Welcome to another Parallel Project Training podcast. My name is Ruth Phillips, and today we’re recording a podcast on the APM PMQ syllabus, which will be used in exams from September 2024. I’m here with one of our senior trainers, Lisa Regan, and we’re going to be discussing the business case. Welcome to the podcast, Lisa.
Hi Ruth, it’s great to be here, and I’m looking forward to talking about the business case. The business case is fundamental to a project. According to the APM syllabus, it’s important to understand that a business case is the justification for the initiation, investment, and continuation of a project. Before we dive into the other learning outcomes, let’s summarise what a business case is and its key contents, so if I were a project manager tasked with creating one, I’d know what to include. Lisa, can you guide me on what goes into a business case?
Certainly. The contents of a business case include benefits, which are crucial because the business case is the one document that follows the project through all its phases—concept, definition, deployment, transition, and into the extended lifecycle. Benefits must be included because they justify the project, answering the key question: why are we doing this? And as the project progresses, why are we still doing it?
That’s really interesting, as the business case is one of the few elements that extends beyond the project lifecycle into the benefits realisation phase. It justifies why we’re undertaking the project, so it’s vital to ensure we have a clear understanding of that.
Absolutely. Another key element of the business case is options. You typically start with several options during the concept phase, then gradually discount some. For example, you might decide one option is too expensive, another doesn’t align with the organisation’s strategy, and so on, until you’re left with the chosen approach. The business case will outline this option as the selected way to deliver the project.
Options are indeed interesting. We’re often told to include the “do nothing” option, as it helps justify the need to take action. However, I’ve seen some business cases where options are created just for the sake of having different choices. I like the idea of refining and discarding options as you learn more about the project and its feasibility.
Yes, it’s important to show that you’ve considered various approaches before settling on the best one. It’s good to think through potential solutions and how they could be implemented.
We’ve talked about benefits and options—what about scope?
The business case should mention what is in and out of scope, though at this stage, we’re still talking at a high level. If something is obviously not going to be included, it should be noted.
What about success criteria?
Success criteria are vital—they help measure whether the project has been successful once completed. You should mention the usual criteria such as time, cost, and quality. Additionally, there should be an overview of the main risks, though not a detailed risk analysis at this stage—just a high-level view of potential showstoppers.
Yes, the business case is about the justification and viability of the project, so it’s essential to identify any potential blockers. We’re not looking for granular detail here, just the big-picture risks.
Finally, cost is a critical component. The business case should outline the investment required because it’s essentially asking for the funding to move the project forward.
We sometimes talk about the five-case model. How does that relate to the business case?
The five-case model is a structured way of organising the business case’s content. It provides a framework for discussing benefits, scope, risks, and other essential elements. The five cases include the strategic case, which addresses how the project aligns with the organisation’s broader strategy—for example, contributing to sustainability if that’s a current focus.
That’s crucial because there’s no point investing in a project that doesn’t align with the organisation’s overall direction.
Exactly. Then there’s the economic case, which looks at whether the project offers value for money. This might involve return on investment or investment appraisal. The commercial case examines whether the project is attractive to the wider market, possibly identifying a gap or building on an existing offer.
The financial case assesses whether the project is affordable, considering the organisation’s resources and priorities. Finally, the management case details roles and responsibilities, the lifecycle to be used, and other formal elements—essentially a checklist to ensure all key aspects are covered.
The five-case model is really useful because it prompts you to consider all angles of the business case, ensuring nothing is overlooked.
Yes, that’s a summary of the five-case model.
So, to summarise, the business case is the documented justification for the project. It outlines what will be done, how much it will cost, the benefits, the key risks, and the five-case model helps structure this documentation. Let’s now look at the two learning outcomes in the APM PMQ syllabus. The first is about understanding the tools and techniques used to determine factors influencing and impacting the business case. The syllabus specifically mentions three tools: PESTLE, SWOT, and VUCA. Let’s examine each in turn. We’ll start with SWOT. What does it stand for?
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It’s a well-known acronym and is often the first tool used when kicking off a project. It helps gather people around the table to discuss the project’s strengths, such as having the right people available, and its weaknesses, where you might be struggling.
The second half of SWOT—opportunities and threats—always reminds me of risk classification, where a positive risk is an opportunity, and a negative risk is a threat.
Yes, risks can indeed be positive opportunities as well as negative threats, and SWOT highlights that. It’s also helpful that SWOT breaks down into internal and external factors, making it a robust model that has stood the test of time.
Now let’s look at PESTLE. What does it stand for?
PESTLE focuses on the external environment, unlike SWOT, which looks more at the project itself. PESTLE stands for Political, Economic, Social, Technological, Legal, and Environmental factors. For example, politically, your project might be influenced by a new government or changes in funding rules.
Economically, factors like exchange rates or a cost of living crisis might impact your project. Social factors could include work-life balance expectations from your team or societal trends like an ageing population. Technological factors might include the impact of AI on your project delivery—how can you use it to enhance what you’re delivering?
Legal factors include the laws and regulations your project must comply with, such as health and safety or GDPR. Finally, environmental factors consider the impact your project might have on the environment, and the growing focus on corporate social responsibility.
PESTLE is a comprehensive model that helps draw out factors you might not have immediately considered. It encourages you to look beyond your immediate environment.
Exactly—it prompts you to consider the wider context and how external factors might impact your project.
Finally, let’s talk about VUCA. What is it, and how does it help determine factors that might impact the business case?
VUCA is a newer model, originating from the military to describe the uncertainty of war. It stands for Volatile, Uncertain, Complex, and Ambiguous. It’s used to frame things that are inherently unpredictable. For example, volatility refers to the speed of change—how quickly something might disrupt your project.
Uncertainty means being unable to predict what will happen, regardless of the pace of change. Complex refers to the number of variables at play, such as different cultures, working environments, or laws, especially if you’re operating across multiple countries. Finally, ambiguity reflects the lack of simple answers—sometimes there’s no straightforward solution to the problems you face on a project.
VUCA is particularly useful for analysing the future and might influence how you structure your project. For instance, in a volatile or uncertain environment, you might lean towards an iterative project lifecycle, as it’s better suited to handling unpredictability.
That’s really helpful. We’ve had a good discussion about the first learning outcome. The second learning outcome addresses the dynamic nature of the business case. It states that we must understand the importance of regularly reviewing the impact of any changes on the business case and recognise that the business case forms the baseline for the project. There’s a lot to unpack here. We talked at the beginning about creating the business case during the concept phase and narrowing down options. How do we establish a baseline for the business case?
We start developing the business case in the concept phase, and it’s firmed up in the definition phase with the detailed Project Management Plan (PMP). The business case and PMP are then baselined at the end of the definition phase. From that point, any changes must go through change control, especially in a linear lifecycle. However, even in an iterative lifecycle, where changes are constant, it’s crucial to assess how any change impacts the business case.
The business case shouldn’t just be a document that’s shelved until the end of the project. It should be regularly reviewed, not only when changes occur but also during formal stage meetings. The project manager should consistently refer back to it, assessing whether it’s still valid and whether the project remains justified.
Sometimes people think the business case only needs to be reviewed when significant changes happen, but even if everything is going according to plan, you’re still spending money and moving towards benefits realisation. So, it’s essential to keep the business case under review to ensure continued justification.
Exactly. The syllabus emphasises that the business case is the justification for the initiation, investment, and continuation of a project. We must check at each stage gate whether it’s still worth proceeding.
Continued justification is crucial because, in the worst-case scenario, if the benefits can’t be delivered, the project might need to be stopped. Achieving those benefits is the reason we’re doing this, so the business case really is the driving force throughout the project.
We’ve covered everything the syllabus item mentions. The business case is an interesting topic, closely linked to many other areas, particularly benefits management. As we’ve said, that’s a significant part of the business case, and we have another podcast that covers that.
But for now, I think we’ve covered everything on the business case. Thank you very much, Lisa.
Thanks, Ruth. No problem. Thank you.
