Business Case ProcessBusiness Case Process

John DiNofrio

Gary Graybill

April 8, 2003

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Overview

• The Business Case is a standardized management tool that captures planning information about a new project.

• It is constructed by the originator, the sponsor, and the performing organization to document business decisions.

• It should be used to help decide if a project/program proceeds.

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Business Case Objectives

• The Business Case is the basis of a presentation to decision makers so they may make more informed decisions.

• It is a formal document that is reviewed and signed by the originator, sponsor, and the performing organization to ensure all parties understand and agree on their roles and responsibilities.

• It should be signed by decision makers to approve and grant authority to proceed.

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Business Case Requirements

• Business Case needs to be developed:– External New Business

• DOT other than FAA• Other Government Agencies – Military, State and Local Gov’t., etc.• Industry• Academia• International

– New Projects valued at over $50K • Example - VizSim Lab

• Business Cases are not required:– Existing Projects and Customers– Projects with PDs– Follow-on to Existing Projects

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Business Case Timeline

• Due Diligence – Begins with initial discussions to determine project feasibility

• Business Case Development – Begins when “players” begin to formalize and document business decisions. This cycle ends when all are satisfied with the documented decisions and sign the Business Case.

• Review/Approval – Begins with the development of the Business Case Presentation and ends after the Business Case is presented and approved.

Due Diligence (Initial Discussions)           

     Business Case Development

     

               Review/Approval Cycle

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Business Case Process

• Each LOB personally commits to ensuring business cases are developed

• Each LOB will develop their own process to track and approve business cases

• All business cases that go to the SLT for approval will be maintained by LOB and ACF– Tech Center wide initiatives– Initiatives that require funding outside of LOB budget– Initiatives > $$$

• On a quarterly basis, the number of business cases developed and ROI will be tracked for measurement reporting

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ACF’s Roles & Responsibility

• Assist the originator, the sponsor, and the performing organization in developing the business case

• Provide support to the SLT and LOB staff throughout decision making process

• Provide support to the originator in developing the financial case for the program/project

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Next Steps

• SLT and LOB ensure that business cases accompany project requests.

• LOB develop internal process to carry business case from due-diligence to approval.

• ACF develops corporate processes..

• Begin tracking business cases and ROI’s for corporate measurement reporting.

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Summary

• The Business Case process establishes a standard procedure for documenting new business opportunities.

• Business Cases are required for:– External New Business Opportunities (i.e. other than FAA)– New Projects valued at over $50K (i.e. VizSim Lab)

• The Business Case ensures buy-in from project stakeholders and grants approval to proceed.

• The Business Case Template provides guidelines as well as format instructions.

• It is available now!• Suggestions for Business Case Template improvement

should be made to ACF-1.

Backup

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Business Case Contents

• The Business Case contains key information to support informed management decisions – Describes the project and approach (What is this Project

about?)– Lists organizational stakeholders (Who is involved?)

• Sponsor (funder)• Originator (if different from performer)• Performer• Stakeholder• Benefactor• Competitors

– Lists Benefits (Why do this Project?)• Relevance to Corporate Goals• Intrinsic or Derived

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Business Case Contents(Continued)

– Costs (How much will this cost?)• Resource Requirements

• Facility Requirements (e.g. Laboratories)

• Other (Materials, Equipment, etc.)

– Revenue (How much will it bring in?)– Schedule (How long will the project take?)– Risks (What could cause the Project to fail?)– Assumptions (What constants are required for success?)– Summary– Recommendations (Request for signature authorizing

approval to proceed.)

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Business Case Cover Page Sample

William J. Hughes Technical Center

Business Case

Surface Movement Advisor (SMA)Extended Deployment

 

February 24, 2003 

Originator: 

Darrell WoodsEnhanced Traffic Management System

(ETMS)/ Surface Movement Advisor (SMA) Group Manager ACB-720

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Business CaseTable of Contents Sample

 Executive Summary

1.0 Project Name2.0 Business Case Participants2.1 Originator/Requestor2.2 Performer/Acquirer2.3 Sponsor2.4 Stakeholders, Customers (internal and external)3.0 Competitors4.0 Situational Assessment (Current State) and Problem Statement4.1 Project Description and Scope4.2 Proposed Solution/Approach5.0 Resource Requirements6.0 Timeline / Milestones7.0 Financial Assessment7.1 Costs

8.0 Mission Relevance to Goals8.1 FAA Goals8.2 ARA Goals8.3 Technical Center Goals9.0 Benefits9.1 Intrinsic or Derived Benefits9.2 Measurable Benefits10.0 Cost and Benefit Analysis11.0 Assumptions and Risks11.1 Project Assumptions11.2 Risk Assessment11.2.1 Adverse Impact Of Not Performing The Project11.3 Risk Summary12.0 Conclusions and Recommendations13.0 Approvals and Authorizations14.0. Document Change History

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Sample Financial AssessmentVizSim Lab