Project title: Five Case Public Sector Business Case Development

Background

In 2016 Abellio, the commercial train operator owned by the Dutch national railways was awarded the franchise for the operation of the national rail network in Scotland. In winning the franchise they agreed to a number of committed objectives that they would achieve over the course of the 7-year period the franchise was awarded for. One such objective was to realise smart travel across the rail network in Scotland;this particular objective was highly politicised due to commitments within the Scottish National Party’s manifesto which had one the preceding Scottish parliamentary elections.

To support the necessary investment of £12million in the realisation of this critical IS infrastructure and meet the committed objective the technical client was required to develop a comprehensive business case to gain approval for the investment.

In line with governmental guidance AMDS Consultants Ltd began the development of a five-case submission to obtain approval for the investment from the Abellio UK subsidiary and the Dutch Government owners. The model required we develop on behalf of the client the following cases:

  1. The Strategic Case
  2. The Economic Case
  3. The Commercial Case
  4. The Financial Case
  5. The Management Case.

Work Completed

Over the course of the 6-week project we completed:

  • All five separate cases from scratch
  • Major programme of business analysis to obtain data to support each of the five cases
  • Calculations of ROI (return on Investment) and IRR (Internal Rate of Return)
  • Extensive stakeholder management to process the business case through several management layers
  • Developed a range of optional scenarios relating to:
    • the likely uptake of smart travel
    • potential cost savings across the organisation
  • Analysis of the process, structural and procedural changes to facilitate ROI

Issues Addressed

Although the acquisition of the Information Technology infrastructure for smart travel was endorsed no business case had been prepared to gain the investment funds. Consequently, a number of stakeholder management issues had to be addressed including buy-in, data acquisition, staff impacts and financial risks as well as re-setting the expectations of the technical team. All of these issues had to be addressed as the business case portfolio was developed.

It was also apparent after the completion of the acquisition programme that the buying teams had significantly underestimated the likely cost of the investment in their communications with senior stakeholders. It therefore became imperative that new data sets were obtained, ratified and applied to the development of the business case.

Outcomes Achieved

The following outcomes were realised:

  • All five individual cases were developed, progressed through the UK management chain and briefed to the Dutch owners.
  • Weak data areas were addressed, and the potential financial risk defined
  • The acquisition programme went ahead but over an elongated time-frame to accommodate the significant increase in acquisition cost

Lessons Learned

  • The five-case model is a powerful tool for examining all aspects of any major investment and the business case that supports it.
  • It is unhelpful to proceed with a major investment procurement without having at least initiated discussion with senior stakeholders. To fail to do so add complexity to stakeholder management, information gathering and raises concerns about purpose, goal and objective.
  • It is however very repetitive and time-consuming if the required data is not readily available or the specific priorities of the organisation do not reflect the rigour of the model structure as was the situation in this case.
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