Project Detailed Business Case Better Business Cases “Investing for change” Project Detailed Business Case Programme Strategic Assessment Programme Business Case Project Strategic Assessment Indicative Business Case Detailed Business Case Implementation Business Case Project Strategic Assessment Single Stage Business Case

Project Detailed Business Case Purpose Revisit the case for change and the preferred way forward Determine the preferred option that optimises value for money Outline the potential deal and assess affordability Outline a plan for delivering the proposed project

Project Detailed Business Case Strategic Strategic Case (Revisit) Action 9: Revisit the indicative business case Review the case for change and consider changes since the indicative business case was developed. This revisits the strategic and economic cases for change. Strategic case: -Note the changes made to the underlying assumptions in the indicative business case. -This could be due to conditions made as part of IBC, external stakeholders influencing the direction of the proposal, and/or other elements changing during the time elapsed since stage 1 approval . Economic case: -Review and refine earlier work on the long-list and the preferred way forward. -If there have been any changes in the underlying assumptions since the initial options assessment, consider whether any of the short-list options are: •likely to fail to deliver the investment objectives and critical success factors •likely not to deliver sufficient benefits •clearly impractical or unfeasible •clearly inferior to another option •likely to violate any of the constraints •clearly too risky. •All changes made to underlying assumptions should be noted within the opening section of the economic case.

Project Detailed Business Case Economic Project Detailed Business Case Economic case Action 10: Economic assessment of the short-listed options or preferred alternative procurement option Action 11: Intangible benefits and costs Action 12: Risk and uncertainty Action 13: Preferred option and undertake sensitivity analysis Complete the risk assessment: -This is the overall process of risk identification, risk analysis/risk evaluation. -Review the risks identified in action 5. -Use AS/NZS ISO 31000:2009 and ISO/IEC 31010 for further guidance. -Tailor the extent of risk analysis to the relative size, impacts and risks Complete the quantitative risk analysis: -This ensures risks, and their financial impact, are explicit to decision-makers. -Financial and non-financial impacts must also be considered. -Once the risk is known, contingency amounts can be identified. -Quantitative risk analysis includes detailed sensitivity analysis and analysing the likely effect of scenarios. -It involves assessing each probability & modeling how the total project will turn out. -This will produce an estimated probability distribution of likely total costs. --The risk modelling process involves - building the models, including distributions for uncertain inputs, simulating outcome distributions, generating outcome graphs and tables, and reviewing and revision as necessary. -This should only be performed by an accredited expert. Stakeholders do the economic case thinking together in one or more two hour workshops led by a facilitator.

Analysis of the short-listed options Economic Analysis of the short-listed options Option 1: Do Nothing Option 2: Do Minimum Option 3: Preferred Minus Option 4: Preferred Way Forward Option 5: Preferred Plus Appraisal Period (years) 20 Capital Costs ($m) 0.0 22.5 23.9 31.6 45.7 Whole of Life Costs ($m) 14.4 24.2 49.7 70.7 90.9 Cost-Benefit Analysis of monetary costs and benefits at the Public Sector Discount Rate Present Value of Benefits ($m) 2 25 75 115 126 Present Value of Costs ($m) 7 23 40 52 73 Benefit Cost ratio 0.3:1 1.1:1 1.9:1 2.2:1 1.7:1 Net Present Value (NPV, $m) (5) 35 63 53 Multi-Criteria Analysis ranking of intangible costs and benefits (if any) Criteria 1 1 3 5 Criteria 2 4 Criteria 3 Preferred option Yes

Project Detailed Business Case Commercial case – Preparing for the Potential Deal Action 14: Procurement strategy Action 15: Service requirements Action 16: Risk allocation Action 17: Payment mechanisms Action 18: Contractual and other issues Financial case – Ascertaining Affordability and Funding Requirements Action 19: The financial costing model Commercial Financial

Project Detailed Business Case Management case – Planning for Successful Delivery Action 20: Project management planning Action 21: Change management planning Action 22: Benefits management planning Action 23: Risk management planning Action 24: Post-project evaluation planning Management

Detailed Business Case: In summary Detailed Business Case: Revisit the case for change and the preferred way forward Determine the preferred option that optimises value for money Outline the potential deal and assess affordability Outline a plan for delivering the proposed project