Business Case

developing a business case

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A business case for a proposed or evolving scheme must demonstrate the economic and social viability and robustness of the scheme as a whole.

Where the scheme depends on collaboration and contribution from multiple stakeholders, the business case must establish a viable and attractive proposition for each stakeholder.

We use a range of models to develop business cases, as part of our model-based management approach.

We have recently been involved in developing a business case for a collaborative smart card scheme.

Planning Complex Collaborations

Business case establishes attraction of scheme

veryard projects > planning > business case > scheme attraction

Business Case should produce a viable and attractive business proposition for each participant:

Service provision and consumption
Value creation opportunities and partnerships
Allocation of risk and reward
Provision for extension

The business case indicates the benefits available at each stage – and therefore gives each stakeholder the justification for a given level of investment and participation.

A complex scheme typically provides multiple sources of value. These sources of value interact with one another – either positively (which we call the "multiplication scenario") or negatively (which we call the "interference scenario").

Programme management is then focused on promoting the multiplication scenario and avoiding the interference scenario.

Business case establishes viability of scheme

veryard projects > planning > business case > scheme viability

	The business case for a complex scheme typically depends on scheme dynamics, including the extent / impact of behaviour modification. For example, the viability of a smart card scheme may depend on the extent to which consumers modify their purchasing behaviour, as well as the extent to which service providers are prepared to modify their business processes.
	A scheme typically has a controlled ramp-up ovevr time. The distribution of stakeholder costs and benefits, as well as the risk profile, changes as the scheme expands.
	Successful operational management of the scheme will depend on careful monitoring of the scheme dynamics. Control of the scheme may involve adjustment to operational policies.

Business Case Models

veryard projects > planning > business case > models

business case

The logic of the business case is developed through a series of interconnected models.

1 Stakeholder Model

Who are the participants in the scheme?

2 Service Value Model

Operational Services: What participants do for one another
Pricing. What available services cost.
Abstract Value. What stakeholder value is available to the scheme

3 Value Protection Model

Risk Model: Threats to stakeholder value
Security Model: Required security mechanisms
Trust Model: The commitments must participants must provide

4 Value Development Model

Takeup Model: Expected rate at which people will join the scheme
Growth Model: How the scheme creates value over time?

5 Consolidated Value Model

What stakeholder value can be realised in what timeframe
Strategic options resulting from interactions between base models

veryard projects > planning > business case