FIT2002 Chap.2 Business Cases and Project Initiation
Business Cases and Project Initiation
Project initiation turns an attractive idea into an authorised commitment. A business case explains the problem or opportunity, compares feasible options and tests whether expected benefits justify costs, risks and organisational disruption.
A project proposal communicates the recommended investment, while a charter gives the selected project formal standing and names its high-level boundaries, objectives, stakeholders and governance. These artefacts serve related but different decisions: whether to invest, what to approve, and who may act.
Good initiation evidence is selective rather than decorative.
An option is not credible because it contains many benefits; it is credible when assumptions are visible, alternatives are compared consistently, and success criteria can later be verified. A sponsor may authorise exploration while withholding commitment to full delivery.
In a scenario answer, distinguish the decision being requested, identify missing evidence, and recommend the smallest governance action that resolves the uncertainty.
What this chapter covers
- 01
Business need and strategic objective as the starting justification
- 02
Options analysis using benefits, costs, feasibility and risk
- 03
Business cases as investment evidence rather than delivery plans
- 04
Project proposals as recommendations for a selected course of action
- 05
Project charters as formal authority and high-level boundaries
- 06
Sponsors, project managers and approval rights during initiation
- 07
Assumptions and success criteria that remain testable after approval
Worked example · free
Recommend an initiation decision for a proposed booking platform
- +1State the need in measurable terms: reduce laboratory-booking conflicts while preserving integration with existing university services.
- +2Compare options on a common basis. Option B offers a larger claimed improvement but costs $120,000 more and carries unresolved integration uncertainty.
- +2Recommend a bounded validation step for Option B or selection of Option A; do not authorise full replacement using an untested assumption.
- +2Record the selected objective, high-level scope and exclusions, approved budget boundary, sponsor, project manager authority and key risks in the charter.
- +2Define verifiable success criteria, such as conflict reduction measured over the first teaching period and successful integration tests before rollout.
Key terms
- Business Case
- The decision document that justifies investment by connecting a need to options, costs, benefits, risks and feasibility. It should permit comparison and later review of the assumptions used.
- Project Proposal
- A structured recommendation describing a candidate project and why it should proceed. It communicates the preferred response but does not itself guarantee formal authority to deliver.
- Project Charter
- The high-level document that formally authorises a project and establishes objectives, boundaries, governance and the project manager's authority. It becomes a reference point for later decisions.
- Success Criteria
- Observable conditions used to judge whether agreed delivery and outcome expectations have been met. Strong criteria specify a measure, target, timing and responsible evaluator.
- Assumption
- A condition treated as true for planning even though it is not yet confirmed. Important assumptions require an owner, a validation method and a consequence if they prove false.
- Sponsor
- The accountable senior role that champions the project, secures organisational support and makes or escalates key investment and governance decisions. Sponsorship is not the same as daily task management.
Business Cases and Project Initiation FAQ
What is the main difference between a business case and a charter?
A business case answers whether an investment should proceed and why a particular option is justified. A charter follows the selection decision and gives the project formal authority, boundaries and governance. They can share facts, but their decision purposes differ. If the preferred option remains unproved, the charter should authorise validation rather than pretending full delivery is settled.
When should an assumption be treated as a risk?
An assumption deserves risk treatment when its failure would affect objectives and there is genuine uncertainty about whether it will hold. Record what is assumed, the impact of failure, how and when it will be tested, and who owns the response. This transforms a vague caveat into something the governance process can monitor and act upon.
How do I make success criteria measurable without inventing precision?
Start with the decision the sponsor needs to evaluate, then select an observable indicator, target range, measurement period and evidence source. If no defensible numerical target exists, specify a verifiable condition and who accepts it. Avoid false precision: a clearly owned usability threshold can be stronger than an unsupported promise of an exact productivity gain.
Assessment move
Revise initiation as a sequence of governance decisions. Make three columns headed justify, recommend and authorise, then place business-case, proposal and charter content under the correct purpose. Use one fictional project across your notes so that need, options, chosen path and charter boundaries stay connected.
For each business-case practice, include at least one alternative and one do-minimum option; compare them using the same criteria rather than describing only the preferred solution. Highlight assumptions in a separate colour and add a validation action beside each. Practise writing success criteria that contain an indicator, threshold, measurement period and owner.
Finally, rehearse scenario responses that recommend staged authority when evidence is incomplete. This shows judgement: project governance can approve discovery or a pilot without granting an irreversible commitment to full implementation.
Working through Business Cases and Project Initiation in FIT2002? Sia is AskSia’s AI Project Management tutor — ask any FIT2002 Business Cases and Project Initiation question and get a clear, step-by-step explanation grounded in how FIT2002 is taught and assessed. Read this chapter free, then take your hardest questions to Sia.
