resources, and iterate what would happen if the Project did not go ahead
  3. 3. A Project Brief states what needs to be done; the Project Plan explains how it will be carried out; and the Business Case gives the reason why, and is considered as the Project Driver.According to Portman (2009) the Business Case consists of four generic building blocks. These building blocks set out the criteria for continued testing for Project viability Project mandate Project background Project Scope Project Costs/Benefits Analysis
  4. 4. It provides the foundations for Senior Responsible Owner (SRO) and Project Sponsors to make their judgments based on estimated costs and expected benefitsIt also provides guidance for the Project Board and the Team in terms of defining the Project Goals and identifying roles and responsibilities.The Business Case underpins an initial appraisal of the business opportunity within the context of Organisational strategy.
  5. 5. a Business Case document must be produced by theProject Manager. The initial Business Case must be ashort and concise document focusing as much aspossible on factual data and realistic estimates (Young,1996).The Business Case is the product of managementactivities and efforts. It establishes mechanism to judgewhether the Project is (and remains) desirable, viableand achievable as a means to support decision makingin its (continued) investment.’
  6. 6. According to PRINCE 2 methodology it provides thejustification for the endeavour; though in other projectmanagement methodologies, the justification is aseparate activity and encompasses the business casealongside the project objectives, scope, and context(Newell and forashival, 2004).
  7. 7. The Business Case provides the vital test of viabilityand validity for the Project Board and Stakeholders tocontinue with their support and investment; whilstsetting out the project scope and its fit within theoverall context of corporate objectives and strategy.The Business Case should be written in plain English,avoiding specialised terminology as much as possible.The Business Case is central to the decisions made bythe Project Board (Smith, 2008). it can greatlyinfluence the final decision made by the sponsors.
  8. 8. • Reason for the project, and the benefits it offers• How the project offers solutions forproblems/opportunities the organisation is facing• Description of options considered, andrecommended solutions• Forecast of expected benefits• Key project risks• Identification of the required resources• estimated costs and required investments• Key dates for project start and end
  9. 9. The business case is initially a static documentcontaining information about the following:• project definition,• management organisation and project team,• internal and external communication strategy,• quality assurance,• control structures.Once the approval for a project is given, then thebusiness case becomes dynamic and the information isupdated as the project proceeds and evolves throughvarious stages
  10. 10. In PRINCE2 methodology, a viable Business Case shouldbe the driving force behind the proposed Project, andshould concentrate on customer’s business needs.Therefore a Project should not be started unless there isa compelling Business Case for it.The Business case should be checked for Projectviability throughout the Project lifecycle, and theproject should be terminated if the justification nolonger applies.
  11. 11. Business case Templates can be downloaded fromfollowing cites: reading on Business Case and PRINCE2 methodology:What is a PRINCE2® Business Case and why do you need one?
  12. 12. Michael W. Newell, Marina N. Grashina, 2004, TheProject Management Question and Answer Book, NewYork, American Management AssociationN. J. Smith, 2008, Engineering Project Management, 3rdEdition, Oxford, Blackwell PublishingTrevor L. Young, 2004, The Handbook of ProjectManagement, 2nd Edition, London, Kogan Page Ltd.