Revision as of 20:41, 14 February 2021

By Andrea Pin Morales

Abstract

There are 7 principles that must be followed when managing a project in order for it to be considered a PRINCE2 project ^[1] (p.20). One of these is the principle of Continued Business Justification. According to this principle, no project can be initiated without a justifiable reason. This reason will be the one steering all of the decisions to be made throughout the project. The justifiable reason must not only be recorded and approved, but must also remain valid and be revalidated during the entire project life cycle. ^[1](p.21.)

The business justification can be documented in the form of a business case. The business case is crucial to ensuring that the projects pursued are systematically aligned with the organization’s strategy and objectives. A business case is a recommendation for a precise set of actions. Despite the extensive available literature on this subject, problems still arise during the development and application of business cases which offset many of their benefits. ^[2] (p.2.)

Consequently, the main purpose of this article is to provide a set of practical guidelines to develop a strong business case in the context of project management. To achieve this, the article will first introduce some of the key characteristics of a project’s business case, the most important reasons for developing it, as well as fundamental differences that exist between the business cases of projects, programmes and portfolios. The recommended structure and formats will be explained and a thorough description will be provided on the steps that are vital to the writing of a strong business case. The consequences of skipping any of these steps will be outlined and some recommendations will be provided of any tools and techniques that can be used to uplift the analysis performed as part of the business case. At last, an example of a business case will be presented, followed by a final checklist and any potential limitations.

Introduction to the Business Case

Recommended Structure and Formats

Practical Guidelines

Building a Strong Business Case

Tools and Techniques

Example

Final Checklist

The takeaways ..

Limitations

Annotated Bibliography

In the following section, references have been provided for further reading on the topic of the Business Case in the context of project management.

• Messner, W. (2013). Making the Compelling Business Case. Palgrave Macmillan.

- This book is useful to those looking for in-depth descriptions of individual techniques that can be used to perform the costs and benefits appraisals, comprised in the Business Case. For example, chapter 5 is dedicated to describing how to make investment decisions utilizing the Net Present Value (NPV). The book provides a variety of example case studies and exercises illustrating the different aspects involved in the development of the project Business Case. Moreover, it also provides guidance on how to best present the Business Case and recommendations on how to structure it. This book will therefore also be useful to those interested in learning about how to verbally deliver the Business Case as well as the concept of Business Case selling.

• Gambles, I. (2009). Making the Business Case: Proposals that Succeed for Projects that Work (1st ed.). Routledge. https://doi.org/10.4324/9781315249988

- This book discusses the influence of other factors, such as task definition and stakeholder mapping, in the development of the Business Case. Similarly to the above book, it provides examples and exercises to build an understanding of the benefits and costs calculations typically performed as part of the Business Case.

• Sheen, R. (2015). HBR Guide to Building Your Business Case. Harvard Business Review Press. https://store.hbr.org/product/hbr-guide-to-building-your-business-case/15038

- This guide describes common mistakes that are made when developing and pitching a Business Case. It explains through different examples how to generate integral parts to the cost benefit analysis of the Business Case, such as the Return On Investment (ROI) and the break-even analysis. It also provides tips to delivering a great business case presentation and a general structure for the business case presentation.

• HM Treasury. (2018). Guide to developing the Project Business Case. HM Treasury and The Welsh government.

- This is a best practice guide published by the HM Treasury and the Welsh government in 2018. It provides detailed and specific advice on how the Five Case Model dimensions can be integrated into the business case. It addresses organizations that are part of the public sector but is applicable to all projects. It contains different types of checklists to go through when developing project business cases as well as links to business case templates.

References

1. ↑ ^{1.0 1.1} AXELOS. (2017). Managing Successful Projects with PRINCE2 2017 Edition. The Stationery Office Ltd. https://www.axelos.com/store/book/managing-successful-projects-with-prince2-2017
2. ↑ Messner, W. (2013). Making the Compelling Business Case. Palgrave Macmillan. https://link.springer.com/book/10.1057/9781137340573