Written by Jeff on January 31, 2018 in brick
brick of good project management practice

Brick: Business case

Version: 1

A document that justifies a project, comparing forecasts of costs against benefits. It also lists the key risks, to highlight the uncertainty in the forecasts.

Cost-benefit analysis, Value for money, Return on investment

Lifecycle

At the beginning of the project, the business case

    • justifies the project
    • records a forecast of costs and benefits (and risks)

During project delivery, the business case

    • records revised forecasts of costs and benefits (and risks)
    • the business case confirms the on-going viability of the project

At the end of the project, the business case

    • the business case records the final cost and the latest estimate of benefits

At a gate decision

    • the PM revises the forecasts of costs, benefits, and risks.
    • the project board uses the business case to confirm the viability of the project

Specification-driven work

The project team uses a bottom-up forecast of costs

    • specifies each deliverable (or element of work)
    • estimates the cost of each deliverable (or element of work)
    • adds up all the costs

The use of specifications is a source of uncertainty. Specifications generate risk – supplier side risk (delivery to specification and/or quality…) – customer side risk (changes to specification; new requirements…)

Discovery work

The project team uses a top-down forecast using MoSCoW prioritisation

    • identifies high level functions, features or needs
    • uses MoSCoW prioritisation to identify core functionality
    • estimates the cost of delivering the core
    • estimates the benefits from delivering the core

The initial top-down estimates are highly uncertain.

Template

Cost
- Money
- Effort (in man-hours or man-days)
- Other resources (laboratories, production lines, equipment, etc)

A cost is often time-related (we forecast when the cost will be incurred)

Benefits
- A benefit is an improvement generated by the project outcome (outcome means the project mid-term result)
- A benefit is either tangible (could measure directly) or intangible (could measure indirectly)
- A benefit could be cashable (cashable means measurable in financial terms)

A benefit is often time-related (we forecast when the benefit will be realised)

Time

Major risks

Tags

Practice Type
Benefits, Biz. Case
Processes
2. Start the Project, 3. Deliver the Project, 4. Gate decision

External reference

Prince2
Design type