Legal Aspects & EU Procurement

Business Case
& Specification Writing

Trainers’ Notes

Page 1 of 31

Business Case & Specification Writing© SW IEP, 2011

Content

Introduction

Session 1: Introduction to Business Cases

Session 2: Business Case Content

Session 3: What is a Specification?

Session 4: Writing a Specification

Key
/ Instructor-led presentation or demonstration
/ Pairs or small group activity
/ Participant feedback
 / Duration of activity
/ Link to PowerPoint presentation


About this Pack

This pack has been developed using the original training materials developed by Cordie for the Fire & Rescue Service. The pack can be used as a basis from which to prepare a face-to-face training programme. It consists of 4 individual, stand-alone training days which can be delivered individually or as a linked programme.

Timing and Delivery

Any timings indicated are given as suggestions only. Trainers should adapt the timings of the sessions to suit the needs of individual participants and groups. Discussion points and activities are included and activity sheets have been created to support certain activities. Trainers using this pack shoulddeliver it in a manner that:

  1. meets individual learning styles (reflector, activist, pragmatist, theorist) through the use of various delivery methods
  2. supports individual preferences (visual, auditory, kinaesthetic) for receiving and assimilating information
  3. follows the principles of the learning cycle (concrete experience, reflective observation, abstract conceptualisation, active experimentation)
  4. provides feedback to support learning

Differentiation and Specific Needs

Every training event has mixed-abilities and participants with individual goals and intended outcomes. Trainers shouldplan learning activities so that they are organised in such a way as to ensure that learning takes place for each participant at the appropriate level. Differentiation can be achieved through regular opportunities for self and trainer assessment, consolidation and reflection. This might involve allocating different amounts of time to complete a task, scaffolding tasks for some participants whilst being less directive for more confident or experienced learners and introducing new vocabulary. clearly with meanings and definitions

Practical support tools may be necessary for individuals with specific needs to ensure these do not inhibit successful participation. This might include the provision of mechanisms such as:

Sign language experts

Reading equipment

Laptop

Voice recorder

Evaluation

Kirkpatrick's ideas were first published in 1959 to measure four levels of evaluation:

  1. Reaction
  2. Learning
  3. Behaviour
  4. Results

All levels of evaluation are important. Level 1 is often omitted by learning professionals because it doesn't directly relate to learning; however, if the learner is distracted by something in the learning experience, his or her ability to learn can be impacted. Levels 2, 3 and 4 are also important because a difference in behaviour is the intended outcome for all learning programmes. As the trainer, you will be in a position to judge levels 1 and 2 throughout the delivery of the sessions. Levels 3 and 4 can only be assessed after the learning session at some future point.

Several authors have suggested an additional fifth level of evaluation. JJ Phillips has argued for the addition of a "Return on Investment” (ROI) level to compare the fourth level of the standard model to the overall costs of training. Roger Kaufman has argued that ROI is essentially a level-four type of evaluation since it is internal to the organisation and that a fifth level of evaluation should focus on the impact of the organisation on external clients and society.

Example Evaluation Forms can be accessed from these links:

Evaluation Level 1:

Evaluation Level 2:

Open the PowerPoint fileBC&SW.ppt:

Introduction

Introduction / Trainer’s name and background
Housekeeping: Toilets, fire escape, fire drill/alarm, timings, breaks etc / Slide 1

Icebreaker / Select an icebreaker from those provided in Activity 1 or use one of your own to help participants to settle into the session
allow 5 to 10 minutes for this activity depending on the group size / Activity 1

Groundrules / Groundrules help to create a positive and safe learning environment. Use Activity 2 to lead a discussion to agree a list of between 3 and 5 rules that all participants are comfortable with / Activity 2

Objectives / At the end of the session, participants will have knowledge and an understanding of:
The fundamental principles of preparing for and developing a business case and specification:
What is a business case and when is it needed?
Typical business case contents
What is a specification and why is it important?
Types of specification
Special considerations when buying services
Potential issues and challenges and how to manage them
Check understanding and levels of knowledge. Ask what they procure, make notes to refer back to / Slide 4

Sessions /
  1. Introduction to Business Cases
  2. Business Case Content
  3. What is a Specification?
  4. Writing a Specification
/ Slide 5

Activity 1 – Icebreaker Activity

Select an icebreaker from those provided below or use one of your own to help participants to settle into the session. Depending on the group size, allow 5 to 10 minutes for this activity.

Icebreaker 1 – Speed dating

Split the group into pairs and allow them a minute or two each to describe their job, hobbies and their experience/level of knowledge on the training topic. Bring the group back together and each pair introduces their partner to the wider group. This activity works well because people are more comfortable when talking about themselves in pairs and are more relaxed about talking about another person to a larger group.

Icebreaker 2 – Alliteration

Ask each person to introduce themselves using alliteration, for example Restless Russell or Clever Claire. This activity works well because alliteration can help individuals to recall some of the more unusual or humorous choices.

Icebreaker 3 – Animals

Ask each person to give their name and to state which animal they connect with and their reasons. This activity works well because it can help individuals to be remembered by their animal choices.

Icebreaker 4 – Bingo

Devise a bingo sheet and ask participants to move around the room trying to find people that match the bingo squares. Each square is worth a number of points. After 5 minutes, the activity is complete and each bingo square discussed. This activity works well because participants need to move around the room talking to each other. An example is given below

Activity 2 – Ground rules

Ground rules help to create a positive and safe learning environment. Use the following example to lead a discussion and agree a list of between 3 and 5 rules that all participants are comfortable with. These should be recorded on a flipchart.

Purpose of the Ground Rules

These ground rules were developed in order to:

assist tutors to establish a framework within which to conduct taught training sessions

help participants to understand what to expect from the relationships with their peers and tutors

clarify the rights and responsibilities of everyone involved in the training programme

encourage discussion to define boundaries

clarify the issues of confidentiality

The Ground Rules

Participants can expect:

  1. respect of their views, opinions and perspective and a non-judgmental response to their comments
  2. to share examples (of mistakes and good practice) as part of an open and honest learning exchange
  3. sessions to start and finish on time
  4. to receive clear, constructive, qualitative feedback
  5. all candidates to fully participate and engage in the learning activities leading to a positive, developmental and fully supportive atmosphere in which to learn

Confidentiality

All taught sessions are covered by The Chatham House Rule. The Chatham House Rule originated at Chatham House with the aim of providing anonymity to speakers and to encourage openness. It is now widely used in the English-speaking world, as an aid to free discussion, particularly by local government, commercial and research organisations. The rule was devised in 1927 and refined in 1992 and 2002. Since its refinement in 2002, the rule states:

“When a meeting, or part thereof, is held under the Chatham House Rule, participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed.”

The Rule allows people to speak as individuals, and to express views that may not be those of their organisations, and therefore, it encourages free discussion. Speakers are then able to voice their own opinions, without concern for their personal reputation.

Session 1: Introduction to Business Cases

What is a Business Case and when is one needed? / Lead a group brainstorming session to:
  1. consider the meaning of ‘business case’
  2. discuss as a group with input from individuals
allow 5 minutes for this activity / Slide 6

Some functions / Discuss how a business case supports the decision-making process / Slide 7

Innovation savings – think and do differently / Supplier prices are generally made up of Direct Costs, Overheads, Risk premium. The difference between the selling price and the sum total of these three elements is the supplier's profit. Traditionally procurement attacks the profit element in order to achieve savings. This squeezes the suppliers profit margin and provides limited savings as this only represents 10% of the whole. Innovation looks at how goods or services can be delivered differently where savings can be achieved by reducing either Direct costs, overheads or risk premium to achieve savings in areas of higher contribution. So if the 90% is targeted then this may achieve 40% savings through activities such as soft market testing and demand challenge / Slide 8

Why have a Business Case? / Explain how a business case provides a framework to outline and refine requirements, analyse options and recommend solutions / Slide 9

When is a Business Case required? / Discuss the links with organisational policies and regulations / Slide 10

Writing a Business Case will help to . . / Summarise the positive outcomes of having a business case / Slide 11

Be prepared / Summarise the steps involved – a more in-depth look at how to compile a business case will follow / Slide 12

Session 2: Business Case Content

Executive Summary / Briefly outline the purpose of an Executive Summary:
This is what we want you to approve......
And this is why it is a good idea...... / Slide 14

Introduction / Briefly outline the purpose of the Introduction:
This is where we are now......
And why we need to change...... / Slide 15

Project management / Briefly outline considerations for how a project is managed:
Here’s the process that will take us through to successful implementation..... / Slide 16

Definition, scope and implications / Briefly outline the definition, scope and implications:
This is what we need to buy and the broader impact..... / Slide 17

Stakeholder analysis and management / Discuss the model and apply to an example / Slide 18

Activity 3 – Stakeholder engagement exercise / 30 minutes – pairs/small group exercise
Allow 15 minutes to discussthe activity. Talk through findings and answers in plenary – note some scenarios have more than one ‘answer’ but this is typical of real-life / Activity3

Technical considerations / Briefly outline the technical considerations:
We have considered how the purchase will impact on us operationally..... / Slide 20

Commercial considerations / Briefly outline the commercial considerations. Emphasise that this is a chance to look both internally and externally to explore collaboration opportunities. Lead a discussion on soft market testing and ways of stimulating competition to energise the market:
And here are the key business considerations which are relevant to the purchase..... / Slide 21

Additional considerations / Discuss methods of sharing responsibility and new ways of working / Slide 22

Risk analysis / Briefly outline the concept of risk analysis:
And we have considered the risks and how they can be managed..... / Slide 23

Activity 4 – Risk analysis / 20 minutes – pairs/small group exercise
Allow 10 minutes to discussthe activity and 10 minutes to feedback to wider group / Activity 4

Financial and resource considerations / Briefly outline the financial and resource considerations:
These are the relevant financial aspects......
And the impact on headcount......
Emphasise the procurement activity should add value and produce savings – it is not simply a process to follow / Slide 25

Investment appraisal techniques / Briefly outline the Investment appraisal techniques / Slide 26

Breakeven point / Discuss the breakeven model but focus on the principle rather than complex calculations / Slide 27

Benefits management and realisation / Briefly outline the concept of benefits:
And these are the benefits that the purchase will deliver...... / Slide 28

Options appraisal / Briefly outline the concept of options appraisal:
A number of options have been considered and evaluated...... / Slide 29

SWOT analysis / Discuss the SWOT model / Slide 30

Activity 5 – Evaluating options / 10 minutes – lead a group discussion to identify appropriate evaluation criteria / Activity 5

Recommendation / Briefly outline the content of the recommendation section:
This is the option we recommend....
And why......
Discuss governance and approvals process / Slide 32

Other content / Briefly outline other content that could be included in the business case documentation / Slide 33

Summary of typical content / Review the business case content – this will be provided in a handout / Slide 34

Business case checklist / Run through the checklist – this will be provided in a handout / Slide 35

Activity 3: Stakeholder Engagement

The GoWest Purchasing Organisation (GWPO) is a not-for-profit purchasing consortium serving public bodies throughout the West of England and border counties of Wales. Its main role is to support the public sector through collaboration, thus creating efficiency through economies of scale and synergy. Part of its agenda is to establish and maintain cost-competitive framework agreements for use by local government and non-departmental public bodies within the geographical area.

You have recently joined GWPO as a Senior Category Manager based in the Much Wenlock office. Prior to joining GWPO you worked for the OGC as a Buying Manager responsible for building components.

Your boss has asked you to take over the category sourcing project for Domestic Boilers, as the existing Category Team Leader is about to go on maternity leave. It is a large category of expenditure, as many of GWPO’s clients are currently refurbishing their housing stock as part of the “Building Better Homes” initiative.

You have been allocated the services of Sonja Ullemann, a market research analyst who is working on an interim placement (temporary contract) for the next 6 months – although you understand that you will only be permitted up to 20% of her time, as she is shared equally with David Anderson, the Category Team Leader for the Heating, Ventilation & Air Conditioning (HVAC) subcontractor category team.

David Anderson is a well-established and influential character within GWPO. Although both yours and his category projects were initiated at the same time, the HVAC category team seems to have progressed far better than the boiler team. Initially the two teams had been planned to work in sequence, as it was believed that success in these categories was interdependent. However, due to David’s charismatic leadership and a number of incremental “quick wins”, the HVAC team is seen to be “leading the way” in category sourcing management, whilst the Boiler team seems to have “lost its way”. This is compounded by a lack of tangible governance documentation on the project.

In his briefing to you on your first day, your boss suggested that greater focus on project governance was essential to bring the project back on track. He suggests you read the project file and speak to members of the project team to find out more, and then prepare a business case for the next 6 months’ funding for the project.

Within the project team, there are two local Business Partner representatives – one from the South West (Charlie Saunders) and the other from Cumbria (Karen Olsen). Karen is a senior member of the GWPO business partnering team, who is extremely influential and has been “marked” as a high-flyer and future potential Executive Board member. Unfortunately Karen seems to have very little time to give to the project and has missed a number of key meetings due to other conflicting diary commitments. Her commitment to the project has been questioned, although nobody has dared say this directly to her, because of the influence she has within GWPO.

Charlie Saunders, on the other hand, was appointed to the team as part of a pre-retirement package. Although Charlie only works three days a week, he is considered to be a technical expert in boiler manufacture and is on extremely close personal terms with each of the account managers of the main European manufacturers. Charlie’s technical knowledge has been a great asset to the team to date, however he appeared to be uncomfortable during the initial spend baselining exercise and is now beginning to challenge the validity of category sourcing as an effective commercial approach.

As for representation in the other geographies, there has only been limited success so far. You have seen an e-mail from John London, a senior project manager from South Wales, stating that he was very keen to find out more and support the process of finding a preferred supplier. However this e-mail is now over three months old and seems to have been overlooked by your predecessor, despite the fact that nearly 15% of the potential expenditure is from this region.