Benefits Nobody Owns
A local council is rolling out a new waste-collection routing system. The business case claims annual savings of £2.4m from reduced fuel and overtime, to be realised 'after go-live.' The project manager has built a detailed project plan and a risk register, but the benefits are described only as a lump sum with no baseline, no measurement method and no named owner. The operations director, who would own the benefits, was not invited to the project board. At the second stage boundary, the project manager reports that the project is on time and on budget and recommends authorising the next stage. The Senior User supports this because 'the numbers look good.' The Executive is uneasy but cannot articulate why.
1. Explain why 'on time and on budget' is not sufficient justification to authorise the next stage.
Read the worked answer
Continued business justification is about benefits, not delivery metrics
PRINCE2 requires the project board to re-confirm at each stage boundary that the project is still desirable, viable and achievable - and, critically, that the business case still holds. On time and on budget says only that the project is being executed efficiently; it says nothing about whether the outputs will deliver £2.4m of savings.
What is missing
- Benefit baseline: what is the current fuel and overtime spend? Without a baseline, £2.4m cannot be verified.
- Measurement method: how will savings be measured, by whom, and when?
- Benefit owner: the operations director would realise the benefits but is not on the board. Benefits outside the project's control need an owner who is accountable after closure.
- Benefits realisation plan: how and when the benefits will be measured and reviewed, including after the project ends.
- Dis-benefits: e.g. disruption to crews, retraining cost, temporary overtime during transition.
Judgement
A project that is on time and on budget can still be a bad investment. The Executive's unease is justified: the board should not authorise the next stage until the business case has measurable benefits, a named benefit owner and a realisation plan. The Senior User's 'the numbers look good' is not evidence.
2. What should the Executive do about the operations director's absence from the board?
Read the worked answer
The role gap
The operations director is the person who will realise the benefits - reduced fuel and overtime are operational outcomes, not project outputs. PRINCE2 distinguishes outputs (the routing system, delivered by the project) from outcomes (lower fuel and overtime, realised in the business). The Senior User is accountable for specifying and realising benefits, but realisation usually depends on business owners.
Options
- Appoint the operations director to the board as Senior User (or co-Senior User with the existing one), so the benefit owner is inside the governance.
- If board membership is impractical, appoint the operations director as benefit owner with a defined role in the benefits realisation plan, and require their attendance at stage boundaries.
- Record the gap as a risk on the risk register until resolved.
Judgement
The Executive should not proceed to the next stage without resolving this. The benefit owner must be named and involved; otherwise the £2.4m claim is unowned and the project will close with outputs delivered and benefits unmeasured. The Executive should raise this as an issue and require the board composition to change or the benefit ownership to be formally assigned.
3. How should the business case be improved before the next stage is authorised?
Read the worked answer
Required improvements
- Reasons: why this system, why now - link to council strategy and service pressures.
- Business options: do nothing, do minimum, do the project - with costs and benefits of each. The 'do nothing' option establishes the baseline.
- Expected benefits and dis-benefits: itemised, quantified where possible, with baseline figures for fuel and overtime.
- Timescale: when each benefit is expected and over what period.
- Costs: project costs plus ongoing running costs (licences, support, training).
- Investment appraisal: payback period, net present value or equivalent.
- Major risks: top risks and how they affect the case.
- Benefits realisation plan: measurement method, owner, review points.
Judgement
The board should authorise the next stage subject to the business case being updated with a baseline, itemised benefits, a named benefit owner and a realisation plan. If those cannot be produced, the board should consider whether the project should continue at all. The business case is a living document, not a one-off - it must be re-confirmed at every stage boundary.