On-Q template version date 14/03/2006 I:\Major Projects\MPU\PMDP\OnQ Templates\Generic Templates Mar 2006\Business Case 140306.doc Project name Business Case Action statement Date Name Position Action required (Review/Endorse/Approve) Due date Prepared by Name Title Job title Branch/District Branch/District Division/Region Division/Region Location Floor, street, city Version no. 1.0 Version date 24 April 2006 Status Draft/Final review/Sign off (delete 2 of) DMS ref. no. DMS reference number File/Doc no. File number/document number Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 2 of 19 Business Case Guide The Business Case for most organisations presents the necessary information required for the organisation to make a decision whether to proceed with the project or to abandon it. There is not a single Business Case that can be replicated for any other project. By their very nature projects differ in the reasons for initiation, purpose, objectives, scope and with various organisational climates which apply influence over the running and/or outcomes of a project. The key to drafting a successful business case is in: 1. understanding the scope and exactly what is to be achieved by the project 2. identifying the current state and the planned future state 3. identifying the target audience and who will influence sign-off as well as including the appropriate content. Usually the larger and more complex the project the more detailed and the Business Case needs to be. For example, a single page document may suffice for the purchase of a new coffee machine in the office, whereas, the decision to proceed with a multi billion dollar construction would require substantially more detail. The content of the document will need to be targeted to the audience who will influence sign-off. The document for purchase of a coffee machine may only need to be written with a view to gain the Office Manager’s approval. The multi billion dollar construction will require content that satisfies amongst other legal, financial, local, state and federal government, environmental authorities, community, shareholder backing and approval. Identification of stakeholders, assessment of their interest and discussion of their expectations will provide a general guide to the content of the Business Case. The Business Case should provide justification on whether to proceed based on financial and/or strategic considerations. The fundamental of a Business Case should include the necessary facts, data and arguments outlining the benefits, costs, impacts, risks and sensitivity analysis. Approval of the Business Case provides the organisation with justification and in all senses the reasoning to proceed on a course of action. The Business Case does not usually contain a detailed plan of “how-to-implement” the project. Instead this is included in the Project Plan which together with a Project Budget follows the Business Case. The progress of the project will be monitored against the approved Business Case. Costs, impacts, risks and any change in expected benefits will be reviewed against the Business Case and decisions on variations made in accordance with the project control standards. A cost/benefit realization report is the final link in the project that compares actual results with those projections contained in the Business Case. To delete this guidance text box, double click mouse in the left margin then press delete. Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 3 of 19 Document control sheet Contact for enquiries and proposed changes If you have any questions regarding this document or if you have a suggestion for improvements, please contact: Project Manager Insert Project Manager's name here Phone Insert phone number here Version history Version no. Date Changed by Nature of amendment 13/04/2004 Initial draft. Business Case approval The following officers have approved this document. Customer Name Position Signature Date Sponsor Name Position Signature Date The following officer has endorsed this document. Name Position Signature Date Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 4 of 19 Contents Executive summary ..............................................................................................................6 1 Introduction ............................................................................................................7 1.1 Purpose of this document..........................................................................................7 1.2 References ................................................................................................................7 1.3 Definitions................................................................................................................7 2 Project Customer, Sponsor and Project Manager.................................................7 2.1 Project Customer ......................................................................................................7 2.2 Project Sponsor.........................................................................................................8 2.3 Project Manager........................................................................................................8 3 Stakeholders............................................................................................................8 4 Background.............................................................................................................8 5 Current situation ....................................................................................................9 6 Purpose/Objectives of the project ..........................................................................9 6.1 Purpose.....................................................................................................................9 6.2 Links with the department’s strategic objectives .......................................................9 7 Scope of project.......................................................................................................9 7.1 In scope ..................................................................................................................10 7.2 Out of scope ...........................................................................................................10 7.3 Related projects ......................................................................................................10 7.4 Constraints..............................................................................................................10 7.5 Urgency..................................................................................................................10 7.6 Assumptions ...........................................................................................................11 8 Impacts..................................................................................................................11 8.1 Internal ...................................................................................................................11 8.2 External ..................................................................................................................11 9 Method to date ......................................................................................................13 10 Options ..................................................................................................................13 11 Risk analysis..........................................................................................................13 12 Issues .....................................................................................................................14 13 Business processes/requirements..........................................................................14 Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 5 of 19 14 Delivery approach.................................................................................................14 14.1 Resourcing strategy ................................................................................................14 14.2 Standards ................................................................................................................14 14.3 Timing....................................................................................................................15 14.4 Communication strategy .........................................................................................15 14.5 Change management strategy..................................................................................15 14.6 Issues management strategy....................................................................................15 14.7 Risk management strategy ......................................................................................15 14.8 Schedule .................................................................................................................16 14.9 Procurement strategy ..............................................................................................16 15 Financial issues .....................................................................................................16 15.1 Financial analysis ...................................................................................................16 15.2 Funding ..................................................................................................................18 16 Project performance measurement......................................................................18 17 Product benefits realisation..................................................................................18 18 Recommendation ..................................................................................................19 Appendix A – Revenue and cost project (sample worksheet) Error! Bookmark not defined. Appendix B –Cost only project (sample worksheet) .............. Error! Bookmark not defined. Appendix C – External communication strategy ................... Error! Bookmark not defined. Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 6 of 19 Executive summary The executive summary is mandatory. Outline the recommendation and briefly summarise the current situation, options considered, recommended outcomes, costs (to build and run), benefits and cost/benefit analysis. This is most easily done by leaving the executive summary until last, then extracting key sections from the body of the document and copying them to here. To delete this guidance text box, double click mouse in the left margin then press delete. Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 7 of 19 1 Introduction Text in this document which has been copied forward from the previous document has been shown bold and italics “words copied from previous documents”. 1.1 Purpose of this document The purpose of this document is to obtain endorsement from Stakeholders and approval including financial approval from the Sponsor. 1.2 References This item lists any documents to which this document refers and could include reports on any previous investigations carried out. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 1.3 Definitions In the table below define any term which this document’s audience may not understand, including specific terms, abbreviations and acronyms. To delete this guidance text box, double click mouse in the left margin then press delete. Terms, abbreviations and acronyms Meaning 2 Project Customer, Sponsor and Project Manager 2.1 Project Customer Enter the name of the Project Customer. To delete this guidance text box, double click mouse in the left margin then press delete. Insert name is the Project Customer who is responsible for the end results of the project. Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 8 of 19 2.2 Project Sponsor Enter the name of the Project Sponsor. To delete this guidance text box, double click mouse in the left margin then press delete. Insert name is the Project Sponsor who carries responsibility for the delivery of the project. 2.3 Project Manager Enter the name of the Project Manager. To delete this guidance text box, double click mouse in the left margin then press delete. Insert name is the Project Manager who is responsible for the preparation of this document. 3 Stakeholders In the following table, list anyone with an interest in the Business Case, including internal stakeholders (from regions/districts/divisions/branches within the department) and external stakeholders. Include project customer and politicians as appropriate. This section should illustrate the engagement undertaken with stakeholders in developing the Business Case and the key findings of that process as outlined in the completed community engagement planner for that project. Findings may be expressed in tabular form (as below) if considered suitable. To delete this guidance text box, double click mouse in the left margin then press delete. Stakeholder Responsibility Interest/context 4 Background Provide a brief history to bring the reader up to speed on the subject matter of the Business Case, including a brief history. This section should describe the history of the project. It should include details of: -Who initiated the project and how it was initiated ( Include a clear statement of the real underlying problem to be addressed) (Include a brief history of past community engagement, issues and outcomes) Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 9 of 19 -Identify the impact of problems/issues over time -Describe any other initiatives carried out previously to address related issues. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 5 Current situation Describe here the current situation and the problems along with their associated impacts on internal and external stakeholders. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 6 Purpose/Objectives of the project 6.1 Purpose A statement of what the project is expected to achieve including potential benefits based upon the current state of knowledge and understanding. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 6.2 Links with the department’s strategic objectives A statement of how the project links to the department’s Strategic Plan and objectives. If the project has not originated from the Strategic Plan then the need/justification for the project should be stated, together with some demonstration that this project is the right one to satisfy the need or to solve the problem. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 7 Scope of project Statement of what the project is expected to achieve. The statements must be measurable and realistic. To delete this guidance text box, double click mouse in the left margin then press delete. Type here Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 10 of 19 7.1 In scope This defines the project boundaries to facilitate effective management of deliverables on time and to agreed/approved cost. The scope outlined in any previous document should be confirmed here or updated as necessary. List all items that are included in the scope of this project. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 7.2 Out of scope List identified items that will not be delivered as part of this project. This is most important as it specifies items which will not be undertaken as part of this project. This assists in managing/avoiding scope creep. The importance of individual out of scope items should be mentioned. Such items may pose significant risks to the project if they are not done at all by others. This may create risks for the project which need to be recognised and managed. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 7.3 Related projects List any related projects or proposals affecting this project (whether past, current or planned) and their relationship to this project. The impact of these on your project should be described. Such projects may pose significant risks to the project if they are not done at all by others or not completed in time. This may create risks for the project which need to be recognised and managed. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 7.4 Constraints Restrictions which will limit the way the objective is to be achieved (describe anything that might impact on the successful development and/or implementation of the project). This may include restrictions on budget /funding, political issues, limited resources to work on the project, timing constraints or constraints on the implementation of the outcomes of the project. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 7.5 Urgency Identify the urgency of the project stating reasons. To delete this guidance text box, double click mouse in the left margin then press delete. Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 11 of 19 Type here 7.6 Assumptions List all assumptions made in producing this document. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 8 Impacts This can be completed in narrative or table format. Identify areas of potential impact, the nature of impact and who will be impacted (internal and external). Include both the impacts envisaged during the life of the project (that is, costs, disruptions, temporary arrangements, and so on) and ongoing impacts resulting from the project’s product/deliverables. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 8.1 Internal This item describes when, where and how the project will impact on areas within the department and should include an outline of both positive and negative influences. Consider here the culture change and change management aspects that will be needed to introduce the proposed changes the project will bring. Impacts on staff and likely staff attitudes need to be considered as well as the impacts on the business. To delete this guidance text box, double click mouse in the left margin then press delete. Area within the department Nature of impact 8.2 External This item describes the impact that the project will have outside the department and includes both positive and negative impacts on external stakeholders. To delete this guidance text box, double click mouse in the left margin then press delete. Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 12 of 19 Area external to the department Nature of impact Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 13 of 19 9 Method to date In this section describe the steps taken in developing this document. Describe any investigations carried out, research methodology used and engagement (internal and external) carried out to date. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 10 Options Provide a summary of the options considered and why the recommended option was chosen. Where available, an executive summary of the Options Analysis paper should provide this information. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 11 Risk analysis Identify the risks associated with the project development and implementation. Document in the following table: probability, impact and high-level mitigation strategies. Include any risks arising from sections 7 and 8, along with any environmental, cultural heritage and safety issues. To delete this guidance text box, double click mouse in the left margin then press delete. Risk Likelihood (0-5) Consequences /severity (0-5) Risk rating (likelihood * consequence *4) Mitigation strategy Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 14 of 19 12 Issues List known issues to be resolved. Beware of political events stakeholder issues and influences that may affect the project and in this event, request guidance from the project customer. To delete this guidance text box, double click mouse in the left margin then press delete. Issue Status Action 13 Business processes/requirements Provide a summary of the Business Process changes and the Business Requirements Specifications completed to date. Refer to the Preliminary Business Requirements Specifications as attachments. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 14 Delivery approach Outline of steps to complete project. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 14.1 Resourcing strategy Detail the resources required to deliver the project. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 14.2 Standards Detail any standards or Australian or international standards which are applicable. To delete this guidance text box, double click mouse in the left margin then press delete. Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 15 of 19 Type here 14.3 Timing List overall timing factors which may constrain the order of project activities. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 14.4 Communication strategy Outline the approach to community engagement (information, consultation, active participation), tools used (e.g. focus groups, facts sheets, survey, hotline) as indicated in the project's community engagement planner, and provide an outline of the communication strategy. Consider the need for specialist community engagement and communications expertise. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 14.5 Change management strategy Describe the strategy for gaining acceptance of the changes that the project will bring. This is particularly relevant for internal culture change projects. It is useful to approach these with the same rigor as is applied to engaging the external community in 14.4. The need for change should have been clearly established in above Sections 4 Background, 5 Current situation and 6 Project purpose/objectives. The proposed approach to introducing the change should be described here. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 14.6 Issues management strategy Describe the approach to management of project issues. This may involve use of an internal corporate communications branch, dedicated staff or consultants. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 14.7 Risk management strategy Describe the approach that will be taken to minimise project risks. To delete this guidance text box, double click mouse in the left margin then press delete. Type here Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 16 of 19 14.8 Schedule Provide a high level schedule containing key activities and milestones. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 14.9 Procurement strategy Develop the procurement strategy for the project. Identify major items which need to be procured and any significant supply time delays that may be expected. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 15 Financial issues 15.1 Financial analysis Where applicable, show details of each phase with estimated costs. The estimate may also be in the form of a number of different scenarios such as worst case, best case and most likely (being the project’s Planning Estimate). Include details of what contingencies are appropriate. Details of key assumptions underpinning the financial impact of each scenario should be provided in this section (for example, worst case scenario may be based upon an increased customer enquiry level from a most likely level of 10% to a worst case level of 20%). All Business Cases should be accompanied by a financial impact analysis outlining both positive and negative cash flows. Projects may be cost only or revenue and cost (which includes those projects where positive cash flows are generated by cost reduction initiatives). The cash flow analysis should be time phased into years to facilitate the financial evaluation. Appropriate financial evaluation methods include a payback period for projects requiring modest levels of outlays over relatively short time horizons or discounted cash flow techniques such as Net Present Value (NPV) or Internal Rate of Return (IRR) for more significant undertakings over longer time frames. The strength of these financial analysis measures lies in their ability to indicate the financial acceptability of projects and in their contribution to the capital rationing process often adopted when allocating limited funds over unlimited requirements. Thus, a strong financial indicator should contribute positively to success in the project approval process. Sample worksheets of a revenue and cost project, and a cost only project are illustrated in appendices A and B of this document. Note that payback periods and Internal Rates of Return calculations do not apply to cost only projects since there are no positive cash flows generating a repayment cycle. Net Present Value, however, can be expressed as a negative number and still adopted for ranking of projects on a financial basis. The preparation of these financial indicators may require involvement of regions/districts/divisions/branches and/or Corporate Finance staff as a technical support resource. Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 17 of 19 The cost estimates can also be shown against major deliverables (for example, plan, software, hardware) or even a defined time period (for example, financial years). In any case, an expected year for programming of funds is required (for example, recommend that proposal be included in 2001/02 Capital Investment Program). To delete this guidance text box, double click mouse in the left margin then press delete. Type here Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 18 of 19 15.2 Funding Identify source, timing and cost distribution by region/district/division/branch if appropriate. To delete this guidance text box, double click mouse in the left margin then press delete. Type here 16 Project performance measurement Detail how the performance of the project will be measured during the project’s life. An example table format is shown below. To delete this guidance text box, double click mouse in the left margin then press delete. Success criteria Responsibility 17 Product benefits realisation Detail how the benefits of the project will be measured. This may or may not be during the life of the project. Consider business outcomes such as triple bottom line here. An example table format is shown below. To delete this guidance text box, double click mouse in the left margin then press delete. Success criteria Responsibility Measurement method KPI Target Project name Business Case Queensland Transport and Main Roads Version 1.0 27 April 2006 Page 19 of 19 18 Recommendation Provide a summary of reason why the project should proceed to the next stage and identify the impacts of not proceeding. Justification for the project could be based on a combination of the following factors: -Benefits to the business operations -Strategic direction -Cost/Benefit analysis -technology. To delete this guidance text box, double click mouse in the left margin then press delete. Type here When all information has been put into this document and the guidance text boxes have been deleted, it will be necessary to reformat the document taking out any blank lines. Once this is done, right click mouse in the table of content, click Update Fields, Update entire table, then click OK. This will update the table of contents to show the new page numbers. 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