3 steps to create a compelling business case with PRINCE2

A well-constructed business case provides a structured proposition for business change, outlining the benefits, costs, risks, and timescales associated with a project.

A business case can be complex, with many factors to consider. This is why a methodical approach can be fundamental – and this is where PRINCE2 comes into its own. Here’s how to build a great business case using the PRINCE2 framework, ensuring your project is both valuable and viable from the outset.

What is a business case?

Essentially, a business case serves as the foundation for understanding a project’s economic and strategic impact, ensuring that it aligns with the broader goals and objectives of the organisation.

The purpose of a business case is not only to justify the investment in a project but also to provide a clear plan for how it will be managed to ensure the anticipated benefits are realised. It acts as a reference document throughout the project’s lifecycle, helping to keep it aligned with its original goals and objectives.

How to create a compelling business case with PRINCE2 in three steps

Step 1: Start with a clear definition of the project

The first step in building a business case within the PRINCE2 framework is to clearly define the project. This involves identifying the problem or opportunity that the project aims to address.

Clearly articulate the project’s objectives and expected outcomes, ensuring they align with the organisation’s strategic goals. Engaging with key stakeholders during this phase is important to gather insights and ensure that the project’s aims are fully understood and supported.

Getting this initial clarity sets the foundation for a strong business case, as it allows for the precise definition of what success looks like and how it contributes to the organisation’s broader objectives.

Step 2: Analyse and present the options

Once the project is defined, the next step is to explore and present available options. This involves thoroughly analysing potential solutions, including a ‘do nothing’ option, to address the identified problem or opportunity.

Each option should be evaluated in terms of feasibility, costs (both initial and ongoing), benefits (tangible and intangible), risks, and alignment with organisational strategy. The PRINCE2 methodology emphasises the importance of this comparative analysis to ensure that the chosen solution is the most effective and efficient way to achieve the desired outcomes.

Presenting the options with precise, evidence-based assessments helps in making a rational and informed decision about the project’s direction.

Step 3: Detail the project’s execution and impact

The final component of a PRINCE2 business case is detailing how the project will be executed and the impact it will have. This includes outlining the project’s scope, the approach to project management, the timeline, and the resources required.

It’s also crucial to detail the expected benefits, how they will be measured, and when they will be realised. A risk management plan should include identifying potential risks, their likelihood, impact, and proposed mitigation strategies. This section should not only convince stakeholders of the project’s viability but also serve as a roadmap for its implementation and a benchmark for its success.

Creating a business case: what to include

Once you’ve considered creating a business case with PRINCE2 methodology, it can then become easier to create a business case consisting of the key components including:

• Executive summary: A concise overview of the proposal, highlighting its most critical aspects
• Problem/opportunity statement: This section describes the issue the project aims to solve or the opportunity it seeks to capitalise on, establishing the context for why the project is necessary
• Options analysis: Exploring all possible solutions, including the costs, benefits, and risks associated with each. This should include:
• Do nothing: The consequences of not undertaking the project
• Do the minimum: The least that can be done to address the problem or seize the opportunity
• Do something: Various options that could achieve the project objectives, including the recommended option
• Recommendation: Based on the analysis, this part advocates for the most viable option, explaining why it is preferable
• Financial consideration: A detailed examination of the financial implications, including initial costs, ongoing operational expenses, and the expected return on investment (ROI). This often involves cash flow forecasts and break-even analysis
• Risk review: An assessment of potential risks and their impact on the project’s success, along with strategies for their mitigation
• Implementation plan: A high-level overview of how the project will be executed, outlining the main stages, resources required, and a timeline
• Benefit realisation: This section describes how and when the benefits outlined in the business case will be achieved and measured

Why use PRINCE2 to build a business case?

There are many reasons why you should use PRINCE2 to help build an effective business case, including:

• Creates alignment: A key principle of PRINCE2 is that every project should have a clear justification that aligns with strategic objectives. By constructing a business case, organisations ensure that projects are not initiated on a whim but are instead closely aligned with broader business goals. This alignment guarantees that resources are invested in projects that offer real value to the organisation, supporting its long-term vision and strategy
• Documents decision-making: The business case in PRINCE2 serves as a critical document for decision-making throughout the project’s lifecycle. It outlines the reasons for undertaking the project, including expected benefits, costs, risks, and timescales. This comprehensive overview allows stakeholders and project boards to make informed decisions, ensuring that the project remains viable and beneficial from initiation to closure
• Facilitates continuous improvement: PRINCE2 advocates for the continual assessment of a project’s business case to ensure that it remains valid and justifiable at every project stage. This ongoing evaluation process allows for the early identification of any changes in the business environment or project parameters that may affect the project’s viability
• Promotes transparency: Constructing a business case encourages transparency and stakeholder engagement by clearly outlining the project’s objectives, benefits, and justification. This clarity fosters trust among stakeholders and ensures that everyone involved understands the project’s goals and the criteria for its success
• Encourages efficiency: By requiring a detailed analysis of costs, benefits, and risks, constructing a business case within the PRINCE2 framework ensures that resources are allocated efficiently. Projects are scrutinised for their potential return on investment, and only those with a solid business case that promises significant benefits relative to their costs are approved

Ready to create your business case?

Building a great business case within the PRINCE2 framework involves a clear project definition, thorough options analysis, and detailed planning for execution and impact assessment.

By adhering to these steps, project managers can ensure their projects are grounded in strategic objectives, backed by rigorous analysis, and set up for successful delivery – three steps to clear, compelling business cases.

Source: prince2.com