- Foreword and Introduction
- 1: Putting projects in context
- 2: Entity arrangements
- 2.1 Strategic alignment
- 2.2 People and culture
- 2.3 Effective governance
- 2.4 Common APS Requirements
- Summary for entity arrangements
- 3: Individual project proposals
- 3.1 Clarifying the concept
- 3.2 The business case
- 3.3 Approving the project
- Summary for individual projects
- 4: Project implementation
- Appendices
- Quick reference card
PDF version of guide [3.0MB]
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Tips for PDF and HTML versions [0.5MB]
Word version of checklists [0.1MB]
Options
Better Practice results: Options are provided that justify the broad investment, and provide opportunities for fine-tuning by decision-makers of that investment.
Decision-makers initially need to consider whether an investment, of some estimated cost, is warranted. This initial decision is aided by comparing the preferred scope of the project with the status quo.
If there is general merit in an investment, the next issue for decision-makers is whether some variation of the proposal might obtain a better overall result, taking into account practical constraints, other objectives such as moving toward a preferred delivery model, and the opportunities offered by other projects. This more nuanced decision is aided by comparing variations of the preferred scope of the project.
Options should provide decision-makers with real choice
“The best business cases provided several options that would make real progress on the issue, but with a range of costs and benefits. The least useful business cases simply gave an unacceptable status-quo, an unaffordable utopia, and the sponsor’s preferred project. That style of all or nothing business case makes it harder for us to juggle our available capital across the priorities of the agency.”
…. Member, agency project review committee.
To assist decision-makers to make these judgements, important issues for attention by the project sponsor in relation to options are:
- thinking broadly about possible approaches to meeting the requirements, to increase confidence that the recommended approach is indeed the best value-for-money – including:
- alternative delivery approaches, such as through other entities or by outsourcing; and
- considering whether there may be innovative options worth exploring;
- involving stakeholders and alternative perspectives in identifying options; and
- focusing the options presented in the business case so the most useful alternatives are visible to decision-makers.26
In addition, the sponsor can help reduce the cost of preparing and assessing a large number of options by providing guidance to the project planning team on:
- relative priorities of different project requirements;
- priorities for delivery approaches to be explored; and
- constraints that may rule out particular options, such as availability of capital or operating funds, and timeframe constraints.
Generating options
One dimensional options
“What concerned me about the business case for a new data warehouse was the options were all for different technical implementations – with relatively similar costs but varying risks and ICT features. No options were provided for varying the data coverage of the project, the types of analytical capabilities, or the phasing of implementation. Those options were the ones that would have varied significantly in cost and benefits. The business case was sent back for re-work.”
… Member, agency project review committee.
Options can be generated on at least two dimensions:
- Requirements: using various combinations of requirements, such as varying performance levels, functions available and so on. As discussed in the previous section, each set of requirements will provide different benefits.
- Solutions: for a given set of requirements, there can be various solutions, such as automated or not, outsourced or in-house, and so on.
In addition, for a given set of requirements and type of solution, there can be additional sub-options for the implementation approach, as discussed on page 72.
Comparing options
Once options are generated, the next step is to compare them on a common basis. To assist this comparison, guidance material for preparing business cases usually sets out information to be provided for each option, such as:27
- high-level benefits, objectives, costs and risks;
- functions performed;
- capacity to integrate with the existing system;
- potential constraints / limitations on the option;
- market's ability to deliver the required products or services;
- any critical organisational or business environment assumptions / impacts;
- high-level comparison to the status quo;
- high-level impacts on stakeholders; and
- expected performance over time for key performance indicators.
Generally, the project planning team will prepare comparisons of options. The opportunity for the project sponsor to contribute is mainly around providing guidance as to which options are most useful to explore.
26: It is usually most useful for decision-makers to consider a relatively small number of options. For significant projects, it is usual to provide an attachment discussing a larger number of options. These may be reviewed by advisers to the decision-makers.
27: Adapted from ICT Business Case Guide, Department of Finance and Deregulation.
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