A PMP business case is a comprehensive document that provides justification for initiating a project. It evaluates the economic feasibility and alignment of the project with the organization’s strategic objectives.
Key Facts
- A PMP business case is a document that justifies the initiation of a project based on its economic feasibility and alignment with the organization’s strategic goals.
- It includes a feasibility study that assesses the commercial viability, affordability, and achievability of the project.
- The business case connects the project with its intended value or benefits, which are measured in terms of cost, scope, time, and delivering the desired outcomes.
- Financial analysis is a significant part of the business case, and it involves calculating financial indicators such as Internal Rate of Return (IRR), Return on Investment (ROI), Net Present Value (NPV), Payback Time (PBT), Cost-Benefit Ratio (CBR), and Profitability Index (PI).
- A business case typically includes elements such as an executive summary, introduction, scope, business need, alternatives analysis, benefits, cost, financial analysis, and conclusion.
- Writing a business case requires experience, industry and market knowledge, and the authority to initiate the project. It involves identifying the problem, identifying multiple solutions, suggesting the recommended solution, and explaining the implementation approach.
- A PMP business case is different from a business plan, although they both examine opportunities, consider financial analysis, and are used in decision-making. The business case focuses on justifying a specific project, while the business plan provides a comprehensive roadmap for the entire business.
- A PMP business case is also distinct from an executive summary and a project charter. The executive summary provides a high-level summary of the document, while the project charter initiates the project and assigns the project manager with authority and resources.
Feasibility Study
The business case includes a feasibility study that assesses the commercial viability, affordability, and achievability of the project. It analyzes the project’s potential risks, benefits, and costs to determine its viability.
Value Proposition
The business case connects the project with its intended value or benefits. These benefits are measured in terms of cost, scope, time, and delivering the desired outcomes. The business case demonstrates how the project will create value for the organization.
Financial Analysis
Financial analysis is a significant part of the business case. It involves calculating financial indicators such as:
- Internal Rate of Return (IRR)
- Return on Investment (ROI)
- Net Present Value (NPV)
- Payback Time (PBT)
- Cost-Benefit Ratio (CBR)
- Profitability Index (PI)
These indicators help assess the project’s financial viability and potential return on investment.
Elements of a Business Case
A typical business case includes the following elements:
-
- Executive Summary
- Scope
- Business Need
- Alternatives Analysis
- Benefits
- Cost
- Financial Analysis
Conclusion
Writing a Business Case
Writing a business case requires experience, industry and market knowledge, and the authority to initiate the project. It involves the following steps:
- Identifying the Problem
- Identifying Multiple Solutions
- Suggesting the Recommended Solution
- Explaining the Implementation Approach
Distinctions from Other Documents
A PMP business case is distinct from a business plan, executive summary, and project charter.
- A business plan provides a comprehensive roadmap for the entire business, while a business case focuses on justifying a specific project.
- An executive summary provides a high-level summary of the document, while a business case provides detailed justification and analysis.
- A project charter initiates the project and assigns the project manager, while a business case provides the rationale for the project’s initiation.
Sources
- https://pmstudycircle.com/business-case/
- https://www.apm.org.uk/resources/what-is-project-management/what-is-a-business-case/
- https://www.linkedin.com/pulse/power-business-case-project-management-alejandro-villa-pmp
FAQs
What is a PMP business case?
A PMP business case is a document that justifies the initiation of a project based on its economic feasibility and alignment with the organization’s strategic goals.
What does a business case include?
A business case typically includes elements such as an executive summary, introduction, scope, business need, alternatives analysis, benefits, cost, financial analysis, and conclusion.
What is the purpose of a business case?
The purpose of a business case is to provide decision-makers with the information they need to assess the viability and value of a proposed project.
Who writes a business case?
Business cases are typically written by project managers, business analysts, or other professionals with experience in project planning and financial analysis.
What is the difference between a business case and a business plan?
A business case focuses on justifying a specific project, while a business plan provides a comprehensive roadmap for the entire business.
What is the difference between a business case and an executive summary?
An executive summary provides a high-level summary of the business case, while the business case provides detailed justification and analysis.
What is the difference between a business case and a project charter?
A project charter initiates the project and assigns the project manager, while a business case provides the rationale for the project’s initiation.