With the growing agenda around the devolution of powers and resources to the English regions – and further powers and resources to Scotland – there is a growing focus on the significance of business cases for both capital and revenue projects. Our new Senior Consultant, Clare Hammond, has just joined us from the New Zealand Treasury and looks at how to cut through to the heart of what decision makers are looking for in a Business Case
In both New Zealand and the UK, Government capital funding proposals are required to be accompanied by a business case. Both countries use the five case Better Business Cases model (detailed in the UK Green book). This model is outlined in figure 1. Business cases play an important role in improving the level of analysis underpinning spending decisions. They are also incredibly useful frameworks for making a case for non-capital related projects.
A business case is your key vehicle for convincing Ministers (and HMT and even spending Departments such as DWP) that your idea is worth investing in. At its core, a business case needs to make a succinct, yet comprehensive, and convincing case for change.
But amongst that several hundred page business case, Ministers and Treasury officials care most about getting answers to three questions. The most influential business cases I have seen go through Cabinet are able to clearly walk the reader through the answers to these questions.
Question One: Why do I need to do anything about this?
The public sector will tend to sweat its assets, so decision makers will often be thinking about whether they can delay the decision. This is particularly true in times of austerity, or if your asset isn’t part of a sexy headline or election winning project.
Often the case for change, while widely understood within the organisation, won’t be presented explicitly to Ministers and their advisors. Having decision makers disagree with your imperative for change can be an opinion that is difficult to shake later in the process.
In the business cases I’ve worked on, the tag line ‘the current asset isn’t fit for purpose’ is a particular favourite. To be convincing on this point, the evidence needs to outline clearly which needs are being met by the current asset, which aren’t, why, and does it really matter? If service delivery failure is a risk, being explicit about the risk tolerance assumed, and the likely outcome of service delivery failure can be useful in providing a tangible image for Ministers.
Question Two: Why is this my best option?
Most business cases are dedicated to showing how great the preferred option is. What can often be forgotten is that in arriving at the preferred option, many other options have dropped off the list. Ensuring that your business case adequately answers why the other options are not the best can be incredibly powerful in supporting your preferred option.
Question Three: How do I know this will be delivered well, on time, and to budget?
Crudely put, the key messages coming from Ministers on this are likely to be: “Don’t come back to me for more money”, and, “I don’t want to have to clean up a PR mess if this project fails to deliver”.
These issues tend to get lost in a sea of organisational diagrams, management charts, and procurement technicalities. Stepping back and thinking about how to answer Question Three can be a useful exercise in producing a convincing case.
The most successful business cases I have seen are able to take complicated and detailed analysis and use it to convincingly answer the three questions above. To achieve this, I suggest creating a devil’s advocate within your organisation to really push around and test your answers to these questions. The criteria for selecting a good devil? Well they should be able to think like a Treasury official or Government Minister……
If you have questions on this blog, or on developing and assessing Better Business Cases more generally, please contact Clare.