Keeping Projects Justified from Start to Finish
Why the PRINCE2 Business Case Is Misunderstood
Among the seven principles of PRINCE2, “continued business justification” is arguably the most misapplied. While most teams diligently produce a business case at the outset, what follows is often neglect, not refinement.
In practice, the business case should serve as a living document—reviewed, revised, and reaffirmed at every major decision point. When it isn’t, projects advance without clear justification, wasting time, budget, and strategic focus.
This article explains the role of the PRINCE2 Business Case. It provides a structured approach to maintaining its relevance throughout a project’s lifecycle.
The Business Case Is Not a One-Time Document
The PRINCE2 approach centers on governance and decision-making. The business case is not an initiation formality—it is the very basis for a project’s existence. It provides the rationale for investment.
It answers a core question: Is this project worth doing? Is it still worth continuing?
The misunderstanding arises when teams treat it like a box-checking exercise. A document is produced, approved, and then buried in folders never to be opened again.
But PRINCE2 explicitly states that the business case must be validated continuously. That means reviewing and updating it at each stage boundary, and even within stages if external factors shift.
Understanding the Components of a Strong PRINCE2 Business Case
An entire business case within PRINCE2 includes several components that must evolve as the project evolves. These include:
Executive Summary: A concise overview of the business need and value
Reasons: The driving factors that led to the project being proposed
Business Options: Options considered (including doing nothing)
Expected Benefits: Quantifiable improvements the project will deliver
Expected Dis-benefits: Any known negative impacts
Timescale: Critical deadlines or time-dependent benefits
Costs: Estimated costs, including tolerances
Investment Appraisal: Return on investment, payback period, etc.
Major Risks: Identified risks that affect success
Each of these must be monitored and updated. For instance, if expected benefits shrink due to market changes, the business case must show those shifts. It should also tackle any new risks that are identified.
Why Continuous Validation Is Crucial
Letting a project continue on the basis of outdated assumptions can be costly. Here’s why ongoing validation matters:
Strategic Alignment: Organizational priorities change. The project must continue to serve current goals.
Financial Accuracy: Market shifts, supplier changes, or scope creep can distort original cost and Return On Investment (ROI) projections.
Stakeholder Confidence: Sponsors and stakeholders want assurance that resources are being used effectively.
Risk Mitigation: Newly emerging risks will alter the viability of the initiative.
Regulatory Compliance: Changing legislation or internal compliance standards can impact the project’s relevance.
PRINCE2 mandates regular checkpoints (stage boundaries) precisely to reassess the business case and confirm it remains valid.
When and How to Update the PRINCE2 Business Case
The PRINCE2 method provides a framework for business case updates, particularly at stage boundaries. But, the responsibility for ensuring it stays current belongs to several roles:
Project Board: Makes investment decisions based on the updated case
Executive (within the board): Owns the business case and ensures it’s aligned with strategic goals
Project Manager: Keeps the business case current and reflective of actual project conditions
Here’s a structured approach to maintaining the business case across the project lifecycle:
Initiation Stage: Build the Baseline
- Confirm the project aligns with business strategy
- Find first benefits and baseline costs
- Outline key risks and dis-benefits
- Include sensitivity and scenario analysis if available
End of Each Stage: Conduct a Formal Review
Review what has been achieved vs. what was planned
Update the cost estimate with actual cost and revised forecasts
Reassess risks and adjust impact/probability
Re-calculate ROI and payback period
Validate benefits (are they still achievable and relevant?)
Ad Hoc Validation: When Conditions Change
Trigger a business case review when key assumptions are threatened (e.g., new competition, legislative changes, staff turnover)
Here’s a simple format project teams can reuse at every stage:
Business Case Review Template
Date of Review:
Stage:
Reviewed by:
Section 1: Alignment with Business Strategy
Are project objectives still aligned with current strategic priorities?
Section 2: Costs
Actual costs to date vs. forecast
Revised cost projections for remaining stages
Section 3: Benefits
Update on advantage realization
Changes to advantage assumptions or dependencies
Section 4: Risks and Dis-benefits
New risks identified?
Impact of dis-benefits re-evaluated?
Section 5: Justification
Does the project still offer a favorable return?
Is the continuation justified based on revised data?
Section 6: Board Decision
Continue / Pause / Change / End
The Role of the Business Case in Gatekeeping
One of the strengths of PRINCE2 is its reliance on structured decision points. Before moving into each new stage, the business case serves as a gatekeeper. A project can only continue if its justification remains intact.
This is critical to preventing sunk cost bias. Teams often push ahead simply because they’ve already invested resources. This occurs even when the rationale no longer holds.
Business cases must empower the Project Board to say no just as confidently as they say yes.
Common Pitfalls in Business Case Management
Several recurring issues contribute to poor business case discipline:
No owner assigned: Without clear ownership (usually the Executive), no one drives updates.
Document-only focus: Teams focus on writing the document, not maintaining its relevance.
Advantage assumptions untested: Benefits are rarely validated after delivery.
Over-optimistic projections: Initial business cases are often inflated to secure approval.
Lack of review culture: Project Boards skip meaningful validation and approve continuations by default.
Recognizing and addressing these pitfalls early helps keep the business case—and the project—anchored in reality.
Business Case and Organizational Goals: A Two-Way Street
Projects don’t exist in a vacuum. They contribute to broader outcomes like digital transformation, operational efficiency, or market competitiveness. As organizational goals shift, so too must the justification for individual projects.
PRINCE2’s business case is a mechanism to guarantee this alignment remains intact. Project Boards must periodically ask: Is this still contributing to what matters now?
This is especially important in agile or rapidly changing industries, where strategic goals evolve faster than the projects themselves. Having a flexible yet rigorously maintained business case bridges this gap.
Linking Benefits Management to the Business Case
Another area of disconnect is between benefits realization and business case ownership. In PRINCE2, while the business case outlines the benefits, it’s often post-project evaluations that reveal whether they were achieved. This feedback loop is rarely closed.
It is a stronger practice to track benefits and link them directly back to the business case. This can be achieved using regular checkpoint reports. Post-implementation reviews are also essential. This reinforces accountability and creates data to inform future project choice.
Closing the Loop with Lessons Learned
Updating the business case also provides valuable insights for organizational learning. If benefits were overestimated or risks understated, that should inform how future cases are written.
Maintaining a history of business case updates and outcomes builds a smarter, more data-informed project culture.
Keep the Business Case Alive, or Risk Project Drift
The PRINCE2 Business Case is not just a start-up document—it’s the ongoing rationale for the project. Neglecting it leads to decision-making based on outdated assumptions, exposing organizations to waste and misalignment.
Keeping it current, precise, and aligned with business goals transforms it into a practical tool for governance. Whether you’re a project manager, an executive, or a board member, your role includes asking: Does this still make sense?
Update your business case. Use it. Challenge it. Make it central to how decisions are made.
Let’s Discuss: How often does your team revisit the business case during a project? Are you using it to inform real decisions, or just filing it away after initiation? Share your experience in the comments.
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