The document discusses business case preparation in the public sector and outlines a five case model to create high quality business cases. It notes that the public sector spends £1.35 billion annually on business cases that have a high failure rate. The five case model includes the strategic case, economic case, commercial case, financial case, and management case. It provides details on applying these cases across four stages of business case development to improve success and ensure value for money.

1. Making the learning of ‘Better
Business Cases’ simple
Dr Fatollah Youssefifar
May 2018

2. Why Better Business Cases?
• Business case preparation in the public sector
– United Kingdom has over 900 public sector organizations
– Typically planning and procuring around 10 key investments each
year
– 27,000 business cases created
– Average cost of £50k to produce (incl. internal and external
resources)
– Conservative cost of £1.35 billion spent on business cases each
year within the public sector
• Essential to make the right choices and demonstrate
value for money
• Vital to scrutinize proposals

3. The Case for Better Business Case
• Gartner studies suggest 75% of projects are
considered to be failures by those responsible
for initiating them:
– Solution fundamentally did not do what was agreed
– Missed deadlines
– Over budget (half came in 200% over budget)
• Standish Group found that 31% of projects were
cancelled outright, at the end of business case
development, and the performance of 53% was so
worrying they were challenged

4. Putting the Right Foot Forward
• Project failure starts from its point of conception
• Project failure directly relates to the quality of its
business case
– Benefits are often never achievable in the first place
– Benefits exaggerated to obtain funding
– Insufficient understanding of business changes
• Must chose the right project
• Include both hard and soft benefits

5. Application of the Five Case Model,
to Create High Quality Business Cases
The 5 components of the Better Business Cases, to
be developed in 4 stages:
• Compelling case for change – Strategic Case
• Best value for money – Economic Case
• Deal is attractive to market place –
Commercial Case
• Proposed spend is affordable – Financial Case
• Proposal is achievable – Management Case

6. Strategic
Case = 3
Economic
Case = 3
Commercial
Case = 2
Financial
Case = 2
Management
Case = 2
The 12 elements of the 5 Case Model for
Business Case Development (Iterative Development)
Pillars of Iterative Development – Failing Fast Principle
= Transparency
= Inspection
= Adaption

7. Stage 0
Strat. Fit
Gate 0
Stage 1
SOC
Gate 1 Gate 2
Stage 2
OBC
Stage 3
FBC
Strategic Case
- Part 1: Step 1
Strategic Case
– Part 2: Step 2
Economic Case
– Part 1: Step 3
Economic Case
– Part 2: Step 4
Commercial Case
– Part 1: Step 5
Financial Case – Part 1
Step 6
Management Case
– Part 1: Step 7
Strategic Case – Part 3 &
Economic Case – Part 3
: Step 8
Commercial Case – Part2
& Financial Case - Part2 :
Step 9
Management Case
– Part 2: Step 10
3 Key stages of Project Business Case development
How do the 12 components, of the 5 Case Model, fit into
the 4 stages of Business Case development?
Gate 3
Strategic Fit Case for Change
CSFs
Many Options,
Select 12,
Pick 4
Select 1 from the 4
How to Procure & Pay
Establish Affordability
& Funding
How to Manage the
Project & Governance
Select BAFO
Double Check Procurement &
Affordability
Double Check Project
Management Arrangements
So, what
happens at
each of the
steps?

8. The 10 Steps in the 4 Stages of Business Case
Development, using the 5 Case Model
Stage 0:
Strat.
Assessment
(leading to
Gate 0 –
Strategic Fit)
Strategic
Case 1
Step 1:
Ascertain
Strategic Fit
(SC 1)
Stage 1: SOC
(leading to
Gate 1 –
Business
Justification)
Strategic
Case 2
Step 2:
Making the
Case for
Change (SC2)
Economic
Case 1
Step 3:
Exploring
Preferred
Way Forward
(EC1)
Stage 2: OBC
(leading to
Gate 2 –
Delivery
Strategy)
Economic Case 2
Step 4:
Determine the
Potential VfM
(EC2)
Commercial Case
1
Step 5: Preparing
the Potential Deal
(CC1)
Financial Case 1
Step 6: Ascertain
Affordability
(FC1)
Management
Case 1
Step 7: Planning
for Successful
Delivery (MC1)
Stage 3: FBC
Procuring the
VfM Solution
Leading to
Gate 3 –
Investment
Decision)
Strategic 3 &
Economic Case 3
Step 8: Procuring
the VfM Solution
(EC3 + SC3)
Commercial 2 &
Financial Case 2
Step 9:
Contracting the
Deal (CC2 + FC2)
Management
Case 2
Step 10: Ensuring
Successful
Delivery (MC2)

9. Development of the Five Case model in the 4
Stages of the Business Case development
(Chart is not to scale)
SOP
SOC
OBC
FBC
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SOP
SOC
OBC
FBC

10. Better Business cases – Process Flow
(Better Business Cases on one Page)

11. Gateway Reviews
Gate 0 = Strategic Fit
- Clear understanding of the strategic context
- How the proposal fits with other projects &
programmes, in the organisation

12. Gateway Reviews
Gate 1 = Business Justification
- Justification of spending objectives
- Exiting arrangements and related business needs
- Scope and service requirements
- High-level benefits, risks, constraints and dependencies
- Critical Success Factors (Strategic, Economic, Commercial,
Financial, Management)
- Options appraisals, to arrive at 12 options
- SWOT analysis, leading to 4 short-listed options
- Preferred way forward established

13. Gateway Reviews
Gate 2 = Delivery Strategy
- Detail of Economic Appraisal for the 4 options
- Benefits Analysis for the 4 options
- Sensitivity Analysis for the 4 options
- Preferred Option selected
- Benefits to be realised
- Procurement Strategy
- Contract to be used
- Capital & Revenue implications of the deal
- Impact on Income and Expenditure Account and Balance Sheet
- Sources of funding
- Project/programme management and governance
- Benefits realisation plan
- Decision on procurement route (OJEU or not)

14. Gateway Reviews
Gate 3 = Investment Decision
- Procurement process and evaluation of Best and Final Offers (BAFOs)
- How the selection of the service provider was made
- Clear understanding of the financial implications of the proposed deal
- How the project will be managed
- How benefits will be realised
- How contract changes will be managed
- How project/programme will be reviewed periodically
- The contingency plans, in the event of service failure
- Business Case to be put forward for approval

15. Thank You
Any questions ?
• fatollah@trainingbytesize.com
• martyn@trainingbytesize.com
• Office 01270 626330
• www.trainingbytesize.com