The document provides guidance on writing successful business cases that can obtain approval and funding. It emphasizes that business cases should be measurable and backed by evidence. Key points include: - Business cases should justify a project's value, risks, priorities and benefits in a concise yet informative manner (typically 2-3 pages). - They must demonstrate how the project aligns with organizational strategy and quantify expected financial and non-financial impacts such as increased revenue, cost savings, risk reductions and compliance gains. - Assumptions should be supported by facts and benefits must be measurable both during and after project implementation through key performance indicators. - High-quality business cases will consider alternative options, include input from finance and procurement

1. Writing a successful, measurable business case
Stuart Robb
October 2013
Success with Business Cases
Managers manage tasks, leaders create outcomes
-- Stuart Robb 2012

2. Contents
• Why do we have to do Business Cases?
• How should a Business Case be written?
• What are the types of things that are looked at when Business
Cases are reviewed?
• What do Finance/Procurement typically look for when reviewing
Business Cases?
• What is a Benefit?
• Redflags / Greenflags in a business case

3. The purpose of a Business Case is to capture the reasoning for initiating a project
or task.
“As an organisation, we have limited choices in terms of labour and money, and
we have to prioritise in accordance with the right decision based on investment
and strategic direction”.
The principle purposes of the business case process are to;
• Introduce a way of thinking that causes people with the authority to recommend projects to firstly consider their
value, risk and relative priority as a fundamental element of submitting the project approval
• Require those proposing a project to justify its value to the company and to self-cull any proposals that are not
of demonstrable value
• Enable management to determine if the project proposed is of value to the business and achievable compared
to the relative merits of alternative proposals
• Enable management to objectively measure the subsequent achievement of the business case’s benefits.
The business case process is an organisational process (and not a Finance
process).
Why do we have business cases

4. Why is a business case important
• It answers the question for the client “Why am I doing this”
• It tells the client “how much money am I going to make once it’s done”
• It ensures the client “keeps the faith”
• House renovation example
• Why would you invest in a renovation project property
• How much would you spend on the renovations
• How much do you expect to make
• Film investment example
– Invest in this film, it‟s going to be great, really exciting, lots of stars...
• How do I know it is going to make money
• What are the major cost variables
• How do I know what I need to measure & monitor in order to know whether I’m going to make any
money
– Investing in something should be “informed”. It should NEVER be a leap of faith.

5. What should go in a business case?
• Financial
• Non-financial
• Not doing the initiative
A business case needs to be:-
• Measurable & MEASURED
• Realistic, not fantasy
• Assumptions MUST be evidentially supported
A BUSINESS CASE SUMMARY SHOULD BE THE
DRAGON‟S DEN QUESTIONS ANSWERED!
(ie. a 5 minute pitch, and/or maximum 2-3 page written summary)
Why am I doing this & how
much am I going to make?

6. What should go in a business case?
• Summary of the proposal, key benefits, timescales, costs, risks, approval to proceed
(and spend) to next stage - 2 – 3 pages
Detailed Business Case
• Current situation, rationale for change, description of opportunities
• What is proposed, including outcomes/objectives
• How does the initiative fit with any overall business strategy
• Over what timeframe, key milestones, level of planning detail
• Financial analysis, commitments at each stage
gate, cashflow, funding, variance, procurement, discounted cashflow (NPV)
• Sensitivity analysis, key risks & issues
• KPIs, tangible/intangible business benefits
• Effect of not proceeding
• Other options considered, including costings, reasons for rejection
• Impacts of business-as-usual operations, headcounts, other projects/dependencies
• Next steps & Appendices

7. How should a business case be written?
The business case process should ensure;
• The required issues have been thoroughly considered and documented
• Sufficient information to facilitate fair evaluations of different proposals is available
• Both the value and risks inherent in the proposed project are clear
• The project is sponsored by, and has the commitment of an employee with the capability
and authority to deliver the benefits
• The delivery of the outcomes and benefits can be traced and measured
The business case should be written based on the following guidelines;
• The Business sponsor / owner should write the case (not the Project Manager)
• There should be one consistent template
• The explanation should be reasonably high level (circa 3 pages) with any technical detail
referenced in Annexes
• It should provide the necessary background information to inform decision making by
senior management

8. What is a benefit?
Tangible Intangible
FinancialNon-financial
Reduction in costs
Accommodation savings
Better cash management
Increased revenue
Increased contribution
Better quality of service
Improvement to KPI targets
inc. CSI
Lower staff turnover
Fewer customer complaints
Improved productivity eg AHT
Lower customer churn
Increased people morale (Reflect)
Corporate „image‟
Better access to information
Improved processes
Increased competitiveness
Access to markets
Regulatory requirement
Based on Deloitte „Types of benefits‟

9. Business Case Levers
• Revenue Enhancement
– When the programme has completed we are expecting this amount of revenue
growth.
• Cost Reduction
– We currently spend this amount on doing this stuff, after the programme we will
spend that
• Risk Reduction
– If we don’t do this, we can expect this amount of fraud
• Compliance
– We will be “fined” this amount if we don’t do this
QUESTION: Would I spend MY OWN MONEY on this?

10. Business Case Levers
• Revenue Enhancement is the hardest value to predict in a business
case, because a business is never stable
– Has revenue grown because of my programme or because of new products we
introduced or the fact that the market conditions have changed, one of our
competitors went bust, we came out of recession etc.
• Cost Reduction is the easiest to measure because most organisation’s
cost management and FTE management will easily determine changes to
the cost profile
• BUSINESS CASE GOLDEN RULES
– All assumptions MUST be closely scrutinised, because many are rubbish
– If you can’t measure it in isolation, you can’t tell what’s impacting it
– Many business cases aren’t worth the paper they’re written on
– At its most basic form, the client simply wants to know what he’s going to make out
of it, and whether he would be better off sticking the money in the bank.
– If you don’t measure the benefits post go-live, you don’t know whether what you’ve
delivered has added any value.

11. Business Case Levers
• Is the business case “religious or agnostic”?
• Is this the sponsor’s “pet project”
• How likely is it the business case will be rejected and the programme not proceed
• Would the sponsor be willing to sacrifice his own salary/bonus on the
definite, measurable results from the business case
• Where a business case has options, has the team chosen their preferred
option, as opposed to the one most likely to produce the highest benefits?
• CRM are classics – is the “big package” the best solution?
• In order to make back £50m, you have to have very significant uplifts in revenue and
profit.
• Business cases are “orders of magnitude”
• Variance in accuracy depends on the amount invested in driving out the detail
• A business case is a living document – at each stage, as more is known, more detail
should be incorporated into the case in order to determine whether the programme is still
worth proceeding with
• 100% of the costs of a programme will be known when it is finished & spent!

12. What makes a successful business case
• The investment has value and importance
• The project will be managed properly
• The company has the capability to deliver the benefits
• The company‟s dedicated resources are working on the highest value
opportunities
• Project‟s with inter-dependencies are undertaken in the optimum sequence
• Procurement input – named individual?
• Finance input – named individual?
• What is the impact of not doing the initiative?
• What are the first year support (FYS) costs? (and associated capitalisation rules)
• Have quotations for third party work been included?
• Alternative suppliers/solutions considered?
• What can we de-commission?
• Strategic reason/fit (cost saving/legal requirement/capacity/revenue enhancing)
Business Cases are formal documents which put the case for the investment of
money and other resources in a project or programme of work.

13. What do procurement look for
Procurement;
• The quantity of external spend that is being considered – Opex / Capex (£m)
• A description of what products or services are being purchased externally
• Which suppliers are being / have been considered – are they an existing or
preferred or a new supplier. If a new supplier, what process has been gone through
to select them?.
• Are the products /services therefore calling off from an existing contract or price list
or is a new contract being put in place?.
• Which procurement individual has been engaged & was it as early as possible?
• Have any wider synergies (for example, co-sourcing, shared services etc.)?
Finance and Procurement are engaged at project inception.

14. What do Finance typically look for?
Finance;
• The proposed expenditure represents “value for money” / strategic fit
• The financial evaluation is appropriate, correct and all options have been
considered
• The costs are confinable within Budget (or authorised deviation)
• Appropriate accounting and control procedures are in place
• Operational line authority and other authority / concurrence has been given
• Procurement policy has been followed
• Have the benefits been baked into Opex plans? signed up to?
• Has discounted cashflow (NPV), wage inflation, leasing, depreciation, amortization
etc. been factored into the numbers?

15. Red flags in a business case?
This initiative will:-
• Improve business efficiency
• Improve job satisfaction
• Create increased customer loyalty
• Improve staff effectiveness
• Reduce risk of fraud
• Generate increased sales
• Is an enabling initiative
• Will improve the customer experience
• Will increase product holdings per
customer to an average of 2.1
• Will reduce Average Call Handling Time to
1.3 minutes/customer
Why is this an issue:-
Where will these efficiencies be derived? How much cost will be saved?
Will there be FTE reductions as a result?
How does this translate to company performance? Will it improve staff
retention, therefore lower recruitment costs?
What is the customer lifetime value? How much does customer loyalty
cost and how much does it contribute to revenue and margin?
How does staff effectiveness translate into reduced FTEs, increased
capacity and therefore costs/benefits?
How does this quantify? What is our risk exposure in £ value? How
much fraud have we seen to-date?
How many sales? How does this impact cost of sale, stockholding and
cashflow. How much additional revenue & margin
This is a catch-all get-out-of-jail free benefit, because we can’t really
think of any benefits.
How much is that improved customer experience worth. Does it match
the cost of the improvement.
How much does that contribute to overall revenue and margin. This, inof
itself is not a useful measure
Same point as above. Does that allow us to avoid costs or reduce costs
in our call centres by reducing FTE’s?

16. Green flags in a business case?
This initiative will:-
• Improve business efficiency by improving average call handling time from 2:30 minutes to 1:30
minutes per call. We handle 25,000 calls per annum, thus increasing our call handling
capabilities by 50%. We propose, therefore to reduce FTE’s in 2012 by 12 heads, saving
£1.3m per annum. Please see Appendix A: Cost Savings for detailed breakdown.
• Improve job satisfaction, thus improving our staff retention rate from 5% staff churn per annum
to 2%. This in turn will reduce our recruitment costs by £85,000 per annum and reduce our
staff training downtime by 980 man-weeks per annum. This will result in an FTE reduction of 3
heads, saving £240K per annum.
• Create increased customer loyalty. At present, the fully loaded cost of acquiring a new
customer is £9,380, based on £4,230 above the line marketing costs, £5,100 below the line
marketing costs and a £1,380 cost of sale. Therefore by reducing churn by 8%, we would add
£11.6m per annum to margin. Please see Appendix F: Churn reduction forecast model for
details.
• etc. etc.
Business benefits have numbers that can be measured!

17. END