Writing your business case proposal
Your proposal should outline the costs and benefits of the project clearly and succinctly. Ensure it contains sufficient detail to satisfy management needs.
If your project requires funding or management approval you will need to prepare a written business case. Most companies have a formal approvals process with a template that needs to be completed by the project manager. Prepare a draft and have it reviewed by staff members who can provide a fresh perspective. This will ensure your case is as strong as it can be.
Although the content and length of a business case proposal will vary according to the scope and complexity of your project, there are usually some common elements. These are listed in the diagram below and then described in the rest of this section.
Clearly state your value proposition upfront
Your proposal should commence with a concise summary of your project. This might include information on:
- what your project aims to do
- key financial and other benefits including payback period or NPV
- funding and resources you are asking for
- links between your project and existing business priorities.
In some cases it may be appropriate to mention potential project risks and how they will be managed—for example, if you know that the person considering your proposal has a particular concern.
Briefly describe the way you have developed your business case proposal
Briefly describe the process you have followed in developing the proposal and mention the name and title of anyone who had input. For example, it might have been developed with the assistance of external expertise or key internal stakeholders, such as the operations or finance manager. For highly technical projects, you could include an appendix describing the experience of key internal or external experts. If the project has been reviewed progressively at management level then it will be useful to mention this as well.
This information will show that the project has internal support and give the decision-maker more confidence in the proposal.
Describe technical changes and relevant planning issues
Explain the technical changes that are required for implementation of the project. Include a brief timetable as well as a description of who will manage the project and how. Include information about how your project will be monitored and how that information will be reported internally and externally. Planning issues might include timing implementation of the project to align with major events such as formal shutdowns or to correspond with leasing changes in a commercial building.
List and describe all key costs and benefits
Briefly describe the costs and benefits of your project. Include key financial and other measures and state your assumptions clearly. You could do this in a table and/or include graphs and figures if these enhance your message.
The level of detail required will vary, but make sure you have either included all relevant data in appendices, or provide a link to where they may be found on your organisation’s intranet.
Ensure the level of accuracy of your data is appropriate to the type of investment required. In some cases you may want to use externally verified data to add weight and credibility to the proposal.
Remember to always be mindful of key benefits that contribute to business improvement such as performance, process control, safety, risk management, compliance, corporate reputation, social responsibility and cost savings.
For further information, refer to Describe and quantify all business costs and benefits.
Mention key project risks and how you will manage them
As you compiled the data and supporting information for your business case proposal you will have identified any potential concerns of decision-makers. In your business case it is important to clearly describe these and how they will be managed, in a table for example. In some cases it may be sufficient to clearly state that you have developed your proposal in accordance with internal risk management and other procedures.
Describe the funding/support you are seeking
You should clearly state the funding source that you are aiming for, e.g. operational funds, capital budget or external funds.
It may be appropriate to mention other potential funding sources in case your proposal is unsuccessful or to strengthen the financial case for the project. Some government grants need you to obtain internal funding approval first before you can formally apply for them. This should be clearly explained in your proposal.
If you are after ‘support’ rather than funding, be clear about what you would like the decision-manager to approve, what they need to do and what actions others will need to take.
Tips – Writing your proposal
- Use a concise, clear format.
- Be factual and to the point.
- Write with a sense of urgency.
- Use statistics and external, verified data to add weight and credibility to the proposal, while ensuring all information is relevant.
- If you use graphs and diagrams ensure they are clear and easy to interpret.
- Include other types of information if it will support your case, e.g. case studies or scenarios; benchmarking information comparing sites or competitors; interests of external stakeholders such as the community, customers and investors.
Example of a business case proposal
The following example is intended to highlight some of the key features that you may include in your written business case proposal. It is acknowledged that the content and length of a business case proposal will vary widely depending upon the scope and complexity of a particular project.
Waste Heat Recovery Project – Proposal summary (value proposition)
The engineering team is seeking $90 000 to reconfigure the steam system in order to recover waste heat and reuse it in the pasteuriser. The project is estimated to deliver a benefit of $45 000 per year through reduced energy costs and improved process reliability. Safety and operator comfort will also be enhanced as improvements will be made to the lagging on steam pipes.The financial benefit is estimated as a simple payback of two years and the project will make a significant contribution to achieving the site’s energy intensity target for 2012 (Figure 1).
The operations team have confirmed the project can be implemented during the annual site shutdown in November 2011.
This proposal has been developed by the Energy Management Team (EMT) at the Fair Dinkum Milk Company site. The EMT developed the business case proposal with the involvement of the equipment supplier Flavourtech (brand) and the energy services provider Eservices. The EMT has reported progress and sought advice from the site management team on two occasions (May and December 2010).
Technical changes required
Total cream processing at The Fair Dinkum Milk Company site is 175 000 m3 per annum. The cream is pasteurised and treated using a Flavourtech (brand) system.
The Flavourtech condensor operates at -20 kPa Gauge, equivalent to 94 °C. The Flavourtech supplier has indicated that an additional coil could be added to the condensor to recover high temperature heat.
This coil would heat 50 m3/hr of hot water from 84−88 °C by condensing vapour at 94 °C. The coil would recover 241 kW of heat and would need to be made from stainless steel. The recovered heat would then be used for pasteurisation.
It is intended that these changes would be made during the scheduled shutdown in November 2011. In order to meet that timeframe, approval of this business case proposal is required by May 25, 2011.
- Submitted 1 May
- Approval required by 25 May
- Detailed engineering planning completed, 31 August
- Project implemented during shutdown, 1−5 November
- Project savings evaluated for reporting, February
Cost benefit analysis
|Costs||Value||Assumptions and accuracy|
|Purchase and installation of additional heat recovery coil.||$40,000||Fixed price quote from Flavourtech received.|
|Piping, lagging & controls.||$50,000||EServices estimate (±10% accuracy).|
Financial and other benefits
|Costs||Value||Assumptions and accuracy|
|Energy||– $36,000/annum*||High-pressure steam consumption on heat exchanger CR2 will decrease from 0.55t/h to 0.17 t/h. At the site’s variable steam cost of $20 tonne this will save $36,000. Cooling tower load will decrease from 1233kW to 992kW, which at $2/MWh is valued at $2,000 per year. Calculated at ±20% accuracy.|
|Improved process reliability.||-$9,000||In the last 6 months there were two boiler shutdowns due to peak loads on the boiler. The reduced requirement for high-pressure steam is expected to reduce boiler breakdowns.|
|Safety||Estimated as $7,000||There have been 2 incidents in the past 6 months in which operators have received burns due to the location of the pipes and limited lagging in the cream processing area. In both cases the operators were off work for 3 days.|
|Operator comfort||Not included in this estimate||The operating temperature has been logged as a potential safety risk 3 times in the last 12 months.|
|Reputation||Not included in this estimate||Fair Dinkum Milk Company has publicly committed to a 10% reduction in energy intensity by 2012. This project will help to ensure the target is achieved.|
*Based on current energy prices. The current three-year contract expires in eight months, after which the price of energy is estimated to rise by 20%. This forward value has not been included in the calculations.
Total costs = $90 000
Quantifiable benefits = $52 000
Approximate simple payback on the project is 1.7 years without inclusion of co-benefits such as operator comfort and reputation.
A risk assessment has been conducted in accordance with internal procedures. A summary of key risks and how they will be managed is described below.
|Safety during installation.||Standard operating procedures will be followed.|
|Impact on production.||The works will be conducted during the annual plant shutdown.Similar works have been implemented by Flavourtech in over 30 plants globally. They are familiar with the process and have had no problems in the past 10 installations.|
|Savings not achieved.||Based on the Flavourtech experience there is a high level of certainty that the savings will be achieved. The financial saving is likely to be higher after year 1 due to forecast increases in electricity prices.|
Following project approval (by May 25) the project team will confirm that the project is scheduled for implementation during the planned shutdown period and commence detailed planning.
Attach engineering diagrams and detailed costings including all assumptions.