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Business Case Review and Roles Tutorial

1 Business Case Review and Roles

This lesson focuses on the business case review process and the roles and areas of focus in business case. It also covers the relationship between business case and transformational flow. Let us begin with the objectives of this lesson in the next screen.

2 Objectives

By the end of this lesson, you will be able to: Identify the steps involved in the business case review Explain the relationship between transformational flow and business case Describe the roles of the Senior Responsible Owner, Programme Manager, Business Change Manager and Programme Office associated with the business case Let us move on to the next screen to focus on reviewing the business case.

3 Reviewing the Business Case

The business case should be reviewed at the end of each tranche to assess the continued viability of the programme and any need for realignment. The image on the screen depicts the process of validating a business case. The first step is ‘identify’. In this part, identify if the initiative make good business sense, and send the feedback to policy strategy group. If satisfied with the viability of the business case, send the inputs forward to define the business case. If the initiative doesn’t make good business sense after initial assessment, the programme will not proceed with current assumptions. It is important to ensure that sufficient alternatives have been considered and the emerging business case is optimum. Next step is ‘define’. In the define part, ensure that the business case still remains viable and profitable as the management and other activities are added. Also check that it is aligned with the strategy at the same time. Once satisfied with the progress and emerging business case, send it to “tranche’, which is the third step. At the end of each tranche, some benefits are delivered. In the end of tranche review, re-assess the business case to confirm that business case is still valid and viable. There might be some changes required after the review. If satisfied, send it forward to the next tranche. Note that, if a tranche is long, the business case reviews should be scheduled at least in every 6 months. . In the later tranches, ensure that the tranches are making use of changes in business case and exploiting the new opportunities for better benefits. The last step is ‘close’. During the “close” part, validate if the business case was met. The lessons learnt are useful to improve the future business cases. In the next screen, we will learn how to manage the business case.

4 Managing the Business Case

Information presented in the business case will serve many purposes during the life of a programme. They will all be focused on ensuring successful delivery and strategically aligned outcomes. The key questions addressed here are: To what extent can the programme realise the expected benefits? And, Will the changes to the cost-benefit profile alter the status and relative priority of the programme in relation to meeting the corporate strategic objectives? The business case will be used to assess the impact of accommodating any strategic change or changed business driver; propose revisions to programme’s boundary and blueprint; revised benefit and cost estimates from the Business Change Managers or the BCMs (read as B-C-Ms) and projects; any new major issue identified; and any significant new risk identified. Even after the programme ends, the Senior Responsible Owner or the SRO (read as S-R-O) should continue to champion the desired outcomes, values and principles that underpinned the change initiative, and continue benefit realisation even after programme closes. Let us next discuss the relationship between transformational flow and business case.

5 Business Case within the Transformational Flow

The table on the screen depicts the relationship between transformational flow and business case. In ‘identifying a programme’, programme mandate is used as an input. If the programme mandate is flawed, this should be revealed during the development of the programme brief. The programme brief is created in this process and provides an outline for the business case. ‘Defining the programme’ is where the whole business case is created and developed using inputs from other governance documents undertaken in this process. It provides guidance on how to develop business case by iteration. It also ensures that all alternatives are considered to ensure optimal business case has been chosen. In ‘managing the tranches’, the business case is the key control document and needs to be updated and reviewed throughout each tranche to ensure proper control. At the end of each tranche, the business case needs to demonstrate that the programme is still viable in all respects. The business case must also continue to be aligned with corporate strategy. While ‘delivering the capability’, keep the following points in mind. The programme business case is broader than a project’s business case and includes the cost of business changes required in the programme and additional benefits realisation costs and description of how project outputs integrate to achieve corporate strategic objectives. While reporting from the projects to the programme, the programme business case should also include the provisions of an updated project business cases. While ‘realising the benefits’, keep in mind that the benefits are an important part of the business case, along with cost, time and risk. If the programme fails to realise its planned benefits, then the business case will fail to be achieved. Benefits review will provide an important input to reviewing the business case. While ‘closing the programme’, business case should have been achieved by the programme. The business case is finally updated from all the programme plans and the business cases of the constituent projects. In the next screen, let us discuss the roles associated with the business case and their areas of focus.

6 Business Case Roles and Areas of Focus

We will focus on the roles, namely, the Senior Responsible Owner or SRO (read as S-R-O), Programme Manager, Business Change Manager and Programme Office. First, let us discuss the roles and areas of focus the Senior Responsible Owner. The areas of focus for the SRO include answering to the Sponsoring Group for the successful delivery of programme and achievement of business case, securing the investment of the programme and ensuring that the business case is controlled and the audit trails are in place to account for changes as the programme develops. It also includes scanning the business horizons surrounding the programme for issues that will realign the programme, ensuring that the progress of the programme is realigned with the business case and consulting with the Sponsoring Group to identify any early warning indicators of change that may endanger the business case. The responsibility also includes initiating independent assurance reviews of the business case viability. Next, let us discuss the roles and area of focus of a Programme Manager. The area of focus of a Programme Manager includes preparing the business case. The Programme Manager supports the SRO in an on-going validation and review of the business case and manages the programme’s expenditure against the overall investment defined in the business case. The Programme Manager also identifies the opportunities to optimise the business case. Now, let us discuss the roles of the Business Change Manager or BCM (read as B-C-M). The area of focus of BCMs include profiling the benefits and the dis-benefits and their associated costs. They also ensure that benefits continue to be valid through the regular business case reviews and total cost of change is captured in the business case. Their area of focus also includes identifying the operational risks to the business case and ensuring that they are controlled, and measuring benefits at the start of the programme and tracking throughout to inform the net benefits. They also manage the business change costs, the benefits realisation costs and the profiled benefits. Let us discuss the roles of the Programme Office. The area of focus of programme office includes supporting the SRO and the Programme Manager in compiling and updating the business case, collecting and maintaining the business case information and facilitating the business case reviews. In the next screen, we will look into the information provided about the business case.

7 Business Case Information

The Business case is used to validate the initiation and on-going viability of a programme. The business case document contains strategic objectives and vision statement of the programme, and aligning with organisational context and business environment along with expected benefits. It also includes overall risk profile including the major risks and the risk assessment. It will provide details of estimated cost and overall timescales. It will provide investment appraisal and forecasts of cash flow and expenditure over programme timeline. It also lists the options and approaches that have been considered including costs, benefits and risks. In the next screen, we will focus on an example based on the concepts discussed.

8 Business Case Problem Statement

For the programme, Nutri Snack, Kylie Honkele, the SRO of the programme has to guide Chao Yin, the Programme Manager to write a robust business case. Following is the list of items prepared by Chao to include in the business case: Benefits and dis-benefits Risks Costs Expenses and Strategic objectives Kylie is analysing the list to understand if it is useful and anything more can be included in it. Let us find out Kylie’s interpretation of the analysis in the next screen.

9 Business Case Solution

After having a detailed analysis of the list submitted by Chao, Kylie has suggested to add some more information. Kylie has also explained to Chao the need to have this information in a business case. Following is the information to be added to the list presented by Chao Yin. The first one is to create a risk profile highlighting the major risks to the programme. When highlighting risks, focus on risks that can cripple the programme. Only such risks need to be included in the business case. Next, the programme should conform to the vision statement and align to not only the strategic objectives but also to the organisational context and the business environment. Then it needs to be ensured as to whether the organisation is able to achieve the necessary transformation along with identifying the benefits. If not, then the programme will result in wasting the resources. Fourthly, the investment appraisal needs to be done to make sure that the programme is worth investing. It will give us a base to check the proportion between cost and benefits. Finally, details of different options and approaches that have been considered are also included in the business case. These can be used in case of any change required in the future.

10 Summary

? The steps involved in the business case review process are identify, define, tranche and close. ? The relationship between transformational flow and business case can be defined on the basis of identifying a programme, defining a programme, managing tranches, delivering capability, realising benefits and closing the programme. ? The SRO secures the investment of the programme. ? The Programme Manager prepares the business case. ? The BCM ensures that the total cost of change is captured in the business case. ? The Programme Office facilitates the business case reviews. Next, we will look at a few questions based on the lessons covered so far.

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  • PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.

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