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Better Business Cases™ (based on The Five Case Model) by Mind Map: Better Business Cases™ (based on The Five Case Model)

1. Interactive Better Business Cases™ Glossary

2. Better Business Cases™ - a structured, iterative based business case development process. The primary objective of Better Business Cases™ is to improve decision making through fit for purpose business cases. The Better Business Cases™ can be easily integrated with OGC Gateway™ Reviews. The Better Business Cases™ Programme has been jointly developed by: HM Treasury and Welsh Government.

3. Large, complex proposals at the project level are developed in 3 iterations through

3.1. 1. Strategic Outline Case (SOC)

3.1.1. The key purpose of Strategic Outline Case is to:

3.1.1.1. Establish the strategic context for the spending proposal

3.1.1.2. Evidence the case for change

3.1.1.3. Establish the preferred way forward

3.1.2. Provides strategic context and confirms fit

3.1.3. Makes case for change

3.1.4. Refines the long list of options into a shortlist

3.1.5. Identifies preferred way forward

3.1.6. Indicates probable costs, benefits and risks

3.1.7. Outlines delivery arrangements

3.2. 2. Outline Business Case (OBC)

3.2.1. The key purpose of the Outline Business Case:

3.2.1.1. Revisit the SOC assumptions and main findings

3.2.1.2. Establish the preferred option

3.2.1.3. Put in place the arrangements for the procurement of the scheme

3.2.2. Revisits the case for change

3.2.3. Identifies the option which best optimises balance of public value (cost, benefits and risk) to the UK (NPV)

3.2.4. Confirms procurement strategy, potential deal and affordability

3.2.5. Identifies resources and management arrangements to ensure successful delivery

3.3. 3. Full Business Case (FBC)

3.3.1. The key purpose of the Full Business Case:

3.3.1.1. Revisit OBC assumptions and main finding

3.3.1.2. Evidence that the most economically advantageous tender (MEAT) for the scheme has been accepted

3.3.1.3. Establish that the management arrangements for successful delivery are in place

3.3.2. building on the OBC, taking the chosen option through procurement, putting in place delivery plans and providing the final detailed costing of the scheme

3.3.3. Confirms public value and that the most economically advantageous offer is being procured

3.3.4. Sets out the commercial and contractual arrangements for the deal

3.3.5. Confirms affordability and the plans for successful delivery

3.3.6. Revisit Economic Case

4. The Five Case Model (1)

4.1. the Strategic Case

4.1.1. Question

4.1.1.1. Is there a compelling case for change?

4.1.2. Goal

4.1.2.1. strategic fit and clear investment objectives

4.1.2.2. there is a compelling case for change

4.1.3. This strategic case requires the spending authority to demonstrate how the spending proposal fits in relation to national, regional and local policies, strategies and plans and furthers the required outcomes.

4.1.4. It also requires the spending authority to demonstrate that the spending proposal has clear and concise spending objectives, which are specific, measurable, achievable, relevant and time constrained (SMART).

4.1.5. Content of the Strategic Case

4.1.5.1. Strategic Context

4.1.5.1.1. Organisational Overview

4.1.5.2. The Case for Change

4.1.5.2.1. Spending Objectives

4.1.5.2.2. Existing Arrangements

4.1.5.2.3. Business Needs - current and future

4.1.5.2.4. Potential Scope

4.1.5.2.5. Benefits and Risks

4.1.5.2.6. Constraints and Dependencies

4.2. the Economic Case

4.2.1. Question

4.2.1.1. Does the recommended option optimise public value?

4.2.2. Goal

4.2.2.1. optimising value for money

4.2.2.2. the way forward optimises value for money

4.2.3. It explains how this is achieved by, identifying and appraising a wide range of realistic and achievable options, known as the “long list”, in terms of how well they meet the spending objectives and critical success factors agreed for the scheme; and subjecting a reduced number of options, known as “the shortlist”, to cost benefit analysis (CBA).

4.2.4. The key to a well scoped and planned scheme is the identification of the right range of options, or choices, in the first instance; because if the wrong options are appraised the scheme will be sub-optimal from the outset.

4.2.5. The “preferred option” is then subjected to sensitivity analysis in order to test its robustness.

4.2.6. The output of the economic case should never be a one number answer; rather it consists of an appraisal summary table which includes the preferred option NPV, risk analysis and sensitivity figures with switching values, a distributional analysis (where relevant), information on qualitative costs and benefits which may be decisive and information of other viable alternative options.

4.2.7. Content of Economic Case

4.2.7.1. Critical Success Factors (CSFs)

4.2.7.2. Main Options - Long listed Options (10+)

4.2.7.3. Short Listed Options (including do minimum, 3 or 4 is the recommended number)

4.2.7.4. Status quo; do nothing option (unless this is not credible)

4.2.7.5. Economic Appraisals of Costs and Benefits with CBA

4.2.7.6. Distributional Analysis (where relevant)

4.2.7.7. Optimism Bias adjustment

4.2.7.8. Risk Assessment

4.2.7.9. Sensitivity Analysis

4.2.7.10. The Preferred Option

4.3. the Commercial Case

4.3.1. Question

4.3.1.1. Is the potential Deal achievable and attractive to the market place?

4.3.2. Goal

4.3.2.1. attractiveness to the market and procurement arrangements

4.3.2.2. the potential deal with the market is commercially viable

4.3.3. It requires the spending authority to set how the “preferred option” for spend will be procured competitively, in accordance with European Union (EU) and Word Trade Organisation (WTO) rules and the current regulations for the public sector procurements

4.3.4. Requires the spending authority to clearly specify the service requirements for the spending proposal in output terms, together with the anticipated charging regime and the allocation of risk in the each of the design, build, funding and operational (DBFO) phases of the proposed scheme.

4.3.5. Content of Commercial Case

4.3.5.1. Procurement Strategy

4.3.5.2. Service Requirements

4.3.5.3. Charging Mechanism

4.3.5.4. Risk Transfer

4.3.5.4.1. The governing principle is that risk should be allocated to the party best able to manage it, subject to the relative cost.

4.3.5.5. Key Contractual Arrangements

4.3.5.6. Personnel (TUPE) Implications

4.3.5.6.1. TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006)

4.3.5.7. Accountancy Treatment

4.4. the Financial Case

4.4.1. Question

4.4.1.1. Is the spending proposal affordable?

4.4.2. Goal

4.4.2.1. affordability

4.4.2.2. the proposal is affordable

4.4.3. The Financial Case demonstrates that the “preferred option” will result in a fundable and affordable Deal.

4.4.4. This section of the business case requires the spending authority to set out the capital and revenue requirement for the spending proposal over the expected life span of the service, together with an assessment of how the Deal will impact upon the balance sheet, income and expenditure account and pricing (if applicable) of the public sector organisation.

4.4.5. Content of Financial Case

4.4.5.1. Public Capital and Revenue Requirements

4.4.5.2. Net Effect on Prices (if applicable)

4.4.5.3. Impact on Balance Sheet

4.4.5.4. Impact on Income and Expenditure Account (if applicable)

4.4.5.5. Overall Funding and Affordability

4.4.5.6. Commissioner Support (if applicable)

4.5. the Management Case

4.5.1. Question

4.5.1.1. How will the proposal be delivered successfully?

4.5.2. Goal

4.5.2.1. deliverability and plans for delivery

4.5.2.2. the proposal can be delivered successfully

4.5.3. This section of the business case requires the spending authority to set out the capital and revenue requirement for the spending proposal over the expected life span of the service, together with an assessment of how the Deal will impact upon the balance sheet, income and expenditure account and pricing (if applicable) of the public sector organisation.

4.5.4. It also requires the spending authority to specify the arrangements for monitoring during implementation and for post implementation evaluation, as well as for Gateway reviews (if applicable), and the contingency plans for risk management of the scheme.

4.5.5. Content of Management Case

4.5.5.1. Programme and Project Management Methodology (PPM) and Structure

4.5.5.2. Programme and Project Management Plans

4.5.5.3. Use of Specialist Advisers

4.5.5.4. Change and Contract Management Arrangements

4.5.5.5. Benefits Realisation

4.5.5.6. Risk Management

4.5.5.7. Monitoring during implementation (proportionate)

4.5.5.8. Post Implementation Evaluation Arrangements

4.5.5.8.1. e.g.

4.5.5.9. Contingency Arrangements

4.5.5.9.1. Plan B in case it all goes wrong

5. What is a Better Business Cases™?

5.1. BBC is a structured, porocess based way that stakeholders can work and think together to provide a business case, with fit for purpose analysis, which gives confidence to decision makers that investing in a proposed programme or project is justified following the five case model.

5.1.1. A structured way of thinking

5.1.2. A step-by-step approach

5.1.3. A way of working together

5.1.4. A way to bring convergence, coherence and cohesion

5.1.5. A tool of international good practice (UK, Australia, New Zealand)

5.2. The primary objective of Better Business Cases (BBC) are to:

5.2.1. improve decision making through fit for purpose business cases.

5.3. The secondary objectives of Better Business Cases (BBC) are to:

5.3.1. reduce the costs of developing business cases

5.3.2. make the business case production and review process more efficient

5.3.3. conform with recognised good practice

5.4. The supporting principles are:

5.4.1. Quality analysis

5.4.2. Thinking not writing

5.4.3. Fit for purpose effort

5.4.4. No surprises

5.4.5. Governance and ownership

5.4.6. Alignment with other management processes

5.5. The Better Business Cases™ accreditation and certification scheme has been developed by the BBC Programme with APMG International.

5.5.1. The scheme and exam are based on the HM Treasury’s “Green Book Guidance on Public Sector Business Cases Using the Five Case Model”.

5.6. BBC Benefits

5.6.1. For Organizations

5.6.1.1. Reduction in unnecessary spending and consultancy costs

5.6.1.2. A process and guidance designed to optimize value from change initiatives

5.6.1.3. A clear, proportionate approval process and improved, more informed decision making

5.6.1.4. Complements existing best practice

5.6.1.5. Short courses minimize disruption to business as usual

5.6.2. For Individuals

5.6.2.1. Understanding of an established and proven methodology which can be applied at both strategic (macro) and tactical (micro) levels

5.6.2.2. Recognized certification for a core business competency for so many in mid and senior management roles

6. The Business Case Development Process Overview (1)

6.1. This development of the 5 case BC has been broken down into 6 stages (from 0 to 5, also called phases) having 10 steps resulting in 35 actions which are both numbered sequentially 1 – 35 (not for each step / stage).

6.1.1. It is iterative - as the business case is developed, it is necessary to review previous steps in order verify the continued applicability of work undertaken in the earlier stages.

6.1.2. The process is also flexible - the quantity and the depth of the work undertaken should be proportionate and tailored to the costs, benefits, risks and other requirements of each particular proposal.

6.2. Stages (6) –> Steps (10) –> Actions (35)

6.3. Stages

6.3.1. Stage 0 (has 1 step)

6.3.1.1. Determining a strategic Policy or Programme which provides the context through preparing the Strategic Outline Programme (SOP)

6.3.1.2. A single SOP may result in multiple sub programmes and / or projects.

6.3.1.3. Step 1 - Ascertain strategic fit (has 1 action)

6.3.1.3.1. Action 1 - Ascertain strategic fit

6.3.1.3.2. After Step 1 there should be now:

6.3.1.4. Stage output:

6.3.1.4.1. Strategic Outline Programme (SOP)

6.3.1.5. Stage outcome:

6.3.1.5.1. ‘Strategic fit‘

6.3.1.6. Stage review:

6.3.1.6.1. OGC Gateway Review™ 0 - strategic fit

6.3.2. Stage 1 (has 2 steps)

6.3.2.1. Scoping the scheme and preparing the Strategic Outline Case (SOC)

6.3.2.2. Step 2 - Make the ‘case for change’ (has 3 actions)

6.3.2.2.1. Action 2 - Agree strategic context

6.3.2.2.2. Action 3 - Determine spending objectives, existing arrangements and business needs

6.3.2.2.3. Action 4 - Determine potential business scope and key service requirements

6.3.2.2.4. Action 5 - Determine benefits, risks, constraints and dependencies

6.3.2.2.5. After Step 2 there should be now:

6.3.2.3. Step 3 - Exploring the ‘preferred way forward’ (has 3 actions)

6.3.2.3.1. Action 6 - Agree critical success factors (CSFs)

6.3.2.3.2. Action 7 - Determine long list options and SWOT analysis

6.3.2.3.3. Action 8 - Recommend a preferred way forward

6.3.2.3.4. After Step 3 there should be now:

6.3.2.4. Stage output:

6.3.2.4.1. Strategic Outline Case (SOC) / SOC review criteria

6.3.2.5. Stage outcome:

6.3.2.5.1. ‘Robust case for change‘

6.3.2.6. Stage review:

6.3.2.6.1. OGC Gateway Review™ 1 - business justification or Health Check 1

6.3.3. Stage 2 (has 4 steps)

6.3.3.1. Planning the scheme and preparing the Outline Business Case (OBC)

6.3.3.2. Step 4 - Determining Value for Money (has 5 actions)

6.3.3.2.1. Action 9 - Revisit SOC and determine short list, including the Reference Project (outline PSC)

6.3.3.2.2. Action 10 - Prepare the economic appraisals for short-listed options

6.3.3.2.3. Action 11 - Undertake benefits appraisal

6.3.3.2.4. Action 12 - Undertake risk assessment/appraisal

6.3.3.2.5. Action 13 - Select preferred option and undertake sensitivity analysis

6.3.3.2.6. After Step 4 there should be now a clear understanding of the preferred option, which is supported and evidenced by:

6.3.3.3. Step 5 - Preparing for the potential deal (has 5 actions)

6.3.3.3.1. Action 14 - Determine procurement strategy

6.3.3.3.2. Action 15 - Determine service streams and required outputs

6.3.3.3.3. Action 16 - Outline potential risk apportionment

6.3.3.3.4. Action 17 - Outline potential payment mechanisms

6.3.3.3.5. Action 18 - Ascertain contractual issues and accountancy treatment

6.3.3.3.6. After Step 5 there should be now:

6.3.3.4. Step 6 - Ascertaining affordability and funding requirement (has 1 action)

6.3.3.4.1. Action 19 - Prepare financial model and financial appraisals

6.3.3.4.2. After Step 6 there should be now clear understanding of:

6.3.3.5. Step 7 - Planning for successful delivery (has 5 actions)

6.3.3.5.1. Action 20 - Plan programme management and project management – strategy, framework and outline plans

6.3.3.5.2. Action 21 - Plan change management – strategy, framework and outline plans

6.3.3.5.3. Action 22 - Plan benefits realisation – strategy, framework and outline plans

6.3.3.5.4. Action 23 - Plan risk management – strategy, framework and outline plans

6.3.3.5.5. Action 24 - Plan post project evaluation – strategy, framework and outline plans

6.3.3.5.6. After Step 7 there should be now clear understanding of:

6.3.3.6. Stage output:

6.3.3.6.1. Outline Business Case (OBC) / OBC review criteria

6.3.3.7. Stage outcome:

6.3.3.7.1. ‘Planned procurement for VFM solution‘

6.3.3.8. Stage review:

6.3.3.8.1. OGC Gateway Review™ 2 - delivery strategy or Health Check 2

6.3.4. Stage 3 (has 3 steps)

6.3.4.1. Procuring the solution and preparing the Full Business Case (FBC)

6.3.4.2. Step 8 - Procuring the VfM solution (has 3 actions)

6.3.4.2.1. Action 25 - Revisit the case for change

6.3.4.2.2. Action 26 - Revisit the OBC options, including the PSC

6.3.4.2.3. Action 27 - Detail procurement process and evaluation of best and final offers (BAFOs) (in £s)

6.3.4.2.4. After Step 8 there should be now clear understanding of:

6.3.4.3. Step 9 - Contracting for the deal (has 2 actions)

6.3.4.3.1. Action 28 - Set out the negotiated deal and contractual arrangements

6.3.4.3.2. Action 29 - Set out the financial implications of the deal

6.3.4.3.3. After Step 9 there should be now clear understanding of:

6.3.4.4. Step 10 - Ensuring successful delivery (has 6 actions)

6.3.4.4.1. Action 30 - Finalise project management arrangements and plans

6.3.4.4.2. Action 31 - Finalise change management arrangements and plans

6.3.4.4.3. Action 32 - Finalise benefits realisation arrangements and plans

6.3.4.4.4. Action 33 - Finalise risk management arrangements and plans

6.3.4.4.5. Action 34 - Finalise contract management arrangements and plans

6.3.4.4.6. Action 35 - Finalise post project evaluation arrangements and plans

6.3.4.4.7. After Step 10 there should be now clear understanding of:

6.3.4.5. Stage output:

6.3.4.5.1. Full (or Final) Business Case (FBC) / FBC review criteria

6.3.4.6. Stage outcome:

6.3.4.6.1. ‘Recommended service provider and solution‘

6.3.4.7. Stage review:

6.3.4.7.1. OGC Gateway Review™ 3 - investment decision or Health Check 3

6.3.5. Stage 4 (has no steps)

6.3.5.1. Implementation

6.3.5.2. [stage has no steps and no actions]

6.3.5.3. Stage review:

6.3.5.3.1. OGC Gateway Review™ 4 - investment decision or Health Check 4

6.3.6. Stage 5 (has no steps)

6.3.6.1. Evaluation

6.3.6.2. [stage has no steps and no actions]

6.3.6.3. Stage review:

6.3.6.3.1. OGC Gateway Review™ 5 - benefits realisation or Health Check 5

6.4. These stages correspond directly to the OGC Gateway Review stages (0 to 5), of which review stages 0 to 3 are the primary focus of the business case development process.

7. Combining Business Case Process (Stages) and OGC Gateway™ Reviews

7.1. OGC Gateway™ Reviews

7.1.1. Independent and impartial reviews at critical phases reporting to SRO

7.1.2. Risk Potential Assessment (RPA) – high, medium and low

7.1.3. External and internal reviewers

7.1.4. Traffic light system (a.k.a. RAG traffic system)

7.2. Combining OGC Gateway™ and Business Case Process

7.3. Gateway™ Reviews - Traffic light system

7.3.1. Green

7.3.1.1. Successful delivery of the project to time, cost and quality appears highly likely and there are no major outstanding issues that at this stage appear to threaten delivery significantly.

7.3.2. Amber/Green

7.3.2.1. Successful delivery appears probable; however, constant attention will be needed to ensure risks do not materialise into major issues threatening delivery.

7.3.3. Amber

7.3.3.1. Successful delivery appears feasible but significant issues already exist, requiring management attention. These appear resolvable at this stage and if addressed promptly, should not present a cost/schedule overrun.

7.3.4. Amber/Red

7.3.4.1. Successful delivery of the project is in doubt, with major risks or issues apparent in a number of key areas. Urgent action is needed to ensure these are addressed, and whether resolution is feasible.

7.3.5. Red

7.3.5.1. Successful delivery of the project appears to be unachievable. There are major issues on project definition, schedule, budget, quality and/or benefits delivery, which at this stage do not appear to be manageable or resolvable. The project may need re-scoping and/or its overall viability reassessed.

8. This freeware, non-commercial mind map was carefully hand crafted with passion and love for learning and constant improvement as well for promotion the Better Business Cases™ and the 5 Case Model and as a learning tool for candidates wanting to gain Better Business Cases™ qualification. (please share, like and give feedback - your feedback and comments are my main motivation for further elaboration. THX!)

8.1. Questions / issues / errors? What do you think about my work? Your comments are highly appreciated. Please don't hesitate to contact me for :-) Mirosław Dąbrowski, Poland/Warsaw.

8.1.1. http://www.linkedin.com/in/miroslawdabrowski

8.1.2. https://www.google.com/+MiroslawDabrowski

8.1.3. https://play.spotify.com/user/miroslawdabrowski/

8.1.4. http://www.miroslawdabrowski.com

8.1.5. https://twitter.com/mirodabrowski

8.1.6. miroslaw_dabrowski

9. The Five Case Model Official publications

9.1. The Five Case Model - Guidance

9.1.1. http://wales.gov.uk/funding/wiipindex/5cmodel/?lang=en

10. The Better Business Cases™ consists of: 1 Model., 5 Case types, 1 Process, 6 Stages, 10 Steps, 35 Actions, 5 Documents

11. Documents (5)

11.1. 1. Strategic Outline Programme (SOP)

11.2. 2. Strategic Outline Case (SOC)

11.3. 3. Outline Business Case (OBC)

11.4. 4. Full Business Case (FBC)

11.5. 5. Business Justification