Business Case Template

BUSINESS CASE TEMPLATE

1. Background  Identification of the problem, opportunity or need – what is the current situation? 2. Strategic and Operational Considerations  Strategic factors that may influence this initiative What are the high-level goals and objectives? How does this potential project “fit” within the department, ministry or government strategic plans? Project / Procurement manager’s knowledge of the industry and market conditions – How could this affect this particular project initiative?  Researching other organizations / jurisdictions for similar project initiatives Consider the following: Access project information, plans, processes, project structure etc. Critical success Factors identified on a similar project. Project costing information. Benefits achieved (access similar cost / benefit analyses). The other organizations’ after action report – what problems were addressed and how would they have done it differently / lessons learned? Are there any impacts on other government-funded agencies (e.g. other government agencies identified as a current or future recipient, directly or indirectly, of this project)?  Factors potentially affecting capital and operating costs What are the most significant factors that may affect project capital (non-recurring) and operating (recurring) costs? Are there start-up costs? If so, what could be the impact on budget planning?

 Identify the Critical Success Factors of this project Consider those “macro” factors that could relate to the overall project scope, time considerations, cost and quality (do not consider options at this point). These factors should provide a broad overview of key considerations that could affect the success of the project. Once these factors have been identified, it should allow planners to begin the process of identifying specific project evaluation criteria (see Section 3 below). 3. Evaluation Criteria  Establish the evaluation criteria for the options analysis What is the basis or rationale for these criteria? Use objective criteria as much as possible; however realize that when dealing with human related projects, subjective criteria will need to be established. You need to establish these criteria BEFORE you begin your analysis of the potential options or solutions. If short-listed options, what is the new process to evaluate and rank these tentative short-listed options? Note: Political, economical or social factors must be considered in order to ensure the viability of the suggested or preferred options. 4. Development of Options  The Base-Case Scenario (A reference to which you can make a meaningful comparison) What would the “status quo” or “do nothing” option result in? The base-case should be a feasible option indicating how the problem could be resolved over a specific time period if the recommended option is NOT implemented.  Generate Options and / or Alternative Solutions Have all viable options and / or alternative solutions, including the Base-Case, been considered? What are they?

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4. Development of Options (cont’d) What are the main opportunities with each viable option? What are the key Critical Success Factors for each viable option? Have all limitations and constraints been identified and rationalized?

 Stakeholder Influence and Effect Have all internal and external stakeholders been identified? Analyze the influences and impacts for each and all stakeholders. Evaluate the stakeholder impact of each option. Where possible, which options take advantage of partnerships and shared service opportunities and subsequent costs?  What Are the Advantages and Disadvantages of Each Option Have all political, economic and social factors been considered? Section 5 will focus on the high level risks associated with each option. 5. Strategic Risk Assessment  Risk Analysis of the Potential Business Opportunity It is essential to establish the following risk framework for this initial high level analysis: o Establish the Context – What is the scope of the potential requirement, service or product? Consider geographical / social / political / economic environments. What are the major opportunities in doing this project? . Think in terms of high-level service delivery strategies, market and / or industry conditions, security and safety, serving the public interest, etc. For example, could your project objective in itself cause you to consider a specific risk issue? o Have all major project / program risks been identified? o Have all major risks with each option been identified? o What is the relationship between the identified project Critical Success Factors and potential risks for both the project as a whole and for each viable option? o Have all risks with each potentially impacted stakeholder been identified? o Do the potential risks outweigh the potential opportunities or vice versa? NOTE: Once this higher-level risk assessment has been completed for each option or alternative, an eventual full risk assessment on the preferred option will need to be completed as part of the eventual solicitation planning. The Manager, Insurance and Bonds can assist in providing specific Risk Management / Treatment tools for your particular project to conduct a comprehensive risk assessment. 6. Cost / Benefit Analysis  Quantitative (Tangible) Analysis – Financial Benefits and Costs Full cost analysis – All possible costs and benefits resulting from this business opportunity need to be analyzed for each viable alternative or option, including the CBA of maintaining the status quo. Incremental and variable cost analysis may be required. Timeframe / timelines – Identify an approximate timeframe or timeline over which both the costs and benefits can be analyzed. Consider the project or program expected lifecycle from start-up to achieving the expected benefits. Costs – Identify all associated costs incurred by stakeholders over the project or program anticipated timeframe including: o Direct costs – cost associated with the project itself. o Indirect costs – costs that would normally occur whether the project was there or not (standard overhead costs associated with the organization). o Initial costs – set-up / start-up costs. o Capital costs – non-recurring. o Operating costs – recurring. Benefits – Identify all quantifiable (tangible) benefits related to all stakeholders over the project or program timeframe, including when these benefits will be achieved and received, the beneficiary of these benefits and the certainty of these benefits (probable – most likely, possible – somewhat likely, and potential – maybe). Page 2 of 3 October 10, 2007 BUSINESS CASE TEMPLATE (cont’d)

6. Cost / Benefit Analysis (cont’d)  Qualitative (Intangible) Analysis – Non-Financial Benefits and Costs Non-Quantifiable Analysis – Some of the costs or benefits may not be quantifiable and therefore difficult to attach a dollar value to. A non-quantifiable benefit could be increased customer satisfaction or staff work ethic and performance. A non-quantifiable cost could be reduced client satisfaction and / or government ministry image. Analysis of these non-quantifiable benefits and costs can be subjective and need rationalization. Quantifiable Benefits – It is important to try to put these non-quantifiable costs into quantifiable benefits. For example increased customer satisfaction will probably lead to higher revenue (or improved departmental processes), which will translate into increased staff moral and productivity etc. Documentation – It is essential to document all quantitative and qualitative assumptions that were used to determine any costs and benefits for all alternatives or options. 7. Recommendations and Proposed Implementation Strategy

 What are the key conclusions and recommendations to senior decision-making authorities and funding agencies resulting from the business case analysis, planning and evaluation?  What option(s) mitigation strategies and implementation strategies are most likely to successfully address the problem, issue or business opportunity?  Overview of the proposal rationale – why is this the preferred solution?  What is likely to happen over time if the preferred option or solution is NOT adopted or implemented?  What are the specific features of the “roll-out” of the recommended solution, considering time of approval, solicitation method (e.g. alternative service delivery and type of solicitation) and the estimated time of planning, negotiating and executing the project / procurement strategy and plan (broad scope)?

8. Project Description  Key elements of Project Description / Proposed Solution What is the Scope of Work Statement? – A broad overview that provides the following: o Project description, goals and objectives. o Suggested project sponsor. o Key stakeholders (both internal and external). o Brief description of the service or work to be performed. o A list of the measurable project deliverables that are anticipated. o Critical time factors / considerations. o Financial information (project costs and revenues, and sources and uses of funding). The project description should also include what is “out of scope”, i.e. specific issues, items, services etc. that should be excluded. A summation of the major risk exposures including both project and procurement and contract management exposures. Note: A complete and comprehensive Risk Assessment must be completed during the procurement and contract management planning phase (prior to solicitation). Page 3 of 3 October 10, 2007