Episode 3 - CAATS II Final Dissemination Event
BUSINESS CASE
Brussels, 13 & 14 Oct 2009
Ignacio Zozaya
Boeing Research & Technology Europe
CAATS II
Contents
•
•
•
•
Introduction
Business Case Definition
Business Case Pillars
Business Case Developments
Episode 3 - CAATS II Final Dissemination Event
 Good Practices
 Guidelines
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Brussels, 13 & 14 Oct 2009
Business Case (definition, guiding principles, why doing it?)
Business Case within SESAR
Business Case within E-OCVM
Business Case Overview of the R&D Lifecycle Phases
CAATS II Business Case Interaction Model
What are the 4 Key Phases of the Business Case?
Transition Criteria
2
Introduction
• R&D projects are not easily amenable for
performance measurement.
Episode 3 - CAATS II Final Dissemination Event
• R&D managers challenges:
 how to select the most appropriate projects from several
competing proposals;
 how best to evaluate a project during its execution;
 When to stop a project that is not performing as
expected
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Business Case
General definition
Episode 3 - CAATS II Final Dissemination Event
• A business case is a collaborative process involving a
multi-disciplinary team. It is targeted to the decision
makers in order to make strategic decisions (Eg.
investments) through their ownership and buy-in of the
business case outputs at each phase.
• The purpose of business case is to facilitate and support a
better informed decision-making for key investment
decisions.
• A Business Case is a structured proposal for business
improvement. It is also a material package for decisionmakers.
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Business Case
CAATS II Definition
• The CAATS II Business Case describes in a
structured way (Process) the business impact of
an ATM/R&D operational concepts.
Episode 3 - CAATS II Final Dissemination Event
 In order for the definition to be operational, it is
necessary to clarify the following:
- "structured" implies a step-by-step approach through the
lifecycle
- business impacts should be identified along with ways of
measuring them and the stages of the project lifecycle
should be clearly identified.
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Interaction
with
Other Cases
E-OCVM
Business
Good Practices
Alignment
with SESAR
Episode 3 - CAATS II Final Dissemination Event
Business Case CAATSII
Pillars
6
Work Plan
• Our Approach
Episode 3 - CAATS II Final Dissemination Event
 Identify and analyze the Business Good Practices to
assess operational concepts and projects for ATM R&D
industry in Europe.
 Make a “Business Case Guidance document” based on
expertise (selection of criteria and parameters).
 Integrate with E-OCVM and SESAR.
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What to expect to get from a
Business Case ?
• Presentation of possible options by assessing their potential
impacts from a multi-criteria perspective (incl. synergies
and trade-offs). It is an evidence-based instrument to
support planning and reporting.
Episode 3 - CAATS II Final Dissemination Event
• It Provides a substantiated argument for a project or
programme requiring a resource allocation of an investment
and therefore a financial commitment.
 The business case goes beyond a “cost benefit analysis”
 The Information provides criteria for the decision
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Good Practices
• Clarify the Business Case definition
• Develop Business Case collaboratively from the start “Transmit
credibility to Stakeholders and Decision Makers”
Episode 3 - CAATS II Final Dissemination Event
• Fully integration of the BC within the E-OCVM Validation “Get
things in Proportion”
• Use step-by-step improvement process through the lifecycle that
provides transparent and traceable results
• Base the Business Case on Benefit and Cost Mechanisms
• Use Decision Analysis Techniques
 Probabilities as the language for uncertainty
 Sensitivity Analysis / Risk Analysis
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Guiding Principles
• Transparency and Partnership
Development Process
with
a
Collaborative
 Involve stakeholders and multi-disciplinary experts is the best
way to ensure process ownership and final buy-in.
• Risk Management
Episode 3 - CAATS II Final Dissemination Event
 A Progressive and Iterative process to manage and reduce risk
and uncertainty.
• Consistency by
Business Cases
following
a
Common
Framework
for
 Follow a Standard Approach assessment contributing to a
consistent Decision Making.
• Proportionality of the Business Case Analysis
 Balanced approach between the cost of the Business Case
analysis and expected benefits “Value for Money”.
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Why doing a business case?
What are the benefits?
• Understand the economic and financial implications
(quantitative and qualitative) of an investment
• Ensure stakeholders involvement and buy-in
Episode 3 - CAATS II Final Dissemination Event
• Enable R&D to be focused on significant issues
• Ensure that different options are identified and properly
assessed
• Promote consistency between business case and other
assessments
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Who’s involved ?
• Who is involved in preparing/developing the Business Case?
Episode 3 - CAATS II Final Dissemination Event
 Business Case Group: People who are responsible for the
production of the Business Case and those that contribute to it
with their expert knowledge
 Stakeholder: Individuals and/or
directly or indirectly by the project
organizations
impacted
• Who eventually decides?
 Decision Makers: The individual, or group of individuals, that
ultimately makes the Go / No-Go decision for the project
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The Business Case
within E-OCVM
The Business Case supports key decisions at each life-cycle phase.
The decisions range from the selection among different potential
concepts to Go / No Go for deployment of a preferred alternative.
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•
•
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The Business Case
within E-OCVM
•
The V0’s Business Case Key Tasks




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•
Identify
Identify
Prepare
Prepare
ATM needs
the Stakeholders impacted
the baseline (starting/current situation)
the reference scenario as opposed to the solution scenarios
The V1’s Business Case Key Tasks











Monitor the Business Context
Identify potential benefits and describe benefits mechanism
Identify potential costs and describe costs mechanism
Identify potential double-accountings with other projects
Identify potential divergence of interest
Identify potential financial issues
Develop/Refine the baseline
Develop/Refine the Reference Scenario
Involve Key Stakeholders and Key Areas Experts in a collaborative process for
developing baseline, Reference Scenario, Benefits and Costs mechanisms
Start a qualitative assessment of the impacts (benefits and negative impacts)
elicited by the benefit mechanisms using
Start a Trade Off Analysis for the Alternatives/Options involving Stakeholders
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The Business Case
within E-OCVM
• The V2’s Business Case Key Tasks
Episode 3 - CAATS II Final Dissemination Event











Quantify benefits and costs
Analyse Affordability
Monetise benefits and costs in Economic Models
Develop influence diagrams and models for benefits and
costs mechanisms
Monitor potential double-accountings analysis
Monitor potential divergence of interest.
Confirm potential financial issues.
Finalise the baseline and the reference scenario.
Produce a trade-off analysis
Involve key stakeholders and assessment experts in a
collaborative development process
Produce sensitivity analyses
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The Business Case
within E-OCVM
•
The V3’s Business Case Key Tasks
 Analyse Decision Risks
 Undertake as required local Cost Benefit Analysis
 Refine as required Cost Benefit Analysis and Affordability
Analysis per stakeholder.
-
Episode 3 - CAATS II Final Dissemination Event
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Update data with new information.
Revisit Sensitivity Analyses and identify the most critical/sensitive
uncertainties.
Evaluate the risk profile (Probabilistic Risk Analysis)
 Monitor potential double-accountings analysis
 Monitor potential divergence of interest
 Confirm potential financial issues and propose financial
solutions.
 Produce a Trade-Off Analysis
 Involve Key Stakeholders and Key Areas Experts in a
collaborative making process for baseline, Reference
Scenario, Benefits and Costs mechanisms, Trade-Off Analysis,
SWOT Analysis.
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Business Case Overview of the
R&D Lifecycle Phases
Episode 3 - CAATS II Final Dissemination Event
Business Case Input Data in the R&D Lifecycle Phase
Input
V0-Needs
V1- Scope
V2- Feasibility
V3- Integration
›Baseline and Forecast
Data, including
economic data
›Performance Targets
›ATM Investment
Roadmap description
and Interdependencies
›Stakeholders Impacted
›Stakeholders Needs
and Issues
›V0 outputs
›Project Description
(Scope, Interdependencies,
Alternatives and Options,
etc.)
›Standard Inputs for Cost
Benefit Analysis
›Industry Inputs on Costs
›Stakeholders Needs and
Issues
›V1 outputs
›Alternatives/Options
full description
›Performance Influence
Diagrams
›Stakeholders Inputs
›Standard Inputs for
Cost Benefit Analysis
›Validation Results
›V2 outputs
›Local Inputs to Cost Benefit
Analysis (Representative
Stakeholders and Contexts
of Use)
›Validation Results
›Standard Inputs for Cost
Benefit Analysis
›Specific Inputs for Cost
Benefit Analysis
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Business Case Overview of the
R&D Lifecycle Phases
Business Case Output Data in the R&D Lifecycle Phase
Episode 3 - CAATS II Final Dissemination Event
V0- Needs
Output
Key Required
Deliverables:
›Framing the current and
Future Contexts from a
Business Perspective
›Economic and Financial
Performance Targets
›Planning/Organisation of
Business Case
Development
›Roles & Responsibilities
Desirable Deliverables:
›Baseline description
›Reference scenario
description
›Baseline description
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V1-Scope
V2-Feasibility
V3- Integration
Key Required Deliverables:
›Description of Cost &
Benefits Mechanisms (KPAs)
›Draft Description of Baseline
and Reference Scenarios
›Initial Business Case Report
Desirable Deliverables:
›Back of Envelope CBA
›Benefit and Cost Influence
Diagrams
›Detailed description of
baseline and Reference
Scenarios
Key Required
Deliverables:
›Cost Benefit Analysis
comparing different
alternatives
›SWOT Analysis
(Initial)
›Intermediate Business
Case Report
Desirable
Deliverables:
›Transition Issues
Identification
›First cut
Recommendations for
Deployment
Key Required
Deliverables:
›Trade-Off Analysis
›Detailed Cost Benefit
Analysis for the
selected Alternative
›SWOT Analysis
(Final)
›Final Business Case
Report for R&D
Desirable
Deliverables:
›Transition Issues
Identification
›Recommendations for
Deployment
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Caats II Business Case
Interaction Model
Stakeholders
•
The business case works in close
coordination
with
Safety,
Environment, Human Factors and
other considered key performance
areas and provide the umbrella for
an overall case integration.
•
The business case is not the sum of
the cases developed.
•
It consolidates the assessments
made in these areas, analyses
interdependencies and trade-offs
and based on these, provides
business
recommendations
to
decision-makers.
Other Cases
Episode 3 - CAATS II Final Dissemination Event
Safety
Case
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Business
Case
E- OCVM
Human Factors
Case
Environmental
Case
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What are the 4 Key Phases of
the Business Case ?
The detailed steps and how to roll out the full
process are described in the guidelines.
Episode 3 - CAATS II Final Dissemination Event
Scoping and
Planning
1
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Defining
Alternatives
Options
2
Analysis
3
Follow up
4
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4 Phases Contents
• Scoping and Planning (Including needs and Problem analysis)
 Scope and Boundaries
 Stakeholders (expectations & constraints)
• Defining Alternatives and Options (Against “Business as Usual”)
Episode 3 - CAATS II Final Dissemination Event
 Alternatives and Dependencies (Clarify with Decision Board)
 Criteria
 Benefit and Cost Mechanisms
• Analysis (Evaluation of Impacts and Comparison of Options
recommendations)
 Assessment
 Consolidation
• Follow up (Monitoring and learning through continuous
improvement)
 Business Case Deliverables review and presentation
 Measurement of performance and lesson learnt
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Uncertainty – good practice?
• Uncertainty is a consequence of our incomplete
knowledge of the world
Episode 3 - CAATS II Final Dissemination Event
• To deal with uncertainty we use ranges and
probabilities
• Probability is the quantitative
communication about uncertainty
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language
for
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Episode 3 - CAATS II Final Dissemination Event
Annexes
• Example Of Cost Categories in ATM Project
• ATM Performance And Examples Of KPA Influence
Diagrams
• Business Case Methods And Techniques
• Business Case Metrics
• Business Case Transition Criteria
• Example of the Business Case Relationships with
other Cases
• Proposed Typical Business Case Report
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Questions?
Backup Slides
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SESAR
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The Business Case and the E-OCVM
Structure Planning Framework
Review
information
from Sub
Steps
Episode 3 - CAATS II Final Dissemination Event
E-OCVM interactions with the Business Case
ATM Needs
Scope
Feasibility
Integration
V0
V1
V2
V3
 Capture Data from
E-OCVM Sub
Steps : 0.1- 0.2
 Capture Data from EOCVM Sub Steps: 0.10.2- 1.1-1.2-1.3-1.42.1-2.4-2.5-3.1-4.3-5.1
 Capture Data from EOCVM Sub Steps: 0.10.2- 1.1-1.2-1.3-1.4-2.12.4-2.5- 3.1-3.2-4.1-4.24.3-5.1
 Capture Data from EOCVM Sub Steps: : 0.10.2- 1.1-1.2-2.4-2.5- 3.13.2-4.1-4.2-4.3-5.1
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