3c. Business Case in Detail

ACT//DO//DESIGN&DELIVER

The Business Case in Detail

This section of The AmbITion Approach helps you to construct a detailed Business Case, acting as a guide to completing a Business Case Outline.

To accompany this section take a look at the pro forma outline we've created to creating your business case document: Business Case Outline. You might also find it useful to construct a fresh Business Model Canvas with the ideas you have decided to develop.
The Opportunity

If you are developing a business case it is because you are already well-advanced in your thinking around the need to develop digitally. More than likely, you have an opportunity. This could be one or more of the following :-

  • a funding opportunity
  • a particular milestone (e.g. a festival in your town)
  • the board or trustees has made funds available
  • a particular need (e.g. moving to a new building)
  • change of circumstances (e.g. a new chief executive)
  • as part of a regular review of your ongoing “business plan”
  • Does the digital development programme/project need a name? Would it help you to embed it in your organisation if you branded it, to establish it in people’s minds? Do you need to officially lodge it in company documentation as a project (or production if your organisation works in this way?)


    What are you Going to Do?

    Through your audit and diagnosis of needs you will have identified the key areas that you want to develop digitally. These may include one or more pieces of work.

    For instance, you may have decided that it is a priority to develop a new website. We will use this as a simple example throughout the following sections.

    Developing a new website might be what you are going to do but the business case will help you justify your decisions. It might be that through developing a new website you also identify that you need better networking or computers, or that staff need training. In other words, you might want to include several different work packages within your business case.

    WWWWWH Elevator Pitch: can you sum up what you are going to do as an elevator pitch? Think of snappy answers to the What? Who (for)? Why? When? Where? How? questions, pull them together in a pitch that’s less than 90 seconds long, and there’s your pitch!


    The Benefits

    Key to any business case are the benefits. After all, you have already put a lot of work in to deciding what it is your organisation needs, and you will need to justify the project to funders and other stakeholders. This is where you need to define what is the value proposition, or offer, of your digital development. If you’ve already done some prototyping and testing, then you know that your customers will accept the offer, and this makes it more feasible. Make sure you share the results of any prototyping or testing.

    Benefits can be many and varied, and will depend on the sort of organisation you are, and on the nature of your project.

    If we go back to the four categories we identified in the diagnosis section of the AmbITion approach we can see how there might be a range of benefits, that are both “hard” (e.g. saving money, or increasing revenue) and “soft” (e.g. improving reputation, artistic quality).

    Whereas an airline or a supermarket might be primarily interested in the “bottom line”, the stakeholders for the arts will include funders, artists, staff and audience, and you may be wanting to achieve a range of different benefits (social, cultural, environmental – as well as economic).

    Let’s have a look at this simple table. For each of the types of project we have identified an example benefit.

    TYPE OF PROJECT BENEFITS
    Organisational More efficient systems providing staff with more time to work on developing the artistic programme of the organisation.
    Product/service/experience An improved programme which will enhance the profile of the organisation and lead to more funding opportunities.
    Customer Development Widening participation so that more local people are able to access our services – increasing revenue, and proving our worth to stakeholders.
    Business Development Developing new revenue opportunities through new income streams, leading to increased turnover.

    The “benefits” listed here are generic, as are the types of project. Something like a new website may primarily fit into the “customer development” category, however a good business case will identify all the benefits.

    Developing a new website

    Organisational benefits – the website will have a content management system which will allow staff to be able to regularly update the website with new content, rather than having to contact the web developer.

    Product/service/experience – there will be opportunities on the new website to showcase the work of local artists who are appearing at our venue, and this will allow us to enhance our role in developing trade in the local community.

    Customer Development – our current website doesn’t allow people to sign up for a newsletter or receive regular updates on our work. The new website will make it easy to contact our mailing list about new shows as soon as they are announced.

    Business Development – Currently our customers primarily contact us via the venue, which is only open Monday 9-5, but the new website will have an online ticketing system, leading to increased sales.

    Some funders, investors or even boards may prefer to see this kind of benefit analysis as a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats listed in a 2 x 2 matrix – here’s an example template).

     

    Options Summary

    Most business cases will include an options summary. This is a short paragraph that explains, not what you are asking to do, but why you chose this option rather than any others.

    One of the options should always be “Do nothing!” – this option may appear to be risk free, yet for most projects, particularly digital ones, “do nothing” is the easiest one to reject. “Do nothing” may mean that you fall behind your competitors, or start losing audience, or fail to develop in line with the expectations of your audience.

    The options summary can be simple and straightforward, or more complex. If it’s a large project (such as moving to a new premises) the options will probably all have been looked at and costed out. (e.g. refurbishment, co-occupation with another organisation etc.).

    In digital developments the options summary should explain why you have chosen the particular route.

    For a web development the options might be straightforward :-

  • Do nothing!
  • Redevelop existing website with current developer
  • Appoint a web developer to develop the website in-house
  • Design and specify a new website


  • You are not just comparing the costs of the various options, but the benefits that each option offers.

    Budget Requirements

    The budget is an important part of any business case. If you are applying for a grant you may be asked to provide a detailed budget. At some point in developing a business case you are going to need to find out how much the work is going to cost. Can you calculate costs and revenues? What’s the potential profit therefore? Run some financial scenarios based on different assumptions.

    You might want to think of the following :-

  • salaries;
  • consultancy/project management support;
  • specialist skills;
  • marketing & publicity;
  • technology (hardware & software);
  • training;
  • overhead; and
  • contingency.


  • A well-argued business case should include a budget that is as accurate as you can make it. Obviously there are constraints on funding for arts organisations, however, providing a reasonably accurate cost of a project will enable stakeholders and funders to weigh the benefits against the costs.

    The aim of the AmbITion Approach is to ensure that you are able to justify both the time and the investment in a digital development. In the past too many digital developments have taken place either because the funding was available or because “everyone is doing it”.

    Going back to our website example, one organisation might be able to justify a £20,000 spend on a website, for instance, if it allows them to sell tickets online, whereas another organisation might be better having a smaller web budget, and spending the additional money on creating digital content for the web.

    Resource Requirements

    By the time you have identified the budget and are looking at the resource requirements of a project your business case is quite highly developed.

    What about ongoing resource requirements? A digital development may require ongoing digital technology resource – hosting, cloud services, security, back-up, data management, support services. Will costs rise as the digital development gets older/more successful (will you accrue more data which will need safely hosting? Need more processing capacity?)? Factor these costs in.

    Resource requirements may include staff time and availability, but may also include timescales and milestones. By thinking of the resources at this stage you will have shown that you have considered the impact on your organisation, which brings us to “risks.”

    Risks

    Traditional project management techniques talk of “risk” and “issues.” An issue is something that arises during the course of a project, a risk is something that should be included in your business case, that you have already identified.

    You shouldn’t be scared of identifying risks. The whole point of thinking of the risks on a project is so that when issues occur, you have already thought about an action plan, that will not derail the project. When you develop your business case it is good practice to identify the risks to the project across broad categories:

    Budget – this is an ambitious project for which we require the budget asked for. Because this budget comes from 2 different sources, if one or the other is not forthcoming then the project is at risk.

    Time – the project needs to be completed in a particular timescale. Any delays in starting the project will impact on the delivery.

    People – the need to hire (or keep) key staff is vital to the project.

    Technology – the technology needs of the project should be appropriate for delivering the activity. If new technology comes in during the project we will need to reconsider the options.

    Develop a standard risk matrix for projects – that can be easily adapted for any new projects. You might want to think about creating a PESTLE analysis of risks external to your organisation. Note what Political, Economic, Social, Technological, Legal and Environmental factors or changes could happen, and what impact they might have. Also, refer back to your SWOT analysis. Note all the risks emerging from these analyses. Are the impacts of the risks high, medium, or low? Are they short-, mid- or long-term? Are they highly likely, somewhat likely, or unlikely? How can you mitigate the risks?

     

    What’s Next

    All being well, your business case will form the basis of your funding application or be agreed by your board. Once you have the go ahead you can begin your implementation.

    The business case itself should then form the basis of your implementation planning and work programme. Remember, as well, that external funders are likely to return to your business case to ensure that you’ve delivered the project that was agreed. You should review your business case at key stages of the implementation to ensure that not only is the work on track, but that the benefits you identified are still relevant.