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8.1 Introduction to Business Cases

8.1.1Appraisals should be undertaken and presented within a wider business case. Business cases should provide assessments of strategic fit, option appraisal, achievability, value for money and affordability. A business case should contain an economic appraisal and other information including the proposed arrangements for financing, management, marketing, procurement, monitoring and evaluation of the relevant policy, programme or project. The effort to be put into business cases should be in proportion to the scale and importance of the proposal.
8.1.2Documentation of the business case is required at various stages to inform key decisions. Prior to each key decision point, the business case document should be treated as a living document, to be revisited and updated regularly as information and assumptions are developed and refined. It is not just to be prepared for purposes of obtaining approval and then shelved.
8.1.3The terms business case and business plan are not interchangeable. DFP uses the latter term in the context of financially-assisted or commercially-oriented projects, for which a business plan is required in addition to an economic appraisal in order to establish project viability. Business plans are explained at section 4.5.6.
8.1.4Development of the business case for any proposal should be a continuous process from inception to implementation. Proportionate and appropriate effort should be applied in all cases.
8.1.5

For procurement projects, DFP generally advocates developing the business case through three stages:

  • Strategic Outline Case (SOC)
  • Outline Business Case (OBC)
  • Full Business Case (FBC)
8.1.6For proposals involving assistance to the private or voluntary sectors, this three-stage approach is not usually required, and the terms SOC, OBC and FBC are not generally used. In such cases, the business case should be developed through as many iterations as are judged necessary to cover all of the issues set out in section 4 of NIGEAE.
8.1.7Departments should document the development of business cases at all key stages of project life. For procurement projects, this means documentation of the SOC, OBC and FBC in all cases. Until they have been finalised and served their purpose, business case documents should be regarded as living documents to be reviewed regularly and updated to reflect significant changes to key assumptions.

Read on to Strategic Outline Case (SOC)

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