Behind every key decision should be a compelling business case. They are a roadmap for decision-makers, ensuring that resources are invested wisely. However, preparing a business case that strikes the right balance between providing sufficient detail, proportional to the scale of the investment decision but effective in securing stakeholder buy-in, can be challenging.
31ten has produced a wide range of Business Cases for clients that are proportional to HM Treasury Green Book guidance and by doing so developed a thorough understanding of the critical factors that determine the level of detail required. Drawing from our extensive experience we can offer practical tips on how to create an impactful and appropriate document.
Scalable and Proportionate – Determining the Level of Detail Required
The success of a business case heavily relies on tailoring the level of detail to match the unique aspects of the project and the strategic importance of the proposal. Here are the key factors to consider:
- Project Value: The financial scale of the project plays a significant role in determining the depth of the business case. Larger investments, often classed as major spending proposals (over £2 million), generally demand a more comprehensive justification using a three-stage approach to prepare the business case (SOC, OBC, FBC).
- Risk: Getting the balance right is key as the process of creating a business case should match the level of project risk and the risk appetite of the organisation. Those spending proposals that have predominantly low-impact risks should require less detailed risk analysis and the approach should complement the need for agility and responsiveness.
- Benefits: The effort expended on developing the proposal, its quantity and the depth of the work to be undertaken should also reflect the anticipated benefits; whether the proposal is strategic, operational or job/task related will steer whether a light cost-benefit analysis (CBA) or full Economic Appraisal, including CBA and optimism bias is required.
- Stakeholder Picture: Preparing a business case is an iterative process and should involve key stakeholders throughout to secure their buy-in. Different stakeholders have varying interests and concerns and to gain their support, it’s crucial to identify key questions the business case must answer and address with a commensurate level of detail.
- Level of Innovation or Complexity: Where a proposal is relatively unique, untested or includes innovative projects the business case may require a more in-depth exploration of their feasibility to explain the proposition, demonstrate their potential benefits convincingly and secure the stakeholder buy-in required.
- Dependencies with Other Projects: Projects intertwined with or dependent on other initiatives may require a higher level of detail to showcase their alignment.
- Familiarity: An organisation’s familiarity and recognition of what makes a good Business Case will shape the depth of the business case required; with those organisations less familiar with the business case process initially taking longer to make decisions and requiring more detail to justify the case for change.
- External Review: Projects with external funding or those subject to external scrutiny such as gateway review may demand a higher level of detail to address potential questions and concerns.
- Decision Use: Whether the business case is for exploring options or final investment decisions impacts the level of detail required.
- Golden Thread: The fundamental minimum for a business case is that the golden thread i.e. the path from the project to the objective can be clearly identified throughout.
Key Elements to Include at Each Stage
Best Practice is that business cases should be structured using the Five Cases Framework, as outlined in The Green Book guidance by HM Treasury.
The level of detail in each case will depend on the Business Case Stage that has been reached, whether the Strategic Outline Case (SOC), the Outline Business Case (OBC), or the Full Business Case (FBC), in addition to the key factors to consider outlined earlier.
A storyboard approach can be an invaluable tool in clarifying the level of detail needed at the outset before drafting the business case. This approach will help answer the key questions at each stage and ensure a coherent and impactful document.
The storyboard approach can also help unpick and present a structured narrative that follows a “golden thread” throughout, functioning as the backbone of the business case.
The several key elements that all business cases should have are:
- Strategic Case: The strategic case sets the tone for the business case. It should clearly present the rationale for intervention and the case for change amongst the strategic and policy context, setting specific objectives for the desired outcome.
- Economic Case: The economic cases should consider a wide range of potential solutions or options and establish a preferred way forward, particularly during the Strategic Outline Case (SOC) and Outline Business Case (OBC) stages.
- Commercial, Financial & Management Case: These cases should ensure that the business case appeals and are deliverable within the market or by suppliers. They should demonstrate affordability and funding arrangements while ensuring that management aspects are in place to successfully deliver the proposal.
Building a proportional business case is crucial for effective decision-making and successful project delivery. By aligning the level of detail with project-specific factors, employing a storyboard approach, and considering proportionality, you can create and craft a compelling business case that captures stakeholders’ attention, addresses key concerns, and paves the way for project success.
If you are interested in finding out more about Business Cases or our Proportional Business Case offering, please contact Laura Bridges – firstname.lastname@example.org