Summary
Usually the brainstorming step lead to the identification of a list of desired innovative solutions, which have to be validated in comparative terms and put in order of priority, on the basis of their expected costs-benefits, impacts and trends.
To validate and rank-order the perceived needs and to address the subsequent technological scanning activities (as described in WP3), this task is aimed to define business case.
The business case require a straightforward articulation of the problem/needs that a procurement action is supposed to solve. It identifies the areas where there are issues that need to be addressed, such as inefficiencies, missed solutions, unacceptable market price and performance or unfavourable consumer response to a product or service already available on the market.
It is very important to evaluate the historic past-performance of the process or service under consideration, using key performance indicators (KPI) as a measure (cost, headcount, time, outcomes, etc.). These KPIs have to be, then, extrapolated the future based on predictive data such as cost escalation, etc., drawn from authoritative sources in order to fix the improvements and KPIs to be achieved.
With this task we will elaborate a business, more properly “service”, case aimed to evaluate and verify the positive balance between risks and benefits for all stakeholders, reducing risk of mistakes in (procurement) decision making.
Having in input the business case modelling exercise and assuming a portfolio management perspective, the task will be able to rank-order the list of needs, suitable to be addressed by (direct and/or collaborative and/or catalytic) procurement initiatives.
The business or service case, will present these information.
• Problem statement: the description of the problem has to be thorough and include constraint descriptions, without attempt to prescribe the solution and should concern what is the issue, when does it happen, who is impacted and how often does it happen and what is the actual and long-term potential problem dimension.
The described ‘problem’ has to be “genuine”, real, not itself questionable and not a just a symptom of a more fundamental issue. In other terms is important to determine if the problem is ‘big’ enough to justify devoting resources to solve it.
To address a PCP, the problem may be predictive or anticipatory as it lies in the future, in this sense trend data are important to show the persistence and evolution of the problem.
• Opportunity cost estimation: quantification of the cost (over a defined time period and within a defined geographical area) of delaying or not proceeding with the intended investment, extrapolating the future based on predictive data.
• Desired solution: description in functional and performance terms the solution desired with a sufficient detail to allow the decision-makers to evaluate the solution.
• Risks identification and management: assessment of the expected risks to which the project will be exposed and outline a plan to manage the risks.
• Benefits analysis: identification of improvements in quality and how and when the costs will be recouped and savings will be generated.
• Critical success factors and recommendations: list elaboration of the factors needed to face the market failure and ensure win-win procurement, such as the European or global scale of the demand, the need for open standards at an European level, etc..
• Reference materials Catalogue all reference materials for the business case.
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