Property / Estates Strategy Business Case
Sometimes our clients have more complex issues that need to be evaluated in a structured way. This may require evaluation of data from different sources and consultation with a wide range of stakeholders. Typically, these could include purchase of major systems, complex procurement options, re-structuring a property portfolio and major workspace re-configurations.
In these circumstances we either use corporate guidelines to help develop the business case or more often in the public sector we use the “Treasury Green Book” considering the following areas:
The strategic case setting out the strategic context of the review and what it is seeking to achieve
The economic case outlines the various options available and demonstrates a way forward which best meets the existing and future needs of the service and optimises value for money.
The commercial case outlines the content and structure of the proposed deal
The financial case confirms likely funding arrangements and their affordability
The management case demonstrates that the scheme is capable of being delivered successfully to cost, time and quality with risks identified and managed appropriately.
As part of the business case we typically evaluate a number of options. For example, for property portfolios a financial model of the portfolios is constructed to analyse the impact of different occupancy and disposal strategies on the likely financial outcomes.
This will include the impact on the revenue cost and the operational effectiveness of each solution.
With property there may well be capital receipts from capital disposals and reduced operating costs; this may be offset by the need to invest in better technology, upgrading space and higher cost per square metre for facilities management as FM services are more intensively used.
To understand these competing receipts, costs and investments a net present value (NPV) cash flow approach is used to assess the relative costs of competing approaches to managing the portfolio.