Some think a Business Case is limited to a net present value (NPV) or payback calculation, but that is only a minor piece of the definition.
The PRINCE2 Business Case captures the reasoning for initiating a project. The Business Cases is created to help decision-makers ensure that the proposed initiative will have value and relative priority compared to alternative initiatives based on the objectives and expected benefits laid out in the business case.
In PRINCE2 the purpose of the Business Case is to establish mechanisms to judge whether the project is desirable, viable and achievable. The Business Case should be updated and reviewed at every stage boundary to make sure the project remains desirable, viable and achievable.
The content of a Business Case should typically be:
- Reasons - the reasons for undertaking the project.
- Business options - analysis and recommendation of options.
- Expected Benefits - the measurable benefits the project will deliver. Tolerances should be set for each benefit.
- Expected disbenefits - outcome perceived as negative.
- Timescale - over which the project will run
- Cost - a summary of initial project investment and further operational cost.
- Investment apprisal - an quantified aggregation of benefits and dis-benefits. Can be done as a NPV calculation, ROI, payback period or cash flow statement.
- Major risks - a summary of the key uncertainties in the project.
The PRINCE2 Business Case is one of the seven PRINCE2 Themes
You can find a Business Case template on the PRINCE2 Templates page