Consult Australia warns against reverse justifying business cases

Consult Australia warns developers against 'reverse justifying' business cases

Developers who fixate on delivering a project a certain way risk losing perspective of the project's purpose, resulting in a loss of value.

In a report on best practice business cases released today by Consult Australia, developers are warned not to use business cases as a means of justifying their vision for a project. Instead, cases should act as a mechanism to inform decision-making processes for infrastructure investments. Business cases are being 'reverse justified', says new report.

In scenarios where business cases are designed to advocate for a pre-conceived outcome, momentum bias often obscures project pitfalls, says Consult Australia Chief Executive Nicola Grayson.

“A business case justifying how a project can be delivered, rather than what project is required, can result in a business case that advocates an investment decision that does not represent good value for money.”

Grayson says that fear of failure drives desire to 'reverse justify' a project. To overcome this concern, she says vested parties must redefine how they think of failure.

“In some circumstances a “no go” decision can be the most appropriate response based on the problem identification and should not be considered a failure. The development of a business case is a process, and re-visiting the original assumptions throughout the process is good practice.”

The report lists ten critical success factors to consider in the delivery of a successful business case. They are:

Strong procurement and management - It is normal for elements of a business case to be handled by relevant teams (engineering, social impact evaluation etc.) before being compiled into a single product. Such division makes coordination and management of the case difficult for project sponsors. By approaching the business case as a single, unified product from the outset, the importance of sharing and communication becomes clear, and robust discussion becomes a cornerstone of the project. This way the goal remains clear to all.
Early and continued engagement with senior project sponsors in government - Not only does this help streamline the approval process, but by working closely with those who will support the business case as funding is sought for it, the risk of substantial rework and budget blowout are reduced.
Clear defined scope of each supporting consultant - As more consultants are attached to the project, the potential for scope gap increases. By making sure the scope and responsibilities are clearly defined from the outset, this gap is closed.
Confirm the story to obtain team buy-in - To ensure the business case has the greatest investment potential, its message must be clear, concise and consistent. Project managers can establish a framework around which each element of the case is built so that it fits easily into the greater whole.
Set budgets and delivery timeframes - In cases where budgets are established in advance of project scope, limitations may arise that clash with the expectations of decision makers. It's an issue made worse when deadlines are set around external concerns, such as an electoral cycle. Established lead times must be sufficient enough to provide for these considerations.
Sufficient Options Analysis - A Sufficient Options Analysis is designed to consider all possible solutions to issues that may arise throughout the project. Understandably, that means it should be completed early in the process so that the project remains on track no matter what challenges appear.
Reassessing the need - Technical and logistical considerations change on a daily basis and a global scale. Despite the best of planning, these external factors can result in a project's needs changing overnight. Rather than seeing a business case made redundant by such change as a loss or, worse, pushing on regardless, the needs the project was designed to meet should be reassessed and the case adopted as possible.
Peer review - Peer reviews are intense for anyone involved in the process, but they are ultimately designed to provide the best possible value to a project. As mentioned earlier, by commissioning a peer review early in the project's lifespan rather than at the end of each workstream, it is less likely to be disrupted.
Proactive management of data - Data is one of the most valuable tools a developer can draw upon to make an argument for a project. As such, proactive management of data is crucial, so that it may be retrieved at any time throughout a project.
Inquiry-based approach - It may be the last point, but it is perhaps the most important. Rather than setting out to tick a box, developers should take an inquiry-based approach when start a project. Posing questions, raising problems, discussing potential scenarios; these are far more important when it comes to delivering valuable results than a singular approach could ever be.

To read the full Business Cases in Australia report, click here.