The program business case (Figure 3.1) is an input to the program from an external source. It describes, among other things, the program’s cost-benefit justification.
Quite naturally, this information is important in many processes within the pro-gram. The business case is an input to the initiate program process in the Standard for Program Management—Second Edition (2008).
Program Business Case Instructions
Purpose: A brief introductory statement defining the purpose of the program business case, such as:
The program business case describes the need, feasibility, and justification for the program.
Typically, this document is prepared by the program sponsor with input from other key stakeholders. It may be provided by the client or the funding organization. It serves as the mandate for the program, and it is prepared before the program is approved, as it is the key document used in selecting the
Program Management Life Cycle: Pre-Program Preparations Initiate Program
Program Business Case Plan Program Scope
Change Requests Approved Update
Develop Program Requirements
Establish Program Financial Framework Initiate
Program
Establish Program Financial Framework
Figure 3.1 Program business case.
The Pre-Program Preparations Phase 11
program for approval by the organization’s portfolio review board or other decision-making body. Once approved, the program initiation phase begins.
Although the business case is prepared to initiate the program, it should be revisited and updated as required on a regular basis to ensure that the pro-gram continues to meet its objectives and is delivering its expected benefits.
Program strategic objectives: This section describes the expected results from the program. It shows how these expected results complement the organiza-tion’s strategic objectives. It states the vision or end state of the program, the mission or why the program is important, and the values to be used in mak-ing decisions concernmak-ing program activities. The program’s objectives must be aligned with the organization’s strategic plan and goals.
Program benefits: A benefit is an improvement to the running of an organiza-tion that provides utility to the organizaorganiza-tion. Benefits may be financial or non-financial, tangible or intangible. This section describes the expected benefits to be delivered through the program, such as to enhance existing capabilities or develop new capabilities. It explains why it is more appropriate to manage this initiative as a program rather than as separate projects, and describes the types of projects that probably will be part of the program and the collective benefits to be realized through a program management structure.
Required resources: This section provides a high-level estimate of the resources required for the program. It includes all resources, not just human resources, and shows why they are needed and when they will need to be available. It highlights the value of the program against the resources that are required for its successful implementation.
Financial analysis: This section contains the financial analysis of the program in terms of financial indices, such as the return on investment, net present value, and the payback period. It shows the costs to execute the program compared to the benefits to be realized by the program. These indicators should be tracked throughout the program. This section describes sources of program funding, trends in labor and material costs, and contract costs as appropriate.
Internal and external influences: Programs may be initiated for a number of reasons, and there are a wide range of internal and external influences that can affect the program or show the reason it should be undertaken. This section describes these influences. If it is an external program, this section states the market demand for the program and any barriers to entry. Time-to-market data are included in this section. In addition, these influences may affect the execution of the program. This section describes these influences and why they are significant to the program, as they often become program constraints.
Alternative analysis: Because of resource limitations and other constraints, it is necessary to recognize that competing initiatives exist in the organization as all possible projects and programs cannot be approved. This section describes the results of alternative analyses, or “what if” analyses, to show different approaches that could be considered in order to meet the program’s intended
12 Implementing Program Management: Templates for Success
objectives. Feasibility studies may be included as well in this section. It is used to show that initiating this program is the most effective way to meet these objectives and deliver the expected benefits.
Program complexity: Programs are initiated because of the need for some type of change to implement new capabilities to be used within the organization or by customers or to enhance existing capabilities. This section describes the complexity of this change initiative to best determine whether or not it should be managed as a program and undertaken by the organization.
Approvals: This section contains the written approval of the program business case by the members of the portfolio review board or similar group and any other key stakeholders as appropriate.
Program Business Case Template
<Insert Program Name>
Program Business Case
Program name:
Program sponsor:
Proposed start date:
Proposed end date:
Date prepared:
Revision history:
Business unit:
A. PurPoSe
A brief introductory statement defining the purpose of the business case, such as:
The program business case describes the need, feasibility, and justification for the program.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
B. ProGrAM STrATeGIC oBjeCTIveS
This section describes the expected results from the program and how they com-plement the organization’s strategic objectives.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
The Pre-Program Preparations Phase 13
C. ProGrAM BeneFITS
This section describes the expected benefits to be delivered by the program. It describes why it is more appropriate to manage this initiative as a program rather than as separate projects.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
D. requIreD reSourCeS
This section provides a high-level estimate of the resources required for the pro-gram. It highlights the value of the program against the resources that are required for its successful implementation.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
e. FInAnCIAl AnAlySIS
This section describes the results of the financial analyses that were conducted and describes sources of program funding, trends in labor and material costs, and contract costs as appropriate.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
F. InTernAl AnD exTernAl InFluenCeS
This section describes the internal and external influences that show why the pro-gram should be undertaken and also that may affect the propro-gram if it is approved.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
G. AlTernATIve AnAlySIS
This section describes the results of any alternative analyses that have been under-taken to show different approaches that could be used in order to meet the pro-gram’s intended objectives. Any feasibility studies that were undertaken can be attached to this section.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
14 Implementing Program Management: Templates for Success
h. ProGrAM CoMPlexITy
This section describes the complexity of the initiative to determine whether or not it should be managed as a program and undertaken by the organization.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
I. APProvAlS
This section contains the approval of the program business case by the members of the portfolio review board and other key stakeholders as required.
SignatureSand date approval obtained
Portfolio review chairperson ____________________________________
Portfolio review board member 1 ____________________________________
Portfolio review board member 2 ____________________________________
Portfolio review board member N ____________________________________
Stakeholder 1 ____________________________________
Stakeholder 2 ____________________________________
Stakeholder N ____________________________________