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Business Case Primer: How OMB 300/53 Can Lead to All-Green Scores

By Mike Ipsaro, PMP, CCE/A, Technical Director

Each year Program Managers are tasked with proving that investments align with agency mission and support business needs with low risk during the investment lifecycle. The OMB Budget Exhibit 300/53 is a business case that justifies the strategic and economic value of any investment, say for example, in major IT infrastructure. The business case helps organizations plan and report the progress of investments to stakeholders, including Congress.

Given today’s world of tight fiscal constraints and far reaching visibility, the need for “green scoring” business cases is more important than ever. Here’s the first of my two-part primer on business cases and how to get to green.

Federal Business Cases: The Stakes are High

The federal government has an enormous responsibility to meet critical missions, while being prudent stewards of scarce taxpayer-funded resources. According to the Federal Government’s IT Dashboard, 26 Federal executive level department agencies prepare almost 6,800 capital asset business cases each year, valued at approximately $78 billion. Consultants help construct many of these business cases.

The quality and results of business cases are acutely important to stretching dollars to meet agency goals. Cases are scored according to predetermined criteria and rating scales by Capital Planning Investment Control (CPIC) and subject matter experts (SME) external to the program or project office, and even the agency before final submission. Cases are rated on a scorecard from red (problematic) to yellow (needs improvement) to green (great—go!).

The case is more than a report card however; it’s a working tool to facilitate continuous improvement. Therefore, the credibility and quality of the information are paramount, particularly because a public-facing Federal IT Dashboard continuously reports and monitors investment progress. In other words, a poor rating on the IT Dashboard suggests to the public that a publicly funded investment is poorly performing, or may not have been a wise investment from the beginning.

A Green Scorecard Means Doing the Basics Well

The elements of the business case are consistent with the types of information you would typically inquire about if you were investing in a capital asset. Here are some of the major areas of an actual business case for the most recent FY 2013 budget cycle:

  • Project Summary – state mission and strategic goals
  • Program/Project Management – show the project’s charter, organization and resources
  • Acquisition Strategy – list procurement information supporting the project
  • Operational Performance – layout activities, metrics and reporting frequency
  • Security – For IT investments, ensure security requirements are addressed. Maintain a current and accurate tracking of systems in the inventory to the appropriate IT Investment
  • Privacy – assess how the investment addresses privacy requirements
  • Enterprise Architecture – link investments in services, IT, etc. to organizational blueprint for IT assets
  • Alternatives Analysis (including Life Cycle Cost Estimate) shows how the preferred solution was derived
  • Operational Analysis – covers four OMB required topics
    • Customer Results
    • Strategic and Business Results
    • Financial Performance
    • Innovation
  • Risk Management – presents risks in many areas such as:
    • Cost/schedule
    • Program management
    • Technical management
    • Acquisition management
    • Human capital
    • Other
  • Project Execution – lays out how investment and component parts will execute or are executing against baseline

It’s Do-able With Deep Coordination

As Kermit the Frog sings (and one of our Federal customers, who received all green scores across an investment portfolio, said), “It’s not easy being green.” However, green scores are possible when many people integrate and communicate their progress and work together, to do the basics well. When this happens, the chance of continued investment performance success and subsequent funding goes up, while probability and severity of risk goes down.

In Part II of this blog, I will discuss the challenges you will likely face on the way to green scores and how to overcome them. Until then, read about a real-world example of one agency team’s journey to an all-green portfolio.

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