Concept Approval and Business Case - Department of Treasury

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Strategic Asset Management FrameworkStandardThe advice in an ACA should be indicative, but provide a realistic appraisal of thescope, benefits, cost, risk and schedule parameters for the options.Because the purpose of an ACA is to provide an early appreciation, the advice isnot expected to be definitive. It is recognised that both the advice and thesupporting analysis will change, and be improved. However, the ACA should stillbe based on the best available information at the time that it is submitted.The ACA should be well considered, not rushed. It should reflect sound desktopanalysis conducted over some months rather than days. It should be objective,evidence-based, and free from unsubstantiated assertions. At this early stage, arange of information sources and benchmarks should be used, including:• lessons learned from similar investments as reported, for example, in progressreviews by the Office of the Auditor General; and• internet searches, enquiries to local and overseas suppliers and to publicservice agencies in Western Australia or other jurisdictions on the actualcapital and operating costs, and schedule, for a similar investment – whether itbe a vehicle, IT equipment, a refurbishment or remedial maintenance project,or a non-asset initiative.6Exposure Draft – December 2010
Concept Approval and Business CasePart Two: Business CasePurposeA business case should provide decision-makers with a robust appreciation of thebusiness objectives and benefits of an investment proposal, and the value formoney, scope, costs, risks, and schedule for the options that were supported inprinciple based on the ACA.The business case should provide a recommended option, and alternative optionsbased on an objective appraisal of their relative strengths and weaknesses. Itshould provide sound, total cost estimates for both capital and recurrent items,including the costs of operation over the asset’s life.The business case must be sustained and refined as an enduring point ofreference particularly for any project definition planning that may follow. It shouldalso provide a clear basis for progress and benefit realisation reports by agenciesthroughout the life of the investment. This allows judgements about thecontribution to service delivery, and how lessons learned can be incorporated intoplanning for similar proposals in future.ValueThe draft business case should record in concise terms the logic and assumptionsthat underpin an investment proposal. This should enable scrutiny and critique byreviewers, and focused questioning by decision-makers, with the deliberateintention of identifying flaws that should be addressed.As a result, the final business case should reflect decisions on the investmentparameters that have been set with confidence. Based on this clarity, the bestvalue for money option can be selected, any variations from the agreedparameters can be recognised easily, and the reasons and implicationsaddressed later in the PDP. By using this questioning approach, each businesscase should contribute to greater certainty for investment planning, prioritisation,implementation and reporting at the State and agency levels.Exposure Draft – December 2010 7
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Concept Approval and Business Case - Department of Treasury

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