Business case, benefits and value

0:00Sara: Welcome to Project Management Exam Prep.

0:02This episode is about the business case, benefits and value: why a project exists,

0:08and how you know it was worth it. Every project management exam tests it.

0:14Leo: You will learn how the three bodies frame it, how to keep a business case alive,

0:19how outputs become benefits, and how to watch the world outside.

0:23We finish with a drill, so keep a pen ready.

0:27Sara: Let us start with the three lenses. What does IPMA® say?

0:31Leo: IPMA®, the International Project Management Association, sets out its standard in

0:36the Individual Competence Baseline, the ICB4.

0:39Its element on strategy asks you to link the project to the organisation's strategy,

0:44and to write, defend and keep checking its justification, even if that ends the

0:49project. A second element, results orientation, keeps the focus on outcomes.

0:55Sara: And PMI®?

0:56Leo: PMI®, the Project Management Institute, publishes the PMBOK® Guide,

1:01its guide to the project management body of knowledge.

1:04The eighth edition makes focus on value a principle: judge the project by the value

1:10it delivers, not only by its outputs. The outline of PMI®'s Project Management Professional

1:17exam, the PMP®, asks you to help ensure value-based delivery, and to watch the business

1:23environment outside the project for changes.

1:26Sara: And APM?

1:28Leo: APM, the Association for Project Management, publishes the APM Body of Knowledge.

1:33It has sections on business cases and on benefits management.

1:37The syllabus of APM's Project Management Qualification, the PMQ,

1:42has an objective for each, and names tools that find the forces acting on a business

1:46case.

1:47Sara: Where do the words differ?

1:49Leo: In three places. First, the document. PMI® and APM say business case.

1:56The ICB4 says business or organisational justification.

2:00PMI® treats it as a business document, outside the project management plan.

2:05Sara: Second?

2:07Leo: The record for each benefit. APM calls it a benefit profile, and PMI® puts the same

2:13facts in its benefits management plan. The ICB4 tracks benefits with success factors

2:19and key performance indicators.

2:21Sara: And third?

2:23Leo: The world outside. PMI® calls these forces external enterprise environmental factors.

2:30APM's syllabus names checklists such as PESTLE.

2:34The ICB4 speaks of the organisational environment.

2:37Sara: What is the core, whichever exam you take?

2:41Leo: Three ideas. One: every project serves a strategy.

2:46The organisation's mission and vision become strategic objectives,

2:49and each project must bring benefits that serve one of them.

2:53Sara: Two?

2:54Leo: The business case justifies the investment.

2:57It states the need, weighs the options, including doing the minimum,

3:02by cost, benefit and risk, and recommends one.

3:06The sponsor owns it. The project manager often writes it and keeps it current.

3:11And it stays alive: you check it at every gate, and whenever something big changes.

3:15Stopping a project that no longer pays is good governance, not a failure.

3:21Sara: And three?

3:22Leo: Benefits come after outputs. An output is what the project delivers.

3:27An outcome is what changes when people use it.

3:30A benefit is the measurable gain from that change.

3:33Most benefits arrive after handover, so each one needs an owner in the business,

3:38a measure, a baseline, a target and a date.

3:41Value is what the benefits are worth, against the costs and any disbenefits,

3:47the harm a change can do.

3:49Sara: Does that change in agile work?

3:51Leo: The rhythm does. An iterative project delivers value in slices,

3:56ordering its backlog by value and user feedback.

4:00Its business case is often lighter at the start, and sharpened as the team learns.

4:04Sara: How does a business case stay alive?

4:07Leo: The first model sheet, free in the description, draws it as a cycle.

4:12Scan the need and the world outside. Build the case: options,

4:16costs, benefits and risks. Decide at the gate.

4:21Deliver the next stage. Then measure, and check again.

4:25At the centre is one question: is it still worth it?

4:28Continue, change course, or stop.

4:31Sara: What counts in that check?

4:33Leo: Only what is still to come: the cost still to spend, against the benefits still

4:38to come. Money already spent is gone, whatever you decide.

4:43Net present value, internal rate of return and payback, which compare money across

4:48the years, have their own episode.

4:50Sara: And the world outside?

4:52Leo: Scan it with a checklist such as PESTLE: political, economic and social forces,

4:58and technological, legal and environmental ones.

5:02Its roots are usually traced to Francis Aguilar's nineteen sixty-seven book on scanning

5:07the business environment. Then judge each change's effect on the case,

5:12and keep reviewing.

5:14Sara: How do you show which output leads to which benefit?

5:17Leo: With a benefits map, the second model sheet.

5:21Our version reads from left to right: outputs, outcomes, benefits,

5:26and the organisation's aim. Build it backwards, from the aim,

5:31so that every output needs a reason. Take a city that moves resident parking permits

5:36online. The outputs are the online service, a handheld check for wardens,

5:42and a trained service desk. The outcomes: residents renew online,

5:47and wardens check permits by licence plate.

5:50The benefits: fewer counter visits, and no paper permits.

5:54Both serve the city's aim of routine services online.

5:59Mark a disbenefit too: residents who are not online could be left behind.

6:04Sara: And the numbers?

6:06Leo: Say the city issues about twenty-six thousand resident permits a year,

6:10and the target is seventy percent online.

6:13That is about eighteen thousand two hundred permits without a counter visit.

6:18The head of parking services owns it, and keeps measuring after the project closes.

6:23Sara: How does this change between Mid-level and Senior?

6:27Leo: First, the two levels. They are this series' own labels.

6:31Mid-level means leading moderately complex projects, the level of IPMA® Level C and

6:38PMI®'s PMP® exam. Senior means leading complex projects and people,

6:44the level of IPMA® Level B and of APM's chartered status, Chartered Project Professional.

6:51At Mid-level, you keep one business case valid.

6:55Take Parking Permits Online, a city project that moves resident parking permits

6:59online in eight months. The project manager, Anna, drafts the case with the sponsor,

7:05the head of parking services. She checks it at every gate, and tests each change

7:09request against the benefits.

7:11Sara: And at Senior level?

7:13Leo: You make the case a tool for the board.

7:16Take One City Account, a thirty-month city project that brings fourteen online services

7:22under one login, led by Anna some years later.

7:26Each service names a benefit owner. The steering board releases funds at each phase

7:31gate, after Anna tests the case again. She also takes the board a new option:

7:36other public bodies could reuse the payment function.

7:40Sara: Now the drill. A city is moving resident parking permits online in eight months,

7:45on a budget of six hundred and forty thousand euros.

7:48Its business case expects savings of eight hundred and ninety thousand euros over

7:52four years. In month five, four hundred thousand is spent.

7:57Then a new national accessibility law adds sixty thousand euros of work.

8:02The finance controller says the total is now seven hundred thousand,

8:06over budget, so stop. What do you recommend?

8:08Leo: Pause and write your answer. You have forty-five seconds.

8:58Sara: First, the numbers.

9:00Leo: Leave out the four hundred thousand already spent.

9:02To finish, you need the two hundred and forty thousand left in the plan,

9:06plus sixty for the law. That is three hundred thousand still to come,

9:10against eight hundred and ninety thousand of savings.

9:14Continuing pays while the savings still to come exceed that cost.

9:18Three hundred is about a third of eight hundred and ninety.

9:21So the case holds while at least a third of the savings arrive.

9:25Even discounted, the margin stays wide.

9:28Sara: And the actions?

9:30Leo: Treat the law as a change. Update the business case, and ask the benefit owner to

9:35confirm the savings. Give the steering group the options, the numbers and your recommendation:

9:40continue, and meet the law.

9:43Sara: What lifts that to Senior?

9:45Leo: Tolerance and the system. Agree with the sponsor how far the savings may fall before

9:51you would stop. Check whether the law hits the city's other online services,

9:56and propose one shared solution. Make a scan of outside changes a standing item

10:02at every gate. And explain the decision to the team and the supplier.

10:08Sara: How do the exams ask this?

10:11Leo: IPMA®'s written exam asks for open answers; at Level B it may be oral.

10:16IPMA®'s certification also includes an interview, where assessors ask about your

10:21own projects, so note one business case you kept valid.

10:26The PMP® exam uses scenarios, and questions built on a case study or a chart.

10:31APM's PMQ asks for short written answers, such as why benefits must align with strategic

10:38objectives.

10:40Sara: Let us recap.

10:41Leo: One. Every project serves a strategy: trace each benefit to an objective.

10:47Sara: Two. The business case compares options and recommends one.

10:51The sponsor owns it; check it at every gate.

10:54Leo: Three. Outputs lead to outcomes, and outcomes to benefits.

10:59Give each benefit an owner and a measure after handover.

11:04Sara: Four. Decide on what is still to come. Money already spent does not count.

11:10Leo: And five. Scan the world outside, and feed it into the case.

11:15Sara: The model sheets and the study handout are linked in the description.

11:19Next time: governance, roles and assurance.