Why are Business Cases important?

A business case provides decision makers and the public as well as the private sector with a

management tool for transparent, evidence-based decision making.

Successful projects are a result of:

•Realistic planning

•Clear focus on end goal

•Robust implementation plan

•Consideration of associated risks

From the experts…

Richard Pharro, CEO, APMG International,

• “Much is written about why projects fail - but I would like to strike an optimistic and positive note

about successful projects. I think a successful project could be summarized as delivering all the

benefits presented in the business case. Many of you will view the business case as only financial

and predominately focused on Return on Investment (RoI).

“The Five Case Model which is being launched on May 1st goes far beyond the financial

dimension. The Five Case Model is a framework for ‘thinking’ to help answer the three basic

questions of - ‘where are we now?’, ‘where do we want to be,’ and ‘how are we going to get

there?”

Mark Williams, CIPFA- The Chartered Institute of Public Finance and Accountancy,

• “Treasury guidance which has been refined and tested over many years - provides a clear

framework for thinking about spending proposals and a structured process for appraising,

developing and planning to deliver best public value.

• “More efficient planning and approval process saves between 30% and 40% in time taken and

cost of production of business cases.”

About The Five Case Model

The Five Case Model is the UK government’s best practice approach to planning spending

proposals and enabling effective business decisions. The Five Case Model is a framework for

‘thinking’ to help answer three basic questions for – ‘where are we now?’, ‘where do we want to

be?’ and ‘how are we going to get there?’

This provides a step by step guide to developing a business case by:

• Establishing a clear need for intervention - a case for change.

• Setting clear objectives - what you want to achieve from the investment.

• Considering a wide range of potential solutions - ensuring an optimal balance

of benefits, cost and risk.

• Putting the arrangements in place to successfully deliver the proposal.

• The Five Case Model methodology has been used by UK Government departments and the

wider public sectors for many years.

Components

The five key components of this methodology are;

• The Strategic Case:

It demonstrates that the spending proposal provides business synergy and strategic fit

and is predicated upon as a robust and evidence based case for change.

• The Economic Case:

It demonstrates that the spending proposal optimizes public value.

• The Commercial Case:

It demonstrates that the ‘preferred option’ will result in a viable procurement and well-

structured deal.

• The Financial Case:

It demonstrates that the ‘preferred option’ will result in a fundable and affordable deal.

• The Management Case:

It demonstrates that the ‘preferred option’ is capable of being delivered successfully,

in accordance with recognized best practise.

Developing Better Business Cases based on the Five

Case Model

Prepare • Prepare the Strategic Outline Programme (SOP)

Outlook • Scoping the scheme and preparing Strategic Online Case (SOC)

Formulate

• Planning the scheme and preparing the Outline Business Case (OBC)

Infrastructure • Procuring the solution and preparing the Full Business Case (FBC)

Implement • Implementation - use business case as a reference point and log material changes required.

Evaluate

• Evaluation – A business case can be used in both pre and post evaluation review to monitor if the ‘preferred option’ has delivered based on various factors outlined in OBC.

The BBC approach

Source: www.newzealand.govt.nz

The BBC methodology promotes timely and continuing engagement with stakeholders during

the business case development process to ensure objectives are aligned. It has been proven

in the public sector, but applicable to all that the key stakeholders are involved in the capital

investment processes at the right time, with the right information and support.

Further information

• Better Business Cases certification overview: – http://www.apmg-international.com/en/qualifications/better-business-cases/better-business-cases.aspx

• Better Business Cases Accredited Training Organizations (ATOs): – http://www.apmg-international.com/en/search/ao-search-en.aspx

• HM Treasury ‘Green Book’ guidance: – https://www.gov.uk/government/publications/the-green-book-appraisal-and-evaluation-in-central-

governent

• The Five Case Model resources: – http://wales.gov.uk/funding/wiipindex/5cmodel/?lang=en

I hope you have found this presentation informative. If you have any further questions or are keen to

receive more information regarding APMG International’s BBC certification – please do not hesitate in

contacting me.

Thank you for your time,

Shruti Deshpande

Marketing Campaign Manager

Shruti.deshpande@apmgroup.co.uk

+44(0) 01494 836186

Twitter @Shruti_APMG

International