PM 902 Business Case (Small)

Template & Guide

This guide is intended to be read in conjunction with the following template for the
development of a Business Case for a small project. As such the Guide should be
removed from the front of the final document.
Another template for the development of a business case for a larger, more complex
project (! ""# Business Case$ has also been developed.
The templates are being continuousl% improved, and feedbac& on suggested
improvements to this template are appreciated b% contacting roject 'ervices at
!(nfo)dpac.tas.gov.au.
*('C+A(!,-
This material has been prepared for use b% Tasmanian Government agencies
and (nstrumentalities. (t follows that this material should not be relied upon
b% an% other person. .urthermore to the extent that /this material is relied
upon0, the Crown in -ight of the 'tate of Tasmania gives no warrant% as to
the accurac% or correctness of the material or for an% advice given or for
omissions from the material. 1sers rel% on the material at their own ris&.
2ersion 3.* (3 4ovember #""5$
Department of Premier and Cabinet, Tasmania
!at is a Business Case"
The Business Case is a one6off, start6up document used b% senior management to
assess the justification of a proposed project, or to assess the options for a project that
has alread% received funding. (f approved, it confirms senior management support
and7or resourcing for a recommended course of action (option$.
!# $ould #ou de%elop a Business Case"
A Business Case is developed to8
gain approval to proceed with a project9
obtain resourcing for a project through internal departmental processes9 or
where resourcing is alread% available, to document what the project will
accomplish for the funding and how (gain agreement on the project scope$.
The document enables those approving the resources to anal%se the rationale for the
project b% assessing the economics and impact of the project and comparing these
against other factors, such as the major ris&s and the prevailing political environment.
:here an Agenc%, *ivision or Business 1nit has a number of project initiatives, the
Business Case can be used as a tool to prioritise the various initiatives.
!en $ould #ou de%elop a Business Case"
Approval to develop a Business Case is usuall% obtained from the roject 'ponsor or
roposer. This ma% be as a result of acceptance or approval of a preceding stage such
as a Corporate lan for a *epartment or a Business lan for a Business 1nit. The
Business Case expands the proposals developed in these documents in order to8
obtain approval for resourcing for the preferred option9
attain agreement on the scope of the project9 and
gain authorisation to proceed to the next step of the project (usuall% the
roject Business lan$.
Alternatel%, direction ma% be given b% the proposer of a project to proceed directl% to
the development of a roject Business lan. This ma% cause problems if the scope has
not been agreed or if there has been no assessment whether the resources are sufficient
for the scope.
:hat %ou need before %ou start8
Agreement to proceed with the development of the Business Case from the
roject 'ponsor or roposer.
Agreement establishing the scope of the Business Case (usuall% verbal or a
short note$.
Department of Premier and Cabinet, Tasmania ii
;nowledge and understanding of the development of a Business Case, as
outlined in the Tasmanian Government Project Management Guidelines.
<ptional
An% of the following documents 6 roject roposal, 'trategic (nformation
'%stems lan, rocess -eview -eport or .easibilit% stud%
3
.
;nowledge and understanding of performing an economic assessment on the
option(s$, for example b% preparing a Benefit7Cost7-is& Anal%sis
#
.
Corporate7Business lan for the *epartment7Business 1nit.
*epartmental roject (nitiation Guidelines.
:hat %ou will have when %ou are finished8
A completed Business Case that is read% for acceptance b% the roject 'ponsor or
roject 'teering Committee through internal departmental processes or the Budget
Committee process.
&o$ to use t!is template"
The template contains sections which are either optional or can be developed at a
number of levels of detail depending upon individual need. 'ections that are not
re=uired ma% be deleted, indicate that the section is not applicable or refer to another
document.
All documents developed based on this template should include an appropriate
ac&nowledgement.
A number of different text st%les have been used within the template, as follows8
Text in italics is intended to provide a guide as to the &ind of information
that can be included in a section and to what t%pes of projects it might be
applicable.
Text in normal font is intended as examples.
Text enclosed in >angle brackets? is intended to be replaced b% whatever it
is describing.
3
.or a definition of these underlined terms, refer to the Project Management Glossary
#
.or further information about *ocumenting Costs and Benefits, refer to the Project Management
Guidelines
Department of Premier and Cabinet, Tasmania iii
'Title(
Business Case
Organisational Unit
*,A-T!,4T <. ...
2ersion ".A (dd mmm %%%%$
D)C*M+,T -CC+PT-,C+ and .+/+-S+ ,)T0C+
This is >release7version? >n.n? of the >Title? Business Case.
The Business Case is a managed document. .or identification of amendments each page
contains a release number and a page number. Changes will onl% be issued as a complete
replacement document. -ecipients should remove superseded versions from circulation. This
document is authorised for release once all signatures have been obtained.
-,A-,*8 *AT,8@@@7@@@7@@@
(for acceptance$ (>name?, -esponsible <fficer$
ACC,T,*8 *AT,8@@@7@@@7@@@
(for release$ (>name, title?, Business Case 'ponsor$
This document has been derived from a template prepared b% the *epartment of remier and
Cabinet, Tasmania. The structure is based on a number of methodologies as described in the
Tasmanian Government Project Management Guidelines.
.or further details, refer to http877www.projectmanagement.tas.gov.au.
<Title> : Business Case ersion !"# Page ii
Table of Contents
1. Introduction/Background.................................................................................................
2. Overview...........................................................................................................................
2.1. Vision.............................................................................................................
2.2. Organisational Objective..............................................................................
3. The Business Case...........................................................................................................
3.1. Purpose of the Business Case......................................................................
3.2. Business Case Sponsor.................................................................................
4. ituational !ssess"ent and #roble" tate"ent...........................................................
$. !ssu"%tions and Constraints.........................................................................................
&. Identification and !nal'sis of O%tions............................................................................
6.1. Identifcation of Options...............................................................................
6.2. Comparison of Options..................................................................................
6.3. Recommended Option...................................................................................
(. I"%le"entation trateg'..................................................................................................
7.1. Project Title...................................................................................................
7.2. Target Outcomes/Benefts............................................................................
7.3. Outputs..........................................................................................................
7.4. Work Plan......................................................................................................
7.5. Budget............................................................................................................
7.6. Other Resources............................................................................................
). #ro*ect +anage"ent ,ra"ework.....................................................................................
8.1. Governance....................................................................................................
8.2. Quality Management....................................................................................
8.3. Organisational Change Management..........................................................
<Title> : Business Case ersion !"# Page iii
-. !%%endices.......................................................................................................................
!%%endi. !. Benefit !nal'sis...................................................................................................
!%%endi. B. /isk !nal'sis........................................................................................................
<Title> : Business Case ersion !"# Page iv
$ntroduction%Background
12 0ntrodu3tion4Ba356round
T&is is used to introduce t&e business 'roblem( brie)l* describe +&at &as &a''ened in t&e 'ast to
address t&e 'roblem( and +&at t&e current status is at t&e time o) +riting t&e Business Case" $n
ot&er +ords( set t&e scene )or t&e rationale or reason,s- )or develo'ing t&e Business Case at t&is
'articular time.
22 )%er%ie$
2.1. 0ision
/&at is t&e goal o) t&e 'roject( +&at is it e0'ected to deliver. # &ig& level descri'tion o) t&e
objective,s- o) t&e recommended o'tion contained in t&is Business Case ,a one liner-"
2.2. Organisational Ob*ective
#ll 'rojects s&ould relate to and 'roduce results t&at relate to a 're1de)ined organisational
goal,s-" T&is s&ould be included &ere" T&e relations&i' bet+een t&is initiative and t&e
Cor'orate%2trategic 'lan s&ould be described" T&e 3elations&i' to t&e im'lementation o)
t&e Tasmania Toget&er benc&marks s&ould also be described"
72 T!e Business Case
3.1. #ur%ose of the Business Case
/&* is t&e Business Case being 'roduced.
Generall* it is to:
de)ine t&e business need or 'roblem in detail(
anal*se o'tions ,+&ere resources &ave alread* been allocated t&is ma* involve
determining +&at can be delivered +it& t&ose resources-(
identi)* costs( bene)its and risks( and
to 'ut )or+ard a 'ro'osal to senior management )or a''roval to 'roceed +it& t&e
'roject( or to t&e )unding source )or a''roval )or )unding )or t&e 'roject"
3.2. Business Case %onsor
/&o is s'onsoring t&e develo'ment o) t&e Business Case.
<Title> : Business Case ersion !"# Page 4
82 Situational -ssessment and Problem Statement
T&is section s&ould clearl* establis& t&e bene)it to t&e organisation )or 'roceeding +it& t&e
'ro'osed 'roject" $t s&ould contain:
a descri'tion o) t&e relevant environmental conditions5
an assessment o) &o+ t&e business needs are currentl* being met or not met5
an anal*sis o) t&e ga' bet+een t&e current situation and t&e stated objective,s-"
92 -ssumptions and Constraints
$t is essential t&at assum'tions made during t&e 'lanning 'rocess are recognised and recorded"
#n* re6uirements )or s'ecialist resources or skills s&ould be identi)ied and an* de'endencies t&at
e0ist +it& ot&er 'rojects or initiatives"
7o not create an* i) *ou can8t identi)* an*99
:2 0dentifi3ation and -nal#sis of )ptions
T&is is a &ig& level anal*sis o) t&e 'ossible alternatives t&at could be em'lo*ed to bridge t&e ga'
bet+een t&e current situation and +&at is 'ro'osed( as outlined in 2ection :"
&.1. Identification of O%tions
;ist t&e o'tions t&at +ere identi)ied )or anal*sis" Generall* i) a detailed anal*sis o) o'tions is
re6uired( t&en )e+er signi)icant o'tions are 're)erable to man*" 2ome o'tions t&at ma* need to be
considered are:
O'tion 41 7o not&ing
O'tion < 1 #n o'tion t&at +ould ac&ieve t&e same result as t&e 're)erred o'tion
O'tion = 1 T&e 're)erred o'tion
&.1.1. O%tion 1 1 23escri%tion4
>or eac& o'tion( t&e )ollo+ing in)ormation s&ould be 'rovided:
Bene)its % dis1bene)its5
Costs5
3isks5
2take&older im'act5
$ssues5 and
Ot&er evaluation or )ilter criteria( i) a''ro'riate"
<Title> : Business Case ersion !"# Page <
?ote: >or man* initiatives t&e bene)its%dis1bene)its are not directl* 6uanti)iable or )inancial( )or
e0am'le im'rovements in service deliver* or ac&ievement o) Government 'olic* objectives" #
'ossible +a* o) assessing t&ese is included in #''endi0 #" T&is re6uires all major stake&olders to
be identi)ied" #n o'tional risk anal*sis +orks&eet is included in #''endi0 B"
Costs s&ould include t&e cost )or 'roducing all o) t&e out'uts ,deliverables-( 'roject management
costs( risk management costs and 6ualit* management costs" T&ese include direct( indirect and
recurrent costs to 'rovide a )ull 'icture o) t&e associated costs )or eac& o'tion"
&.1.2. O%tion 2 1 2Description>
3e'eat t&e 'rocess as 'er O'tion 4"
&.1.3. O%tion 3 1 2Description>
3e'eat t&e 'rocess as 'er O'tions 4 and <"
&.2. Co"%arison of O%tions
Com'are t&e o'tions b* summarising t&e bene)its( dis1bene)its( costs( risks and issues" T&e
)ollo+ing table is an e0am'le"
Criteria <ption 3 <ption # <ption 5
Benefits8
'ta&eholder A
'ta&eholder B
@ or rating
*is6Benefits8
'ta&eholder A
'ta&eholder B
Costs8
direct
indirect
recurrent
-is&s8
initial
minimisation7
mitigation costs
resulting ris&
'ta&eholder (mpact8
(ssues8
<Title> : Business Case ersion !"# Page =
&.3. /eco""ended O%tion
T&e recommended o'tion )rom t&e 'revious anal*sis s&ould be identi)ied &ere"
;2 0mplementation Strate6#
Based on t&e in)ormation outlined in 2ection A )or t&e o'tion t&at +as recommended( begin to
sco'e t&e 'roject t&at +ill im'lement t&e recommended o'tion and describe &o+ t&e 'roject +ill be
managed" T&e in)ormation in t&e )ollo+ing sub1sections are im'ortant( as t&e* +ill )orm t&e basis
o) a Project Business Plan i) t&e 'roject%initiative 'roceeds" $t de)ines t&e sco'e o) t&e 'roject99
(.1. #ro*ect Title
,BCD- #bbreviation and ;ong Title"
(.2. Target Outco"es/Benefits
;ist t&e target outcomes%bene)its( t&e measures +&ic& +ill be used to measure t&eir success(
t&e dates )or ac&ievement and +&o is accountable" T&ese s&ould be derived )rom t&e table
in section A"<"
(.3. Out%uts
;ist t&e 'roject out'uts ,deliverables-" T&ese are ne+ or modi)ied 'roducts( services(
businesses( or management 'ractices t&at need to be im'lemented to meet eac& identi)ied
outcome" $denti)* +&o ,'roject customer- +ill utilise eac& out'ut to generate t&e target
bene)its"
(.4. 5ork #lan
Outline o) 'roject '&ases( major areas o) +ork and ke* milestones"
(.$. Budget
2ummarise t&e 'roject8s budget and e0'ected e0'enditure"
(.&. Other /esources
;ist ot&er resourcing re6uirements( )or e0am'le &uman resources( accommodation( $T
e6ui'ment( in)ormation re6uirements"
<Title> : Business Case ersion !"# Page :
<2 Pro=e3t Mana6ement >rame$or5
).1. 6overnance
7etermine +&at 'arties +ill )orm t&e governance structure )or t&e 'roject and identi)* +&o
ma* be a''roac&ed to )ul)il eac& role"
#s a minimum *ou +ill need in *our governance structure a:
o Project 2'onsor5 and
o Project Manager"
Cou ma* &ave one or more o) t&e )ollo+ing 'arties in *our governance structure"
o Project Team5
o 3e)erence Grou's5
o /orking Grou's5
o Eualit* Consultants"
).2. 7ualit' +anage"ent
Brie)l* describe t&e a''roac& to 6ualit* management( +&ic& ma* include:
met&odologies and standards5
c&ange( issue( and 'roblem management5 and
revie+ and acce'tance 'rocedures"
).3. Organisational Change +anage"ent
Brie)l* describe t&e a''roac& to managing organisational c&ange t&roug&out t&e 'roject"
).4. #ost #ro*ect /eview
Brie)l* describe t&e a''roac& to ca'turing t&e lessons learnt t&roug&out t&e 'roject and
+&at revie+ +ill be done to assess +&et&er t&e initiative delivered t&e intended bene)its"
92 -ppendi3es
#''endices can &el' t&e document )lo+ better( es'eciall* during t&e anal*sis and justi)ication
sections ,i"e" during t&e FargumentG 'arts- b* e0tracting in)ormation out o) t&e bod* o) t&e
document )or re)erence" >or e0am'le( t&e )ollo+ing ma* be use)ul:
# detailed cost%bene)it%risk anal*sis )or eac& o'tion ,onl* i) re6uired-
<Title> : Business Case ersion !"# Page H
# risk anal*sis 'lan"
<Title> : Business Case ersion !"# Page A
-ppendi? -2 Benefit -nal#sis
>or eac& o'tion assess &o+ eac& ke* stake&older grou' ,or individual stake&olders- ma* be
im'acted b* t&e 'roject and &o+ t&e* ma* im'act on t&e 'roject" T&is ma* be 'ositive or negative"
#llocate a rating( Iig& J =( etc and total in t&e rig&t column"
Option <# - Description>..
ositive (mpact 4egative (mpact
!ajor
'ta&eholder
Aigh
(5$
!edium
(#$
+ow
(3$
4il
("$
+ow
(63$
!edium
(6#$
Aigh
(65$
-ating
Customer
(mpacted
B%
roject
#
3
BBBB
(mpact
<n
roject
63
Business <wner
(mpacted
B%
roject
5
C
BBBB
(mpact
<n
roject
3
(mpacted
B%
roject
BBBB
(mpact
<n
roject
(mpacted
B%
roject
BBBB
(mpact
<n
roject
Total
D
<Title> : Business Case ersion !"# Page K
Summary of Options
>or eac& stake&older grou' trans)er t&e total ratings onto t&is s&eet to give a direct com'arison
bet+een t&e o'tions"
'ta&eholder <ption 3 <ption # <ption 5
BBBB
BBBB
BBBB
BBBB
BBBB
<Title> : Business Case ersion !"# Page L
-ppendi? B2 .is5 -nal#sis
.or each option fill in the wor&sheet on the next page with the major ris&s.
0nstru3tions8
3. .or each ris& wor& out what grade there is associated with it. This is onl% a =uic& estimate
using the table below to produce an A to , grading. (gnore those ris&s with a grading of *
and ,. (see ris& management fact sheet for more details$
#. .or the A and B gradings estimate what minimisation and mitigation strategies should be put
in place, their cost and the resultant grading (i.e. the impact of the strateg%$.
5. .or each grading allocate a numerical rating, eg AED, BEC, CE5, *E#, ,E3.
C. Add these together to get a total grading for each ris&. The lower the total score the lower
the level of ris&.
D. Add the scores for each ris& to get a total for the option. This allows a comparison to be
made between options as to the comparative level of ris& of each option.
Grade @ Combined effe3t of /i5eli!ood4Seriousness
Seriousness
low medium high ,FT-,!,
/i5eli!ood
low , * C A
medium * C B A
high C B A A
<Title> : Business Case ersion !"# Page M
)ption AAAAAAAAAAAAAAAAAAAAAAA22A
-is& -ating
!ajor -is&s
(nitial
Grading
'trateg% Cost
-esultant
Grading
-ating
4ew s%stem instabilit% causes
increased resource re=uirements
C
47A
6 C 5
4ot able to meet the major user
re=uirements
A
1se a detailed acceptance testing
plan and verif% each phase
D""" C 5
There are no nett improvements
for the users C
47A
6 C 5
Customers are inconvienced b%
the s%stem and thus there is bad
publicit%
B
1se a newsletter to &eep the
customers informed
#""" * #
Total
GH""" 33
<Title> : Business Case ersion !"# Page 4!