Key components for a successful Business Case

A Business Case can be a powerful tool in obtaining the funds you need to drive change in achieving optimally performing systems. We explore 9 common components of a well written proposal.

Navigating the world of submissions and proposals can sometimes feel like a juggling act. With your day to day workload and an ever changing industry it may be difficult to secure capital for investments to return long term benefits.  

Although procurement of funds for requirements such as preventative maintenance may be easier to obtain through OPEX, the focus has traditionally been on short term benefits. Whereas in the longer term, capital investment can provide performance and economic benefits that outweigh short term gains.  

While maintenance is a necessary ongoing cost, advancements in technology such as fault detection, isolation and restoration offer the possibility of reliability improvements for larger and longer-term benefits to utilities and consumers.1

Maximise the impact of your business case with these key elements:

Overview
An executive summary should provide the following:

  • A brief snapshot of the problem that you are addressing
  • An overview of possible solutions to achieve cost and performance benefits
  • Include contributors and people that you have consulted to reflect internal support and provide the decision maker with further confidence in your Business Case

Business Strategy & Goals
Be aware of your organisation’s overall strategy and goals. If your proposal is counter intuitive to these goals gaining approval for funds can become more difficult. Keeping in line with your organisation’s strategy shows a clear path to how your project can help the business achieve its targets.

It is important to have an understanding of whether or not your Business Case requires a philosophy shift in the way your organisation is structured and/or operated. Taking into account a broader view that looks at the ripple effect outside of the short term expense of your project can add more credibility and substance to your proposal, as well as assist in understanding where change is needed.  

Project Outline

A concise and informative project outline based on reliable data can add weight to your Business Case. These fundamentals will help the reviewer gain a better understanding of your proposal:

  • Clearly state why you are proposing the project, making sure business needs are addressed
  • Include a clear analysis of the problem
    • If reviewers fail to understand the problem they will not connect to why resolving it is necessary, which in turn can limit the success of your Business Case.
  • Provide data that shows urgency of the problem  
  • Define what areas of the business are being affected
  • Include options to resolve the problem and relate the remaining sections of the proposal to these options  
    • If you are including a status quo option, one that requires no change from the current situation, it is important to address the impact of doing so, especially in terms of how it will or will not address the problem being faced
    • Include details of alternate timelines if the options have different schedules2
  • Reference industry standards and guidelines that your project aligns with as this can have a positive effect on cost savings
  • Utilise visual tools where necessary to ensure the project will be clearly understood

Timeline & Plan
A detailed timeline and strategic plan should cover:

  • How you will achieve the desired outcome including key milestones and significant deliverables2  
  • What resources will be required
  • Clear indication of the required roles and responsibilities
  • How the project will be monitored and what Key Performance Indicators (KPIs) will be implemented to ensure targets will be achieved at the various stages
  • Whether your plan will have an impact on existing organisational events such as shutdowns, corporate, operational and/or structural changes. It is also worth noting if such events will have an effect on your project.

Benefits  
Benefits can be defined as detail savings in terms of revenue and productivity that are a result of achieving greater efficiency.2 An effective representation of benefits typically includes:

  • Measurable financial benefits which will be used later for comparison against costs to reflect the actual Return on Investment (ROI)
  • Societal impacts such as increased staff morale or consumer satisfaction can be included but should not be the primary focus
  • Detailed information on the source of your data and assumptions regarding calculations adds further credibility to your proposal.

Risks
It is critical to cover all potential risks as decision makers will be looking for analysis that includes:

  • Risks associated with the problem and the likelihood of these occurring in easy to define terms, i.e. low, medium, high
  • Consideration of threats and opportunities that can inhibit or maximise return from the project
  • Risks related to proceeding or not proceeding with the proposal  
  • Specific risks linked to the various options presented

Economic Costs
For a comprehensive proposal it is imperative to ensure all costs are detailed clearly and concisely. Quantifiable costs relating to CAPEX can be categorised into one or more of the following:

  • Reliability
  • Security  
  • Efficiency
  • Performance Improvement
  • Safety

Non-quantifiable costs such as credibility and reputation should be acknowledged ideally in terms of how they impact quantifiable costs and benefits.3  

Recommendations
Present your final recommendation and why you have come to this conclusion. Highlight the benefits and costs involved, and ensure the recommended solution clearly shows the greatest ROI. Easy to understand formats such as tables are powerful tools in relaying your point to the reviewer. As most of the detail has already been covered, you can present this information in a summary format.

Summary
The concluding summary is your opportunity to emphasise the crucial parts of your Business Case that you want decision makers to remember. It should include:

  • The problem and business need - why you are putting forward your Business Case
  • Benefits and risks of the options - solutions to the problem
  • Return on investment - what the overall gain will be to the business
  • Final recommendation - based on the information presented

Business Case Tools
The links below have been referenced in this article and provide further information on Business Case models within the energy sector.

References:
1. ABB Building a Business Case – Capital investments in grid reliability http://poweranswercenter.com/1308
2. Energy Efficiency Exchange – Writing your Business Case proposal http://eex.gov.au/energy-management/the-business-case-and-beyond/writing-your-business-case-proposal-a-summary/
3. HBR Guide – Building your Business Case https://hbr.org/product/hbr-guide-to-building-your-business-case-ebook-tools/an/16980E-KND-ENG