Project Management:

The Business Case

Nader Jarmooz 2012

The Business CaseEvery 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

The Business Case strategy 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 viabilityProject mandateProject backgroundProject ScopeProject Costs/Benefits Analysis

The Business Case roleIt provides the foundations for Senior Responsible

Owner (SRO) and Project Sponsors to make their judgments based on estimated costs and expected benefits

It 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.

The Business Case responsibilitiesa Business Case document must be produced by the Project Manager. The initial Business Case must be a short and concise document focusing as much as possible on factual data and realistic estimates (Young, 1996).

The Business Case is the product of management activities and efforts. It establishes mechanism to judge whether the Project is (and remains) desirable, viable and achievable as a means to support decision making in its (continued) investment.’

The Business Case methodologyAccording to PRINCE 2 methodology it provides the justification for the endeavour; though in other project management methodologies, the justification is a separate activity and encompasses the business case alongside the project objectives, scope, and context (Newell and forashival, 2004).

The Business Case testThe Business Case provides the vital test of viability and validity for the Project Board and Stakeholders to continue with their support and investment; whilst setting out the project scope and its fit within the overall 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 by the Project Board (Smith, 2008). it can greatly influence the final decision made by the sponsors.

• Reason for the project, and the benefits it offers• How the project offers solutions for problems/opportunities the organisation is facing• Description of options considered, and recommended 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

The Business Case issues

The Business Case documentationThe business case is initially a static document containing 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 the business case becomes dynamic and the information is updated as the project proceeds and evolves through various stages

In PRINCE2 methodology, a viable Business Case should be the driving force behind the proposed Project, and should concentrate on customer’s business needs.

Therefore a Project should not be started unless there is a compelling Business Case for it.

The Business case should be checked for Project viability throughout the Project lifecycle, and the project should be terminated if the justification no longer applies.

The Business Case in PRINC£2

Business case Templates can be downloaded from following cites:

http://www.prince2.com/prince2-business-case.aspwww.jiscinfonet.ac.uk/InfoKits/infokit-related-files/businesscase-templatehttp://www.my-project-management-expert.com/how-to-write-a-business-case.htmlhttp://www.projectsmart.co.uk/business-case.html

Further reading on Business Case and PRINCE2 methodology:What is a PRINCE2® Business Case and why do you need one? http://www.knowledgetrain.co.uk/prince2-business-case.php

ReferencesMichael W. Newell, Marina N. Grashina, 2004, The Project Management Question and Answer Book, New York, American Management Association

N. J. Smith, 2008, Engineering Project Management, 3rd Edition, Oxford, Blackwell Publishing

Trevor L. Young, 2004, The Handbook of Project Management, 2nd Edition, London, Kogan Page Ltd.