PRINCE2 7 Foundation · Study lesson 13
Make the investment case
Explain why the remaining investment is worth making.
9 minute study lesson · Practices · Original learning material
What you will understand
- Distinguish an output, an outcome, a benefit and a disbenefit.
- Explain why business justification changes over time.
- Connect investment decisions to the business case and its owner.
The idea
Finishing a project and making a worthwhile investment are different achievements. A team can deliver exactly what was requested while the organisation gains very little. The business case connects the proposed work to reasons for spending resources. It provides a basis for authorisation and for reconsidering that authorisation when circumstances change.
Start with a business objective: what improvement or obligation matters to the organisation? Compare realistic options, including what would happen without the project. Some projects are driven by a legal obligation rather than a financial return. That does not remove the need to compare sensible ways of meeting the obligation, their costs, risks and expected consequences.
An output is something the project creates, such as a new stock-control application. An outcome is the changed situation enabled by using that output, such as staff replenishing shelves from reliable stock information. A benefit is a measurable improvement valued by stakeholders, such as fewer lost sales. Installation alone establishes neither adoption nor the improvement.
A disbenefit is an expected negative consequence of the change: for example, longer journeys for residents when services are consolidated. It differs from a risk, whose occurrence or effect remains uncertain. Costs of creating and operating the solution, expected benefits, disbenefits, timescales and major risks all belong in the investment reasoning. Keeping them separate makes assumptions easier to challenge.
The business case develops as information improves. An early outline supports deciding whether initiation is worthwhile; a fuller case supports committing to delivery. During delivery, significant issues, revised forecasts and stage decisions can alter the case. Desirability asks whether the result is worthwhile, viability whether it can be delivered, and achievability whether the intended benefits can realistically be obtained.
The executive is accountable for the business case. The project manager helps develop and maintain it, while users and suppliers contribute evidence about benefits and delivery. Already-spent money cannot be recovered by approving more work. Continuing should depend on the remaining investment and realistic future value. If justification is lost, the project manager escalates the position for an authorised decision; the team does not quietly carry on to protect its original promise.
Remember four business-case actions: develop, check, maintain and confirm. Develop the reasoning as the proposal becomes clearer; check that it still supports a sensible investment; maintain it when evidence changes; and confirm the actual benefits when they can be measured. These actions connect early decisions to later evidence. A delivery team finishing its products does not by itself confirm the benefits.
Test the investment reasoning
| Lens | Question |
|---|---|
| Desirable | Do expected benefits justify costs and risks? |
| Viable | Can the required products be delivered? |
| Achievable | Can using those products produce the intended benefits? |
| Continued justification | Does the current evidence still support the remaining investment? |
An original fictional example
Fictional example: the village equipment library
A charity proposes an online borrowing service. The output is a working booking system; the intended outcome is residents reserving shared equipment without telephone coordination. The expected benefit is forty fewer volunteer administration hours each month. Some residents will need extra assistance using the service, an anticipated disadvantage that must also be considered.
The decision
The executive asks for adoption assumptions, support costs and comparison with improving the existing telephone service before approving further spending.
Why it makes sense
A functioning website is evidence of delivery. Evidence of worthwhile change also requires realistic use, measurable improvement and an honest account of the costs and negative consequences.
A common confusion
The mistaken idea: If the product is delivered on time, the business case has been proved.
The distinction: Delivery provides an output. The organisation must still use it to produce outcomes and realise benefits; the cost and risk of achieving those benefits remain relevant.
Built → used differently → valued improvement.
Points to remember
- Identify what is created, what changes and what measurable improvement follows.
- The executive remains accountable for business justification.
- Past expenditure alone is not a reason to approve future expenditure.
Your takeaway
A business case is continuing investment reasoning. It connects outputs to useful outcomes and benefits, weighs disbenefits and uncertainty, and informs decisions about whether further commitment is justified.
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