The business case:
- validates or amends the project assumptions
- clarifies the quantitative and qualitative costs, risks and benefits from a whole-of-life perspective
- provides a project plan that will steer the project’s implementation
Inherent in the analysis of the costs, risks and benefits from a whole of life perspective is a requirement that the societal need for the project be thoroughly and robustly examined.
The investment will only offer a true value for money outcome if the expected benefits are appropriately linked to a societal need.Futher information on business case preparation can be found in the Victorian Government's Business Case guideline.
This work then enables government to decide whether the investment should be funded, taking into consideration:
- The merits of the investment;
- The merits of other competing investment proposals; and
- The available budget.
Analysing Options in the Business Case
A business case should, at a minimum, compare the preferred option against a “do nothing” option. This is necessary to properly inform government of the merits of making the investment, in comparison to the situation if the investment is not made.
Preferably, the business case should also provide and analyse one or more alternative options to demonstrate that the preferred option is in fact the most appropriate investment to make.
Analysing options requires an examination of:
- The possible stakeholders in the project, and their needs
- The critical assumptions underpinning the analysis, and constraints affecting the project
- The social and environmental impact of the investment
- The financial and economic impact of the investment
- The risks associated with the investment.
Outcomes of the Business Case
In the State of Victoria, a completed Business Case enables government to answer three key questions:
- Should the project be funded? This is the Investment Decision.
- How should the project be delivered? This is the Procurement Decision.
- What governance arrangements should be put in place? (In other words, what allocation of roles and responsibilities within government, and what decision making processes, are required?) This is the Governance Decision.