An Outline Business Case (OBC) sets out the preliminary thoughts regarding a proposed project. It should contain the information needed to help the institution make decisions regarding the adoption of the project. It should state envisaged outcomes, benefits and potential risks associated with the proposal.
A well written OBC will help the decision makers to make the right decisions regarding which projects to support or reject and to achieve value for money over the whole life of the project - the Financial dimension of the Whole Life Costing model you can calculate the likely total cost of funding and generate outline cash flow statements covering the project’s life.
Initially the OBC may be a fairly ‘conceptual’ document, however, as time passes and, hopefully, support for the project increases, the OBC will be revised into a much more robust Business Case that eventually becomes the blueprint for the investment decision.
When preparing an OBC, ask yourself the following types of questions:
- Is the business need clearly defined? (eg the current item of equipment is x years old, starting to breakdown on a regular basis and is becoming costly to maintain; the student accommodation is now 30+ years old and not of a standard today’s students expect)
- Have the benefits of supporting the business case been clearly identified and does it fit in with the institution’s current strategies? (eg the institution has made a strategic decision to concentrate on a specific academic area and a landmark building is required to facilitate the research and promote the specialism as a Centre of Excellence)
- What are the various options? (eg again for equipment, would refurbishment of existing or an ex-demonstration model etc be a viable alternative to new equipment? For a service need, can it be provided in-house or by an external provider?)
- What risks are associated with this project? (eg the equipment fails completely and the service it provides is not readily available elsewhere; students will not take accommodation in the older residences; the service is not being provided in a cost effective manner and therefore does not represent value for money)
Note: as with all procurements the time taken and the level of detail in the OBC will reflect the value and risks associated with the proposed project. More detailed guidance, especially in relation to major procurements, is available from Central Central Government in their Guide to Developing Business Cases.