Business Case (SOBC)

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Overview

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When to Use

• Phase: Phase 4 - Business Case Justification
• Timing: AFTER stakeholders and risk assessment, BEFORE detailed requirements
• Purpose: Secure executive approval and funding to proceed with detailed requirements and design

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Business Case Lifecycle

• SOBC (Strategic Outline): High-level case for change, done BEFORE detailed requirements — this command
• OBC (Outline Business Case): After some design work, with refined costs
• FBC (Full Business Case): Detailed case with accurate costs, ready for final approval

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Command Usage

/arckit.sobc <project ID or initiative>

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Examples

# Create SOBC for existing project
/arckit.sobc 001

# Cloud migration programme
/arckit.sobc cloud migration programme

# New initiative
/arckit.sobc Create SOBC for payment modernization

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Interactive Configuration

1. Strategic Options:
   • 4 options (Recommended): Do Nothing + Minimal + Balanced + Comprehensive
   • 3 options: Do Nothing + two alternatives
   • 5 options: Do Nothing + four alternatives (complex programmes)
2. Appraisal Depth:
   • Strategic estimates (Recommended): ROM costs and qualitative benefits
   • Semi-quantitative: ROM costs with quantified key benefits and basic NPV
   • Full quantitative: Detailed costs, quantified benefits, NPV, BCR, sensitivity analysis

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The 5-Case Model

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A. Strategic Case

• Problem Statement: What’s broken? (from stakeholder pain points)
• Strategic Fit: How does this align with organizational strategy?
• Stakeholder Drivers: Map to stakeholder analysis
  • Link EACH driver to strategic imperative
  • Show intensity (CRITICAL/HIGH/MEDIUM)
• Scope: What’s in/out of scope (high-level)
• Dependencies: What else must happen?
• Why Now?: Urgency and opportunity cost

### Problem Statement
Legacy payment system processes 500 transactions/day with 7-day settlement. 
CFO faces £2M annual operational cost (D-1: Reduce costs - FINANCIAL, HIGH).
Customers complain about slow refunds (D-7: Improve satisfaction - CUSTOMER, HIGH).

### Why Now?
- Current system EOL in 18 months (vendor support ending)
- Competitor offers 2-hour settlement (market pressure)
- PCI-DSS 4.0 compliance required by 2025 (regulatory deadline)

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B. Economic Case

• Option 0: Do Nothing (baseline)
• Option 1: Minimal viable solution
• Option 2: Balanced approach (often recommended)
• Option 3: Comprehensive solution

• High-level costs (rough order of magnitude)
• Benefits delivered (% of stakeholder goals met)
• Risks
• Pros/cons

• Link EACH benefit to specific stakeholder goal from ARC-{PROJECT_ID}-STKE-v*.md
• Quantify where possible (use stakeholder outcomes for metrics)
• Categorize: FINANCIAL | OPERATIONAL | STRATEGIC | COMPLIANCE | RISK

### Benefit B-1: £2M Annual Cost Savings
**Category**: FINANCIAL
**Stakeholder Goal**: CFO Goal G-1: Reduce processing time 7d → 2d
**Quantification**: 
- Current: 20 FTE × £100K = £2M
- Target: 13 FTE × £100K = £1.3M (30% reduction)
- Annual Savings: £700K
**Timeline**: Year 1: £200K, Year 2: £500K, Year 3: £700K
**Measurement**: Monthly FTE count and cost tracking
**Risk**: Medium (depends on successful change management)

• Capital costs (build)
• Operational costs (run)
• 3-year TCO estimate

• Qualitative assessment (this is strategic, not detailed)
• Expected ROI range
• Payback period estimate

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C. Commercial Case

• UK Government: Digital Marketplace route (G-Cloud, DOS, Crown Hosting)
• Private Sector: Build vs Buy vs Partner

• Supplier availability
• SME opportunities (UK Gov requirement)
• Competition considerations

### Procurement Strategy
**Route**: Digital Marketplace G-Cloud 14
**Rationale**: 
- 150+ payment gateway suppliers available
- Pre-competed framework (faster procurement)
- SME-friendly (60% of suppliers)
- Compliant with TCoP Point 11 (Purchasing Strategy)

### Shortlist Criteria
- PCI-DSS Level 1 certification (MANDATORY)
- UK data residency (MANDATORY)
- 99.99% uptime SLA (MUST)
- Open Banking API support (SHOULD)

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D. Financial Case

• UK Gov: HMT approval needed above £X?
• Private: Board approval needed?

### Investment Summary (3-year)
**CAPEX** (Year 1):
- Software licenses: £500K
- Implementation: £800K
- Data migration: £200K
- **Total CAPEX**: £1.5M

**OPEX** (per annum):
- Managed service: £300K/year
- Support contracts: £100K/year
- Cloud hosting: £200K/year
- **Total OPEX**: £600K/year

**3-Year TCO**: £1.5M + (£600K × 3) = £3.3M

**Funding Source**: Spending Review 2024 settlement (confirmed)
**Approval**: CFO (< £5M threshold), no HMT approval needed

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E. Management Case

• Who owns this? (from stakeholder RACI matrix)
• Steering committee membership
• Decision authorities

• Approval gates
• Major deliverables
• Go-live target

• Team size (estimate)
• Skills needed
• External support

• Stakeholder engagement plan (from stakeholder analysis)
• Training needs
• Resistance mitigation (from stakeholder conflict analysis)

• How will we measure success? (use stakeholder outcomes)
• Who monitors benefits?
• When do we expect to see benefits?

• Top 5-10 strategic risks
• Mitigation strategies
• Risk owners (from stakeholder RACI)

### Governance
**SRO**: CFO (Accountable - from RACI)
**Project Board**:
- CFO (Chair)
- CTO (Technology authority)
- Operations Director (Service delivery)
- Finance Director (Budget holder)
**Meeting Frequency**: Monthly

### Risk Management
**Top Risks** (from ARC-{PROJECT_ID}-RISK-v*.md):
- R-001: Vendor lock-in (TECHNOLOGY, High, 16) → CTO mitigation: Open standards
- R-003: Cost overrun (FINANCIAL, High, 15) → CFO mitigation: Stage-gate approvals
- R-007: Change resistance (OPERATIONAL, Medium, 12) → Ops mitigation: Co-design workshops

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Traceability to Stakeholders

Stakeholder Driver D-1 (CFO: Reduce costs - FINANCIAL, HIGH)
  → Strategic Case: Cost pressure driving change
    → Economic Case: Benefit B-1: £2M annual savings (maps to CFO Goal G-1)
      → Financial Case: 18-month payback acceptable to CFO
        → Management Case: CFO sits on steering committee (RACI: Accountable)
          → Success Criterion: CFO Outcome O-1 measured monthly

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Decision Framework

• Recommendation: Which option to proceed with?
• Rationale: Why this option? (reference stakeholder goals met)
• Go/No-Go Criteria: Under what conditions do we proceed?
• Next Steps: If approved, what happens next?
  • Typically: /arckit.requirements to define detailed requirements
  • Then: /arckit.business-case-detailed with accurate costs

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UK Government Specifics

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Strategic Case Includes

• Policy alignment (manifesto commitments, departmental objectives)
• Public value (not just efficiency, but citizen outcomes)
• Minister/Permanent Secretary drivers
• Parliamentary accountability

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Economic Case Includes

• Social Cost Benefit Analysis (if required)
• Green Book discount rates (3.5% standard)
• Optimism bias adjustment (add contingency)
• Wider economic benefits

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Commercial Case Includes

• Digital Marketplace assessment (G-Cloud, DOS)
• SME participation commitment
• Social value (minimum 10% weighting)
• Open source consideration

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Financial Case Includes

• HM Treasury approval thresholds
• Spending Review settlement alignment
• Value for money assessment
• Whole-life costs

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Management Case Includes

• Service Standard assessment plan
• GDS/CDDO engagement
• Cyber security (NCSC consultation)
• Accessibility (WCAG 2.2 AA compliance)
• Data protection (ICO/DPIA requirements)

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Output File

• Executive Summary (2-3 pages)
• Strategic Case: Why we need to act (10-15 pages)
• Economic Case: Options and value for money (15-20 pages)
• Commercial Case: Procurement approach (5-10 pages)
• Financial Case: Funding and affordability (5-10 pages)
• Management Case: Delivery capability (10-15 pages)
• Appendices: Stakeholder analysis, risk register, assumptions

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Prerequisites

• STKE (Stakeholder Analysis) - SOBC must link to stakeholder goals

• DO NOT proceed with SOBC
• Tell user: “SOBC requires stakeholder analysis to link benefits to stakeholder goals. Please run /arckit.stakeholders first.”

• PRIN (Architecture Principles) - Strategic alignment
• RISK (Risk Register) - Risks for Management Case

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Common Patterns

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Pattern 1: Technology Modernization

• Strategic Case: Legacy systems failing, stakeholder frustration high
• Economic Case: 3-5 options from do-nothing to complete rebuild
• Commercial Case: Cloud migration, Digital Marketplace G-Cloud
• Financial Case: £2-5M over 3 years, CFO approval needed
• Management Case: Phased migration, minimal disruption

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Pattern 2: New Digital Service

• Strategic Case: Citizen/customer demand, competitive pressure
• Economic Case: MVP vs full-featured comparison
• Commercial Case: Build in-house vs platform vendor
• Financial Case: £500K-2M year 1, ongoing £200K/year
• Management Case: Agile delivery, beta to live

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Pattern 3: Compliance/Risk Driven

• Strategic Case: Regulatory requirement, audit findings
• Economic Case: Minimum compliance vs best practice
• Commercial Case: Specialist vendors, certification needed
• Financial Case: Non-negotiable spend, insurance cost reduction
• Management Case: Deadline-driven, stakeholder compliance team owns

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Quality Checks

• All benefits trace to stakeholder goals
• At least 3 options evaluated (including Do Nothing)
• Costs estimated for 3-year period
• Procurement route identified
• Funding source confirmed
• Governance structure defined with RACI
• Top 5-10 risks included from risk register
• Benefits realization plan included
• Recommendation clear with rationale

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Next Steps

1. Present to Senior Responsible Owner (SRO) for approval
2. Present to Architecture Board
3. If approved: Run /arckit.requirements to define detailed requirements
4. After requirements: Refine to Outline Business Case (OBC) with firmer costs
5. After design: Create Full Business Case (FBC) for final approval

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Related Commands

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Example Outputs

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Key References

• HM Treasury Green Book - 5-case model
• Magenta Book - Evaluation design guidance
• Sourcing Playbook - Should-cost modelling