Last edited 20 Jan 2022

Business case for construction projects


[edit] Introduction

The CIOB Code of practice for project management 4th edition, defines a business case as the 'Information necessary to enable approval, authorisation and policy-making bodies to assess a project proposal and reach a reasoned decision'.

In the very early stages of a project, a preliminary business case should be prepared. This is then developed into a detailed business case for the preferred option after feasibility studies and options appraisals have been carried out. The detailed business case is the document that will be used to determine whether authority should be given for the preferred option to progress to the next stage (concept design).

Preparing a business case may require input from independent client advisers (such as management accountants, business development advisers, facilities managers, specialist advisers such as IT consultants, etc.), but generally, it will be prepared and 'owned' by the client, who can learn a considerable amount about themselves and their project through the process of writing the business case.

[edit] Contents

A business case may include:

  1. Planning committee meetings.
  2. Key holiday dates.
  3. Client board meetings.
  4. Spending budgets.
  5. Competition coming to market.
  6. Grant entitlements.
  • Projected financial forecasting:
  1. Projected balance sheet.
  2. Cash flow projection.
  3. Project expenditure.
  4. Income (or savings) projections.
  5. Projected profit and loss accounts.
  • Plans for the next stage.

The business case should be written in clear, concise language that is easy to understand and may include diagrams and illustrations where appropriate. It may be seen by a wide range of people and so should be accessible and should express key brand values.

It is likely to be presented as a report, however, where possible, information and requirements should be scheduled in a database or spreadsheet format that will be easy to expand and will be easy to use to test whether proposals satisfy requirements later in the project.

External consultants may be brought in to review a draft business case before it is finalised or circulated to a wider audience.

[edit] Other definitions

NB The RIBA Plan of Work 2013 defines the business case as: '...the rationale behind the initiation of a new building project. It may consist solely of a reasoned argument. It may contain supporting information, financial appraisals or other background information. It should also highlight initial considerations for the Project Outcomes. In summary, it is a combination of objective and subjective considerations. The Business Case might be prepared in relation to, for example, appraising a number of sites or in relation to assessing a refurbishment against a new build option.'

Guide to developing the project business case, Better business cases: for better outcomes, published by HM Treasury in 2018, defines a business case as: ‘A management tool that records the current state of evidence and thinking concerning the development approval and implementation of proposal. It supports the processes of scoping, analysis, appraisal, planning, monitoring, evaluating, approval and implementation a proposal and is the repository for the evidence base.’

[edit] Related articles on Designing Buildings

[edit] External references


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