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NEW Government Business Case Guide

NEW Government Business Case Guide. Kitty Choi Head, Efficiency Unit. 30 May 2008. What is this?. Magazine Ads. Product Information and Advertisements. Mobile Download. Real-time Information / Travel Information. Food Safety. Mobile Ticketing. What a Business Case is NO T?.

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NEW Government Business Case Guide

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  1. NEW Government Business Case Guide Kitty ChoiHead, Efficiency Unit 30 May 2008

  2. What is this?

  3. Magazine Ads

  4. Product Information and Advertisements

  5. Mobile Download

  6. Real-time Information / Travel Information

  7. Food Safety

  8. Mobile Ticketing

  9. What a Business Case is NOT? • commercial viability • something which makes commercial sense • one size fits all • mechanical process • need to follow every step in the process map • Business Case

  10. So, what is a Business Case?

  11. What is a Business Case? • High level analysis • Why and whether • From a business (not solely commercial) point of view • Mainly covers non-works and non-ICT projects Facilitate informed decision making

  12. Government Business Case “What are the financial and business (including social) consequences or benefits if we pursue a particular course of action?” ? “A Government Business Case is a detailed and structured proposal for improvement, justified in terms of costs, benefits and risks, for changing the way that a particular aspect of Government business is conducted.” A detailed structured costs benefits risks

  13. A Business Case is … • a justification of the case for change (or status quo) • a description of the purposes and objectives • a documentation of the planning assumptions and constraints • a description of the options plus evaluation • a strategy for managing risks • an implementation plan • a description of the project consequences • a benchmark against which project success is measured

  14. Why should we be concerned?

  15. How do we conduct a Business Case Study?

  16. Key Elements of a Business Case

  17. Conduct Gap Analysis

  18. MOSCOW Analysis

  19. Options Generation - 5 categories of options Scoping Options (in terms of coverage) Service Solution Options Service Delivery Options Implementation Options Funding Options Options Selection and Evaluation Public Sector Business Cases using the Five Case Model - A Toolkit UK HM Treasury

  20. Options Selection and Evaluation

  21. Benefits Evaluation Options Selection and Evaluation

  22. Net Present Value A standard method for the financial appraisal for long-term projects. It measures the excess or shortfall of cash in present value terms. The present value is arrived at by applying a discount rate to each future cashflow. Financial Benefits

  23. Ways to obtain WTP/WTA Questionnaire Surveys Interviews Focus Groups Willingness to Pay (WTP) / Willingness to Accept (WTA) WTP/WTA generally refers to the value of a good to a person as what they are willing to pay, sacrifice or exchange for it. It is the maximum monetary amount that an individual would pay to obtain a good. It is a common method to value non-financial benefits Non-Financial Benefits

  24. Beware of Optimism Bias Peer review may be necessary Risk Analysis – prudent to develop a risk register and risk management plan Options Selection and Evaluation

  25. Options Selection and Evaluation • Selection of the Preferred Option • We recommend a holistic approach which takes account of various evaluation areas, including - • cost and financial benefits • non-financial benefits • strengths and weaknesses • risk analysis • sensitivity analysis

  26. Public Engagement Right from the beginning even before policy formulation Risk Management Ongoing activity throughout the project cycle Post Implementation Review Completion of the delivery project does not represent the end of the project per se Implementation Planning

  27. Case Studies

  28. The project Improve sports facilities to attract international events to HK Provide enhanced facilities for the use of local based sports associations and hosting of large scale entertainment events Improving Sporting Facilities to Attract International Events

  29. Strategic overview Government’s Sports Policy to become a major event venue Compete with other countries Constrained use of Hong Kong Stadium at Causeway Bay Project objective To improve existing sports facilities or develop new ones to attract international sports events Desired future service provision A suitably designed, equipped and managed stadium complex Analysis of Requirements

  30. Gap Analysis and Prioritisation Analysis of Requirements

  31. Evaluation criteria The design must deliver the forecast major uses of the complex Land must be available for single site development Options identification Options Selection and Evaluation Improve Sports Facilities of HK Existing HK Stadium Build New Multi Use Sports and Entertainment Complex (MUSEC) (A) Do nothing (C) Supplement HK Stadium (D) Build on HK Island (F) Build in West Kowloon (B) Rebuild HK Stadium (E) Build in East Kowloon

  32. Initial evaluation and consolidation Shortlisted options Build MUSEC in East Kowloon or West Kowloon Options Selection and Evaluation * Main Stadium, Secondary Stadium, Track & Field Facilities, Indoor Arena with swimming facilities

  33. Detailed options analysis Options Selection and Evaluation

  34. Overview of ICC Aim to offer a faster, more efficient and simpler service to replace hotlines in different Government departments Launched in July 2001 Provides 24 hour one-stop service to handle all enquiries and complaints for 20 departments Multi-channels of Contact – Telephone, Letter, Fax, Internet and Email Provision of an Integrated Call Centre

  35. Strategic overview Currently a pilot project mainly staffed by NCSC staff Well-recognised by both citizens and departments Service-wide cap on number of NCSC positions Cannot take on new services or departments (considerable demand exists) Project objective To develop a sustainable service delivery model for the ICC that enables growth and development to meet demand Service requirement Service levels no worse than existing ones Analysis of Requirements

  36. Evaluation criteria New service delivery model must be practical, cost-effective, and allow growth and development Options identification Options Selection and Evaluation A sustainable ICC Alternative delivery model Do nothing Corporatisation Outsourcing Trading fund

  37. Initial evaluation and consolidation Shortlisted options Outsourcing and corporatisation Options Selection and Evaluation

  38. Detailed options analysis Options Selection and Evaluation

  39. Provision of a Central Poultry Slaughtering House

  40. Strategic overview Government policy: protect public health while meeting consumer demand Live chickens being sold to consumers at wet markets Direct contact with live chickens pose health risks to the public Project objective To develop a central poultry slaughtering house that completely segregates consumers from live poultry Service requirement To provide a wider range of slaughtering and value-added services Analysis of Requirements

  41. Evaluation criteria New service delivery model must achieve cost effectiveness bring improved management and enhanced services Options Selection and Evaluation

  42. Options identification Options Selection and Evaluation A sustainable slaughtering house Design and Build contract (conventional model) Alternative delivery model Operations and Maintenance Contract Concession Build, Own, Operate and Transfer (BOOT)

  43. Initial evaluation and consolidation Shortlisted options Concession and BOOT Options Selection and Evaluation

  44. Detailed options analysis Options Selection and Evaluation

  45. Further Training • One-day Training Programmes (5 classes) on Government Business Case Development to be held from June to July • Target Participants – Senior managers and departmental professional staff who are involved in the development of Business Cases, or need to manage Business Case studies conducted by consultants

  46. The EU stands to help Contact us Help desk: 2165 7255 E-mail: euwm@eu.gov.hk Website: http://www.eu.gov.hk

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