The ‘New’ Way to Write Business Cases?
By Emma-Ruth Arnaz-Pemberton
As part of the Wellingtone PMO Practitioner course we get to regularly discuss the benefits of practices that a large proportion of people don’t know about. One example of this is the HM Treasury The Green Book – The five case business case model.
The Green Book was first published in 2013, with an update to the supporting guidance in October 2018. It is the de facto way of doing Business Cases in Government (and related institutions), in the same way that Gateways are for stage gates.
The Green Book encompasses guidance on how to appraise and evaluate policies, projects, and programmes using five lenses (cases) to obtain all the perspectives needed to make an informed decision.
The Strategic Case
Looks to review the proposal against its alignment to organisational (or departmental) strategic objectives. We all know that it is pointless for an organisation to invest in activity that will not bring about beneficial change, so the strategic case looks to ensure that the investment (if made) will enable the successful delivery of the anticipated benefit(s) in line with the direction of the organisation.
Economic Case
The appropriateness of the activities undertaken when changing the business must be validated. The Economic Case provides a line of sight for organisations to know that investments will be money well spent through the value it will deliver. Value is defined as that which the organisation directly benefits from, as well as the social and economic consequences of the decision.
Commercial Case
Change should be financially attractive commercially both during (who will deliver it) and after implementation (how will we know we’ve been successful). The Commercial Case ensures there is focus on the procurement strategy and that it works for both customer and supplier, to allow for effective decision making.
Financial Case
An investment might appear to be providing value for money, but it also needs to be affordable for the organisation at a point in time. The Financial Case looks to ensure that the necessary funding and resources are available to pay for (or deliver) the activity regardless of the benefit(s) it promises.
Management Case
Many activities have a good solid strategic, economic, commercial and financial case, but if it is not managed well it will fail in delivering the promised value. Organisational and delivery governance must be in place, and the Management Case tests for these. It is important to remember that Capacity plus Competency equal Capability, not the other way around.
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The Green Book is a solid, tried and tested approach to Business Cases, which incorporates all the perspectives needed to make an informed decision on investment, risk and change that an organisation is willing to take on.
One of the Wellingtone PMO Principles is that a PMO should strive to be the single source of truth. In the Business Case context, one of the key responsibilities of the PMO is to assure that Business Cases do not fall into the trap of the Planning Fallacy* (Kahneman and Tversky) or strategic misrepresentation** (Bent Flyvbjerg) and are therefore fairly represented.
Another of the Wellingtone PMO Principles cites that PMOs are instruments of Integration. The Five Case approach to writing Business Cases denotes the importance of managing the project front-end well and of taking into consideration a more holistic interpretation of the Business Case; it’s not just about financials anymore.
In order to implement this approach into an organisation successfully, PMOs should prepare familiarisation to all writing Business Cases and ensure that they understand the interfaces needed for users to be supported through each of the five cases; where to obtain information, etc.
You can read more about The Green Book HERE
