In the latest instalment of our Business Case series, we focus on the steps needed to critically assess a long list of options and develop a robust shortlist for appraisal.
Often, the approach to creating a Business Case begins with the assumption, "We know what we want to do, and everyone thinks it’s a great idea." However, it's essential to consider a wide range of options and thoroughly evaluate their various aspects to form a well-supported and robust shortlist for appraisal.
This rigorous process ensures you can evidence to funders or approvers that the chosen course of action is the most viable - and not just a pet project!
But how do you effectively narrow down a long list into a concise shortlist? Read on for a detailed guide on this process.
First of all, you need to:
Agree your critical success factors and spending objectives
Determine a long list of options and appraise these against the above, using the long list options framework.
The Long List Options Framework and Approach
In order to develop a robust Economic Case for any scheme, you need to explore the Preferred Way Forward, which means you need to identify and appraise all of the various options for the project and recommend the option that is most likely to offer best value for money, including wider social and environmental effects, as well as economic value.
A range of options against each dimension should then be considered and assessed against the various spending objectives and critical success factors, noting the advantages and disadvantages of each.
Having critically appraised the five dimensions (scope, service solution, service delivery, service implementation and funding) of the Long List Options Framework, assessing whether they should be carried forward or discounted, and which is your preferred way forward, should enable you to determine a configuration for your Preferred Option, together with a small number of other options to create your short list.
This can then be assessed, in detail, for costs (capital and revenue), benefits and risks in order to determine your Value for Money Preferred Option.
This Options Framework can be a critical tool in determining a robust set of short-listed options, providing you with a framework to assess the long list, and provide evidence of the thought process and help support engagement and discussions with wider stakeholders.
Following this approach allows you to recommend your Preferred Way Forward which is then included, together with other viable options, to create your short list for assessment. The short list is then appraised in detail (costs, risks and benefits) enabling you to determine the Preferred Option, being the optimum mix of costs, risks and benefits - the Value for Money option - more on this in week #9!
The long list appraisal process is invaluable for ensuring a thorough assessment of all available options within a logical framework. It encourages critical thinking about each aspect of the options and serves as a way to share your thought process, not only with approvers, but also with your broader stakeholder group, helping to align everyone and get them all on the same page.
Additionally, since this process can be time-consuming, a documented long list is essential for retaining corporate memory during organisational changes. It allows the list to be revisited as projects evolve, avoiding the need to start from scratch.
✏️ Top Tip: Remember – it helps to show your workings, it isn’t just a case of “we want to build a new facility because we want to…” it has a detailed, rational argument, applying critical thinking with the evidence to show it!
⭐Success Story: Crawley Hospital, Child Development Centre
An example of this was the Crawley Hospital Child Development Centre, where the local health system had long recognised that current accommodation for Child Development Services was no longer suitable, which together with the substantial increase in the demand for services meant that plans to develop an alternative facility were required.
The gbp team supported the client to develop and assess the long list options framework, prepare both the Outline and Full Business cases for NHSE approval, and support the client throughout the process, which took several years and multiple assessments of the various long to short list options. As a result, this project has finally delivered a fully reconfigured floor of the Yellow wing of Crawley hospital, providing dedicated, modern, right sized and fit for purpose accommodation for the service, allowing them to provide integrated services to more of the local population, reducing both waiting times and multiple/duplicated appointments.
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Arrange a conversation with our expert Business Case Team. Contact Ian Sabini, Managing Consultant on: ian@gbpconsult.co.uk
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*Critical Success Factors explained
Critical Success Factors (CSFs) are the essential attributes for successfully delivering the project and are used along with spending objectives to evaluate the options. A typical set of CSFs used by stakeholders are provided in the table below.
Critical Success Factor | How well does each option... |
Strategic Fit |
|
Value for Money |
|
Supply side capacity and capability |
|
Potential Affordability |
|
Potential Achievability |
|
**Spending Objectives explained
The project should also have detailed SMART Spending Objectives, being the drivers for interventions and spend, and typically answer the “why do we need to do this/ or why is it needed?” The generic drivers of spend, on which most spending objectives are based, are as follows:
To improve the quality of public service by delivering better social outcomes (Effectiveness)
To improve the delivery of public services by the better use of inputs and outputs (Efficiency)
To reduce the cost of public services (Economy)
To meet statutory, regulatory or organisational requirements and accepted best practice (Compliance)
To re-procure services in order to avert service failure (Replacement)
***Long List Framework explained
Once you’ve set out the parameters on which you want to assess your long list of options, the long list options framework, (as recommended for use within the HM Treasury Green Book) provides a systematic approach to identifying and filtering a broad range of options. The key dimensions to be assessed are:
Dimension | Description |
Scope | The “What” – eg What to include in the project? |
Service Solution | The “How” – eg How to deliver the project? |
Service Delivery | The "Who" – eg Who will deliver the project? |
Implementation | The “When” - Timescales and phasing for delivering the project? |
Funding | The "Funding" - Financing the project |
The potential scope of the project needs to be set out in terms of the operational capabilities and service changes required to meet the business needs (and deliver on the spending objectives). These are often considered, on a sliding scale, in terms of:
Core: Essential changes without which the project will not be judged a success
Desirable: Additional capabilities and service changes which the project can potentially justify on a cost/benefit and thus value for money basis
Optional: Possible capabilities and service changes which the project can potentially justify on a marginal, low cost and affordability basis.
Remember, this is not a wish list, if you were assessing a hotel - Core would be a room with a bed, Desirable could be a window and ensuite, and Optional could be a king sized bed. You need to be clear on what is absolutely essential and determine additional and possible capabilities and services on a cost/ benefit/ affordability basis.
A range of options against each dimension should then be considered and assessed against the various spending objectives and critical success factors, noting the advantages and disadvantages of each. This is often undertaken as a series of tables as shown below:
****The Short List explained
Having critically appraised the 5 dimensions of the long list options framework, assessing whether they should be carried forward or discounted, and which is your preferred way forward, should enable you to determine a configuration for your Preferred Option, together with a small number of other options to create your short list.
This can then be assessed in detail for costs (capital and revenue), benefits and risks in order to determine your Value for Money Preferred Option.
This Options Framework can be a critical tool in determining a robust set of short listed options, providing you with a framework to assess the long list, and provide evidence of the thought process and help support engagement and discussions with wider stakeholders.
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