Outline Business Case (OBC) 

The Outline Business Case (OBC) aims to evaluate and identify the preferred option for delivery of the project, considering affordability and public value. Using the Five Case Model, the OBC revisits the strategic, economic, commercial, financial, and management aspects of the shortlisted options. After the OBC, the project moves to the procurement phase.

The purpose of the OBC is to revisit the options identified in the Strategic Outline Case (SOC) to identify the option that optimises public value (‘the preferred option’) following more detailed appraisal, and to set out the possible deal while confirming affordability and putting in place the management arrangements for the successful delivery of the project.

The ownership of the OBC should reside with the public sector organisation, which should appoint a Senior Responsible Owner (SRO) for the project. This should be an individual from within the organisation that has sufficient influence to be able to drive the project forward at different levels of the organisation, including at board level.

Developing an OBC can be challenging for a public sector organisation under pressure. It requires considerable time, capacity, and expertise across a range of areas including technical, procurement, legal, and finance. External consultants may be of invaluable assistance and their use (across all five elements) should be considered where the necessary skills and resources are not available in-house.

Experience demonstrates that an OBC is best developed through a number of workshops, involving key stakeholders, at critical phases of a project's development. This can facilitate the collation of information and add immeasurably to the robustness of the case and, consequently, to the approval and successful delivery of the project. The number of workshops required will depend on the complexity of the project and resources available to deploy. Green boxes within the guidance propose potential workshop activities that may facilitate the collation of information required.

Once the OBC has been completed, senior management should be in a position to consent to the procurement phase of the project.

• Confirm the case for change and record any material changes in the opening section to the strategic case in the OBC.

• Revisit and refine the efficacy of the preferred way forward and other options in the shortlist, because more detailed information of the associated inputs, outputs, and activities will be required for preparing the economic appraisals.
• Calculate the discounted costs and benefits for the shortlisted options and record the discounted values and benefit/cost ratios (BCRs) for each option.
• Undertake an appraisal of the quantifiable and qualitative benefits and explain why these are important enough to affect the decision for the ranking of the options. The main aim is to identify benefits that are quantifiable and can be expressed in monetary equivalent terms, and to avoid defining benefits that cannot be measured, assessed, or evaluated in any realistic way because there is no established evidence base.
• Identify and quantify the risks associated with the options contained in the economic appraisals for the project’s shortlisted options.
• Selecting the preferred option should be reasonably straightforward in the decision-making process if the required analysis has been rigorously undertaken.
• Determine the procurement strategy and possible procurement routes for the project’s key outputs and activities.
• Identify the project’s service streams and required outputs and the scope and content of the potential deal to be made with public and private sector service providers.
• Identify how the service risks in the design, build, funding, and operational (DBFO) phases of the project may be apportioned between the public and private sectors.
• Identify how the project intends to pay for its key services and outputs over the expected lifespan of the contract(s).
• Outline the contractual arrangements for the project, including the use of a particular contract, the key contractual issues and its accountancy treatment, and personnel implications.
• Prepare financial model and the financial appraisal.
• Put in place the strategy, framework and plans for successful project delivery using a proven methodology for guiding investments through a controlled, well-managed, and visible set of activities to achieve the desired results and benefits.
• Put in place the strategy, framework, and plans required for managing change.
• Put in place the management arrangements required to ensure that the project delivers its anticipated benefits.
• Put in place arrangements for managing and mitigating risks during the key phases of the project.
• Put in place the necessary arrangements for project assurance, monitoring, and evaluation.

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