Business case template for a CLOUD SOLUTION The business case should discuss the options available to solve a business problem. The option to deploy a cloud solution should be weighed against available alternatives, such as in-house COTS solutions, rather than advocating a single, preferred solution. For each option, the business case should include the likely costs, potential savings, procurement and contractual arrangements and an overview of the perceived risks, which may contribute to the weakness of the option. The following section of the guide steps through the structure of a business case which presumes that a proposed cloud solution is preferred, having been objectively assessed to provide more value for money with adequate security over other alternatives. Agencies should use the business and cost models to make such an assessment. The completed business case will be subject to the agency's investment decision-making process and should be reviewed by the agency's architectural design authority or similar body.

1. Executive summarya

1.1 Summary of Options

Make a brief description of the current situation and the proposed response through deployment of a cloud computing solution, and fill in the following boxes:

Option One: Option name Brief Description: Include a one line description of the option Vendor: Name of the proposed cloud computing vendor Total Cost: $XX million Total Savings: $XX million Option Lifespan: N years
Strengths	Weaknesses	Recommendation
Option Two: Option name Brief Description: Include a one line description of the option Vendor: Name of the proposed cloud computing vendor Total Cost: $XX million Total Savings: $XX million Option Lifespan: N years
Strengths	Weaknesses	Recommendation

1.2 Financial Summanry

	Year 1	Year 2	Year 3	Year 4	Total
$'000 (NPV)	$'000 (NPV)	$'000 (NPV)	$'000 (NPV)	$'000 (NPV)
Option One	Capital*
Operational**
Total
Option Two	Capital*
Operational**
Total
Option Three	Capital*
Operational**
Total
Option Four	Capital*
Operational**
Total

*Capital: Note the expected reduction in ICT capital expenditure arising from the adoption of cloud computing solution. Show any reductions in capital expenditure using a negative sign, e.g. -$1,000. ** Operational expenditure includes transfers of capital expenditure funding to operating expenditure. Note: Use net present value (NPV) with an appropriate discounting factor for financial estimates.

2 Current Situation

This section sets out the issue/opportunity that proposal seeks to address. Provide an overview of the current situation, setting the context for the agency, business, stakeholder situation, technical environment and current risks.

2.1 Policy/Agency Context

State the business objective that would be realised through the available solutions. Compare the objective with the agency's strategic priorities. Refer directly to the outcomes and outputs in your agency's Portfolio Budget Statements, corporate plan and annual report. Include the identification of any relevant agency risks that contribute to the triggering situation for the proposal.

2.2 Current Technical Environment

As a business case for a cloud solution is ICT enabled, describe the current situation not only from a business perspective - but also from a current technical perspective. This section documents the relevant components of your current ICT baseline. For example, the section should briefly describe:

• ICT infrastructure (both hardware and software)
• Extent of virtualisation across the agency
• Voice and data communications facilities
• Workforce skills and numbers
• Security

2.3 Business Problem

Your cloud business case should begin by stating the practical business problem that options for deploying a cloud computing solution could help to overcome in achieving the government's policy and service delivery objectives.

Deployment of a cloud computing solution may address several business problems, including:

• Facilitating virtualisation across the agency (introductory, intermediate and advanced levels of virtualisation)
• Providing a low cost option for systems development work through cloud computing options (rather than investing in ICT infrastructure for new development work)
• Enhancing the level of service delivered to stakeholders through rapid elasticity and flexibility of service provision utilising a cloud computing vendor
• Reducing agency and whole-of-government costs, such as:
• reduced ICT costs through higher utilisation of infrastructure (optimisation)
• re-use of existing assets
• volume discounts
• standardisation and simplification
• Speed to implement
• Overcoming the limitation and constraints of a current solution

2.4 Stakeholder Impact

Describe the impact of the current situation on stakeholders.

2.5 Current Risks

Describe the risks that the current situation creates, and the risks of not responding to the current situation. Include both business and technical risks.

2.5 Current Costs

The ability to determine total cost of ownership (TCO) of existing systems will depend on the extent and maturity of the agency's ICT cost management practices. Data may be available from the CIO or CFO group on:

• annual ICT BAU budgets for specific systems;
• charge-back costs to the business unit for specific systems or ICT business support;
• specific supplier expense costs such as hosting or consulting; and
• previous project costs to compare development alternatives.

3 Proposed Response

Having identified why the business case is being developed, the proposed response section outlines what is being proposed to be done in response. This is about identifying the desired end state or destination, rather than the detail how to get there.

Include a description of the proposed response with any evidence that this will be an effective response to the current situation. This section should focus on 'what' is being proposed as a response, rather than 'how' that response can be delivered.

3.1 Strategic Alignment

Identify how the adoption of a cloud solution aligns with your agency objectives listed in the policy/agency context section. Refer to your agency's Portfolio Budget Statements to identify the outcomes that delivery of this response would support.

• Where relevant provide specific reference to your agency's ICT strategic vision and, where appropriate, AGIMO's Cloud Computing Strategic Direction paper.

3.2 Technical Environment

Describe the future state of the technical environment based on the proposed response (not the specific options). High level environment and architecture diagrams can be helpful, but keep in mind the audience for the document when thinking about the degree of technical detail to include.

3.3 Business Environment

Describe the future state of the business operational environment based on the proposed response.

3.4 Benefits

Provide a statement of the benefits that the project will achieve and indicative timing for when they will be realised. Include information on how benefits will be measured and the expected targets to be achieved for each measure.

Include interim and longer term benefits, and include any identified negative implications (which might be fluctuations in user-pay provisions of the contract, penalties for breaches of service level standards by the CSP, etc).

4 Proposal Summary

A summary of the information provided about the current situation, the proposed intervention using cloud solution options and the expected benefits.

A high level visual representation of the cloud solution might be helpful.

5 Solution Options

5.1 Design Criteria

Include where possible the high level requirements that any viable cloud computing solution will be expected to deliver against. Note the high-level business requirements that the solution must address. Consider areas such as:

• changes in business practices;
• transitional considerations;
• security considerations;
• dependencies across ICT platforms and architecture;
• reliability, availability and maintainability;
• usability, flexibility, scalability, interoperability;
• speed to deploy; and
• major external interfaces..

5.2 Identified Options

The business case must consider the available options from a range of differing cloud computing approaches to using in-house or non-cloud capabilities. The agency's capacity to adapt business processes and support the introduction of changes in culture will also be important considerations in the evaluation of options.

The outcome will be a shortlist of options for analysis and comparison in the initial cost-benefit analysis. Normally this shortlist will include a base case (maintaining existing arrangements), a "do minimum" case (to address only urgent and unavoidable requirements) and two to three other options.

Provide the detail of each option in the Option Details section.

6 Options Analysis

Summarise the most significant features of each option. Present a tabular comparison of the options against costs, savings, contract flexibility, implementation timeframe, design requirements listed above and risk. Note any preferences in a "Conclusions" line.

The table below presents a possible presentation.

Requirement	Option 1	Option 2	Option 3	Option N
Benefits
Disadvantages
Total costs
Total savings
Flexibility of the contract
Estimated implementation timeframe
Requirement 1
Requirement 2
Requirement N
Implementation risks
Conclusion

7 Implementation Approach

Describe the implementation approach for delivering the cloud solution, including the approach to market, the project/program management governance structures and other key control and assurance processes, describing variations for each identified option if different.

8 Agency Capability

Identify targeted capability areas in project management, procurement/contract management, relationship management and service management which will have to be addressed. Identify required skill sets and determine which will need to be procured or developed in-house. Propose a high-level approach to mature capability in targeted areas. Include any costs in the business case.

9 Security and information assurance

This section is intended to discuss the issues associated with security and information assurance in respect of the proposed cloud solution.

In particular, addressing the following areas in terms of security will be important:

• The security classification/dissemination limiting marker and type of information being processed and stored.
• A summary of the security issues that relate to the proposed cloud solution.
• A risk-based assessment of the information to be stored in the cloud.
• An overview of the agency's security assessment mechanisms that are used to determine whether CSPs have appropriate standards in place to meet the security requirements of customers.

10 Risks

A high level risk analysis should be undertaken to identify the key risks and the potential mitigating actions associated with cloud computing options. Risks should be ranked according to the agency's established risk management procedures. Refer to the DoFR Better Practice Guide on Risk Management[1] for more detailed guidance.

Key strategic risk	Risk rating*	Mitigating action
Business practices are not well understood prior to seeking cloud-based services via a vendor.		Agency to conduct business processing mapping and analysis to identify business processes that will be efficiently managed through cloud computing solutions.
Commercial arrangements for cloud-based services are not well understood by the agency.		Agency to seek advice from their procurement area on the nature of commercial arrangements associated with contracts with cloud vendors.
Business services with medium/high level risks are potentially identified for a cloud solution.		Agencies to undertake scoping work to identify business services carrying low risk and potentially the most feasible services to transition to a cloud solution.
Business continuity failure as a result of vendor with low capability.		Agency to determine capability of CSPs during the commercial assessment of the tender evaluation.
Security & information assurance failures.		Agency to determine the physical location of data storage under a cloud arrangement and to seek security/information assurance guarantees from cloud vendor. Only those services carrying low security risks should be in scope of provision via a cloud computing vendor.

* Risks are rated according to the agency's established risk management procedures.

11 Summary of option details

Repeat this section of the business case for each option, including the following subsections:

• Description
• Stakeholder Impact
• Costs
• Savings
• Benefit
• Summary Cost Benefit Analysis
• Risk
• Timeframe

12 Critical success factors

An analysis of Critical Success Factors (CSFs) can be useful in determining how well eachoption compares against the project investment options and benefits criteria. CSFs are defined as:

"The attributes that are used to determine the successful delivery of the programme and which the available options are assessed against."

CSFs will naturally vary from project to project and it is suggested that agencies consider the CSFs for each project on a case by case basis and involve key stakeholders in determining the CSFs.

Key CSFs	Description