Business case model

The business case is an integral part of the cross-governmental ICT project model and programme model. The business case helps answer the question "Is the project a good investment?"

A business case is a calculation of the overall economic consequences of a potential investment in a project or programme. It is based on an analysis and a statement of the change desired and how to achieve it.

The objective of the business case is to clarify and calculate costs and benefits as well as to estimate the economic consequences of potential risks. On this basis, a solid foundation can be established for assessing the economic justification of the project or the programme.

The governmental business case model

The business case model consists of two scenarios: one in which the project or the programme is implemented (scenario 1) and one in which it is not (scenario 0). The benefits of the project or the programme are calculated by comparing the differing scenarios.

This model shows three different boxes. The first box presents operating costs of the present situation. The second box is about project costs. It is shown that project costs needs to be risk adjusted. It is also shown that the difference, between these two project costs, is the risk pool. The third and final box, displays Scenario 0 and Scenario 1. It shows that, Scenario 0 consists of the future operations without the project. Scenario 1 consists of future operations with the project. The difference between the two scenarios is the gross benefits.

Risk and uncertainty

There is always an element of uncertainty when estimating the costs of a business case. Estimating an unknown cost, that is sure to materialize, is categorized as an uncertainty. The business case operates with an interval within which the costs will appear. This is done using three-point estimation. Estimating a cost, that may or may not materialize is classified as a risk. The business case ensures that funds are set aside in a risk pool.

Quality assessment of the business case

The guide to the governmental business case model contains guidance on how to employ the model correctly. In addition, the Inter-ministerial Project Office offers to do a quality assessment of the business case and project brief for ICT projects before these documents are submitted to the Danish Council for ICT Projects for risk assessment.