The PRINCE2 Business Case Theme

The Business Case is one of 7 PRINCE2 Themes (things that must be attended to throughout the life of a project).

The Purpose for the Business Case

A basic principle of PRINCE2 is “Continuous Justification”, which asks the question, “is the project (still) worth investing in?”. The project’s Business Case documents the answer to this question.
Different projects will measure success is different ways, for example ROI or legislative compliance.  Nevertheless, all projects must be evaluated to see if the right  approach is being taken to achieve benefits with available resource. In order to do so, the Business Case provides the means to evaluate the project on whether it is:

  • Desirable = Is the project worth investing in, given its anticipated costs, benefits and risks (CB&R)?
  • Viable = Is the project possible? Will it produce the intended products?
  • Achievable = Will the products of the project provide the intended benefits?

Delivering a project’s products doesn’t mean benefits of these products will be realised. For this reason, it is important to distinguish between the project’s products (or outputs), outcomes and  benefits.

  • Output = a specialist product of the project, e.g. new web site
  • Outcome = result of using project’s outputs , e.g. more sales
  • Benefit = measurable change that is advantageous to stakeholders, e.g. increased profits

In  contrast to a project’s products, its outcomes (and therefore benefits)  may not occur until some time after the project closes. To avoid the  danger of loosing sight of benefits and focusing on products, the  Business Case must make the relationship of products, outcomes and benefits explicit.

The Contents of the Business Case

The Business Case must contain sufficient information to determine if project is DVA i.e. will give a ROI (return on investment). A typical Business Case will contain:

  1. An executive summary
  2. Reasons for undertaking the project, including options that have been considered
  3. The anticipated benefits and and dis-benefits
  4. Estimates of costs and time-scales
  5. A risk profile
  6. An investment appraisal

The Reasons for the Project and the Options Considered

This section outlines the reasons that the project is required, given corporate strategies and objectives. These reasons may be derived from the Project Mandate, but clarification should be sought if that is not the case.
The options considered should be included in sufficient detail for stakeholders to determine which gives the best ROI for business. It will include estimated CB&R (costs, benefits and risks for each option).
PRINCE2 recommends that options should include:

  • Doing nothing (default)
  • Doing the bare minimum
  • Doing something

As the project progresses, the Business Case will be continually updated with regard to CB&R.

Expected Benefits and Dis-benefits

The project’s products are determined by the benefits desired from the project. The business case should list the tangible and intangible benefits anticipated from the selected option. (Intangible benefits might be “increased employee morale”)
Details of each benefit should include:

  • How the benefit fits with corporate objectives and strategy
  • How It relates to the projects outputs and outcomes
  • How much benefit is expected (with tolerances)
  • How the benefit will be measured (even for intangible benefits)
  • Who benefits

To enable continuous justification of the project:

  • The relative importance of benefits should be recorded
  • Benefits should be objectively quantifiable

In addition dis-benefits should be included in the Business Case. Dis-benefits are those perceived as negative outcome by at least one stakeholder. The difference between risks and dis-benefits is that risks are uncertain whereas dis-benefits are expected.

Time-scales and Costs

Information about time-scales will include:

  • When resources will be required
  • When benefits will be realised and verified
  • The earliest / latest feasible project start / end dates

Information on costs will include:

  • Project costs based on the Project Plan
  • Ongoing operational and maintenance costs
  • The basis of costings
  • Funding arrangements

The time-scales and costs in the Business Case are used as basis of tolerances as the project progresses.

Risk Profile

Projects are uncertain, and therefore risky. Risks can impact both benefits and resources both positively and negatively. The justification needs to take major sources of risk into account, so a summary of risks will be included in the Business Case, and major risks will be. The recording of risk should  focus on benefits, and should therefore includes both project and ongoing operational / maintenance risks.

Investment Appraisal

An Investment Appraisal is a comparison of costs and benefits over a period of time (a fixed period, usually in years, or life of product). It will includes both project costs and ongoing costs, and is intended to demonstrate the value of the project to stakeholders.

The Life of the Business Case

There are 4 stages in the life of a Business Case:

  1. Development
  2. Review
  3. Maintenance
  4. Confirmation of Benefits

Developing the Business Case

Initially, the information in the Business Case is based on approximations. These estimates should be iteratively refined as more is learned, and this may lead to project replanning.

Process Development of the Business Case
SU An Outline Business Case is drawn up based on the Project Mandate. The Outline Business Case forms part of the Project Brief.
IP The detailed Business Case id based on the Outline Business Case and Project Plan, and may include information from the Project Brief and Risk Register. The Business Case forms part of the PID.

Reviewing of the Business Case

At various times throughout the project, the Business Case will need to be revised and re-evaluated to see if the project is still justified. This will occur:

When Why Who
At the end of the SU process To ensure project is worth investing in Project Board
At the end of the IP process To authorise the project Project Board
As a result of changes to the project’s anticipated costs, benefits or risks To assess the impact of the revision on the project PM
Following an exception To approve an Exception Plan Project Board
After each stage To authorise the next stage Project Board
During final stage To ensure project will provide expected benefits PM
As part of the benefits review To ensure that benefits are realised Corporate / programme management

Maintaining the Business Case

The Business Case is continually updated regarding CB&R. This is especially important at the end of each stage before the next is authorised. Updates will include benefits already realised as the project progresses.

Confirming the Benefits

Most benefits are realised after the project has closed, so a mechanism is required to confirm them after the end of the project. This is the purpose of the Benefits Review Plan, which is based on the Business Case. The Business Review Plan will include:

  1. Expectations regarding the scope, timing and responsibilities associated with review.
  2.  Information required to confirm that the benefits of the project:
  • What benefits are expected
  • What (objective) measures will be used to confirm these measurements
  • What baseline measures will be taken
  • How measures will be collected

The Business Review Plan may be updated during the project if benefits are realised before it is closed.


Corporate or Programme Management

  • Provides the Project Mandate, upon which the Business Case is based
  • Ensures that the Benefits Review takes place


  • Ensures the Business Case and Benefits Review Plan are written and approved (doesn’t necessarily write them)
  • Secures funding
  • Ensures that the benefits specified by the Senior User represent ROI, are aligned to corporate strategy and that they are realizable.

Senior User

  • Specifies the benefits
  • Realizes benefits by using products
  • Confirms their realization in the Benefits Review
  • Individual beneficiaries may be recruited to support the Senior User

Project Manager

  • Assists in writing the Business Case and Benefits Review Plan
  • Performs an Impact Analysis following changes in CB&R
  • Assesses the Business Case at the end of each Stage
  • Reporting benefits realised during project in the End Stage Report

Project Assurance

  • Assist in developing the Business Case
  • Monitor the Business Case to ensure that events outside the project have no impact upon it
  • Verifies and monitors the Benefits Review Plan

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