Issue 1 - No spend capitalised in advance of business case approval.
Recommendation 1 - Finance staff to require signed business case to open capital funding line.
Issue 2 – The process of completing an outline business case is complex and requires consideration and justification of all options and all associated expenditure and risk. It takes considerable time and effort to do correctly.
Recommendation 2 – Sufficient time should be built into plans to allow for a robust consideration and costing of options. Expert economic advice should be sought at an early stage of the business case development process.
Issue 3 – Operational and maintenance costs not fully considered in business case.
Recommendation 3 – Make sure to budget for maintenance.
Issue 4 – Any pre-business case spend should be minimal and captured as sunk costs in the business case.
Recommendation 4 – All business cases to state sunk costs (or nil) explicitly; this to be part of QR checklist.
Issue 5 – Key stakeholder was unable to quantify the benefits of the new IT system and subsequently offered limited input to the Full Business Case.
Recommendation 5 – It is important that key stakeholders have a thorough understanding of the benefits of a project and have input where necessary. The project team should develop a benefits management plan to ensure benefits of investment are clearly understood and robust plans are in place to achieve them.
Issue 6 – Expenditure appraisal and approval and responsibility for securing funding rested with the SoSNI and the NIO. The Department had no sight of a business case prior to the Regulations coming into force and the Department was not the ultimate decision maker in terms of the shape of the final Scheme.
Recommendation 6 – Given the high profile and sensitive nature of the Scheme and due to the uncertainty in terms of its reach and overall cost, a business case should have been undertaken by the Department which was responsible for designing the Scheme.
Issue 7 – A robust assessment of risks was not included in every business case.
Recommendation 7 – Each project should have its own risk register.
Issue 8 – Business case costings were well considered and forecasts for demand were based on historical data. However, it was noted that this could/should have been done earlier in the project.
Recommendation 8 – Establish costings at earliest possible time and continue to ensure they are realistic and based on historical data to give the most accurate forecast.
Issue 9 – Business case not aligned to specification document and procurement documentation following revision. Addendum to business case had to be drafted and submitted to Finance Branch, requesting approval to change chosen option.
Recommendation 9 – Work closely with CPD to ensure procurement can proceed and that business cases and specification align.
Issue 10 – Lack of control of scope.
Recommendation 10 – A detailed description of specification and scope included in the business case, and fully costed by relevant specialists.
Issue 11 – Ensure sufficient breadth of options and scenarios is considered in the business case.
Recommendation 11 – Critique this during business case review; ensure that options appraisal is not a rationalisation of a pre-selected preference.
Industry guidance/ further reading
PRINCE2, Managing successful projects with PRINCE2, 6th edition (2017), chapter 6. This covers:
- Creating and maintaining the business justification
- The relationship between outputs, outcomes and benefits
- Developing and managing a business case
- PRINCE2’s requirements for the business case theme
- Investment appraisal techniques
APM, APM Body of Knowledge, 7th edition (2019), section 1.3.7.
NICSHR, Better Business Cases NI - Practical Application of the Five Case Model (Virtual Classroom)), via LInKS.
Commercial Delivery Group’s Programme and Project Management hub: Business Cases | Department of Finance (finance-ni.gov.uk). Includes guidance on:
- Appraising, developing and planning using the Five Case Model (Better Business Case NI)
- An overview of business cases for economic appraisal.