APMG BBC Foundation key terms

A framework for building a business case across five linked dimensions: strategic, economic, commercial, financial and management. Each dimension answers a different question about whether, how and with what the proposal should be delivered.

A structured document that justifies a proposed change, setting out the need, the options considered, costs, benefits, risks and delivery arrangements so decision-makers can approve, reject or reshape it.

The statement of why the current situation is unacceptable and what would improve if action were taken, including the scale of the problem and the cost of doing nothing.

The extent to which a proposal supports the organisation's wider goals, priorities and published strategies, rather than only solving a narrow local problem.

The outcomes the organisation intends to achieve with the money it spends, expressed clearly enough to guide option generation and to judge later whether the investment succeeded.

A test requiring objectives to be specific, measurable, achievable, relevant and time-bound, so that vague ambitions become commitments that can be tracked and evaluated.

The first, high-level business case document. It confirms the strategic need, presents a long list of options and asks for approval to shortlist and develop the outline case.

The measurable improvements a proposal is expected to produce, such as better service, lower cost or reduced risk. Each should be described, quantified where possible and given an owner.

The structured comparison of alternative ways of meeting the spending objectives, assessing costs, benefits and risks for each, in order to recommend a preferred option.

The small number of conditions that must hold for the proposal to succeed, such as user take-up or supplier capacity, used to screen options and shape delivery.

The broad set of feasible alternatives generated before detailed analysis, including continuing as now and more creative choices, later narrowed using agreed screening criteria.

The reduced set of options that survive screening against critical success factors and constraints, and which then receive detailed cost, benefit and risk appraisal.

The baseline of continuing current arrangements, either doing nothing or the minimum necessary. It shows the consequences of inaction and is the comparator for all other options.

The well-evidenced tendency to understate costs and timescales and overstate benefits. Adjustments are applied so business cases do not rest on unrealistically favourable assumptions.

The value today of an option's future costs and benefits after discounting for the time value of money. A positive figure means benefits exceed costs in today's terms.

The percentage applied each year to convert future costs and benefits into present values, reflecting the preference for benefits sooner rather than later.

The total discounted benefits of an option divided by its total discounted costs. Above one means benefits exceed costs; it ranks options but hides their absolute size.

The most that users or the public would give up to obtain an outcome, used to put a money value on benefits that have no market price.

UK Treasury guidance on appraisal and evaluation, explaining how to compare options, value costs and benefits and adjust for risk and optimism bias.

The plan for buying the required goods or services, covering routes to market, how work is packaged, timescales and how competition will secure value for money.

A decision about who delivers the work, for example in-house teams, outsourcing, a joint venture or a mixed model, each carrying different costs, control and risks.

The agreed split of identified risks between the public sector and its suppliers, based on who is best placed to manage each. Poorly judged transfer raises prices.

The rules setting how much a supplier is paid and when, such as milestones, unit prices, availability payments or performance deductions, linking payment to delivered outputs.

Evidence that potential providers have the skills, experience and capacity to deliver the requirement, and that the market offers enough credible bidders to sustain competition.

The second-stage document. It appraises the shortlisted options, names the preferred option, and sets out procurement, affordability and management arrangements before seeking approval.

The final-stage document, prepared after procurement, confirming the agreed deal, final costs, affordability and delivery arrangements before investment is formally committed.

Whether the organisation can actually meet the proposal's costs from the money available in each year, allowing for other commitments and any borrowing.

Every cost an option will generate over its full life, including purchase, operation, maintenance, replacement and disposal, not only the initial capital outlay.

The sources of money that will cover the costs, such as capital allocations, revenue budgets, grants, charges or borrowing, together with the conditions attached to each.

How a transaction will appear in the organisation's accounts, for example capital or revenue, on or off balance sheet, and the effect on budgets.

Money set aside within the budget to absorb identified risks and expected cost variation, sized through risk analysis rather than a flat percentage.

The schedule of work showing what will be done, by whom, by when and with what resources, including milestones, dependencies and the critical path.

The structures and rules for decision-making, accountability and reporting on the project, including who approves what and how performance is scrutinised.

Scrutiny that gives decision-makers confidence that plans, controls and reported progress are sound, typically through staged independent reviews at key decision points.

The continuing process of identifying, assessing, assigning and responding to threats and opportunities, with risks logged, owned and reviewed throughout delivery.

A document describing each expected benefit, how and when it will be measured, who owns it, and what must happen after delivery to secure it.

An evaluation after the project has gone live, comparing actual costs, benefits and outcomes with those promised in the business case, and recording lessons.

The individual accountable for the project's overall success, who owns the business case and ensures the project delivers its intended outcomes.