DOD IT BUSINESS CASE ANALYSIS TEMPLATE 22 OCTOBER 2014
Per SECDEF directive, include the cost estimate associated with preparing this BCA. See SECDEF
Memo of 27 Dec 2010, Subjec
t: Consideration of Costs in DoD Decision-Making, in Appendix H for
information and instructions.
UNCLASSIFIED
UNCLASSIFIED
Business Case Analysis:
<
Specify the Title of the IT Project Here
>
<Submittal Date >
< Version >
< Organization >
DEPARTMENT OF DEFENSE
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
UNCLASSIFIED
<<Template Forward/Instructions>>
<<Delete this page when tailoring. All template guidance within<< >>
should be deleted prior to submission>>
<<Tailor per project appropriately given project scope, size,
state/documentation availability/time/other constraints for BCA
preparation>>
<<Ins
tructions regarding BCA Classification Marking:>>
<<UNCLASSIFIED: If the final BCA does not contain sensitive or classified information,
mark the front and back covers “UNCLASSIFIED” (as shown on this BCA template).>>
<<FO
UO: A “For Official Use Only” (FOUO) designation applies to unclassified
information sensitive in nature and exempt from public release under the Freedom of
Information Act. If the BCA contains such information, “FOUO” must appear on the front
and back covers (where UNCLASSIFIED now appears) and on the page(s) on which the
sensitive information exists.>>
<<CLASSIFIED: BCAs containing any CLASSIFIED information are to be handled through
separate channels, in accordance with the submitting organization’s CLASSIFIED
handling process and all applicable security policy procedures.>>
<POC >
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
2
Approval and Change Summary for the
[BCA name]
Business Case Analysis
Ver.
No,
Version
Date
Change Type
Change
Authority
Reference
X.XX.XX
DD-MM-YY
[Initial approval,
decision authority
directed change;
governance board
directed change;
minor update;
administrative
change; new major
version; other]
[Decision authority;
governance board;
integrated product
team; project lead;
other]
<<Provide name
and title>>
with conditions;
other]
[Decision authority decision
memorandum; governance
board meeting minutes;
integrated product team or
project lead or program
manager email/
memorandum]
<<Provide link to document
or document location.>>
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
1
Table of Contents
Table of Contents ................................................................................................................ 1
Executive Summary ............................................................................................................ 3
1.0 Overview ........................................................................................................................ 4
1.1 Purpose ................................................................................................................................................ 4
1.2 Problem Statement .............................................................................................................................. 4
1.3 Background and Context ...................................................................................................................... 4
1.4 Project Initiative Description and Requirement(s) ................................................................................ 4
1.5 Benefits ................................................................................................................................................ 4
1.6 Scope ................................................................................................................................................... 4
1.7 Assumptions and Constraints .............................................................................................................. 4
1.8 POCs and Roles & Responsibilities ..................................................................................................... 4
2.0 Assumptions, Constraints, and Evaluation Methodologies ...................................... 5
2.1 Costing Assumptions and Constraints ................................................................................................. 5
2.2 Non-Financial Assumptions and Constraints ....................................................................................... 5
2.3 Other Constraints ................................................................................................................................. 5
2.4 Economic Viability Assessment Methodology ...................................................................................... 5
2.5 Non-Financial Measure Scoring Methodologies .................................................................................. 5
3.0 Alternatives Considered ............................................................................................... 7
3.1 Baseline and Alternatives Overview .................................................................................................... 7
3.2 Alternative 1 (Baseline) Overview ........................................................................................................ 7
3.2.1 Cost and Economic Viability ......................................................................................................... 7
3.2.2 Requirements Summary .............................................................................................................. 8
3.2.3 Qualitative Benefits ...................................................................................................................... 9
3.2.6 Risk Summary .............................................................................................................................. 9
3.3 [Short Descriptive Name of Alternative 2] Overview .......................................................................... 10
3.3.1 Cost and Economic Viability ....................................................................................................... 10
3.3.2 Requirements Summary ............................................................................................................ 11
3.3.3 Qualitative Benefits .................................................................................................................... 11
3.3.6 Risk Summary ............................................................................................................................ 12
3.4 <Short Descriptive Name of Third Alternative> Overview ................................................................. 12
4.0 Comparison of Alternatives....................................................................................... 13
4.1 Comparison of Alternatives’ Economic Viability Measures ................................................................ 13
4.2 Comparison of Costs and Savings ..................................................................................................... 13
4.3 Comparison of Overall Requirements Satisfaction ............................................................................ 13
4.4 Comparison of Mission and Operational Benefits/Impacts ................................................................ 14
4.5 Risk Comparisons .............................................................................................................................. 14
4.6 Sensitivity Analysis (Optional) ........................................................................................................ 15
4.7 Other Considerations ......................................................................................................................... 15
5.0 Conclusions and Recommendations ....................................................................... 16
5.1 Summary Comparison and Recommendation ................................................................................... 16
5.2 Funding Needs and Sources.............................................................................................................. 16
Appendix A: Glossary ...................................................................................................... 18
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
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Appendix B: Cost Element Structure ............................................................................. 20
Appendix C: Requirements ............................................................................................. 23
Appendix D: OFF-SET Detail ........................................................................................... 26
Appendix E: Project Plan ................................................................................................. 27
Appendix F: Performance Measures .............................................................................. 28
Appendix G: Economic Viability Assessment ............................................................... 29
Appendix H: Reference Documents ............................................................................... 30
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
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EXECUTIVE SUMMARY
<<Present an executive-level overview in 1-2 pages that describes:
A validated need/requirement. (Should be substantiated with statute, regulations, policy, strategic
priorities, etc.)
Evidence that the need is not being met, including the magnitude and quantifiable measure(s) of
the problem/gap, and which mission/functional areas are affected.
The proposed project/initiative that will address this problem and the organization/person(s)
leading it; what mission outcomes, key objectives (preferably measurable) it satisfies; cost,
savings, process improvements, other benefits and overall implementation timeline.
A summary of the project/initiative’s requirements.
Boundaries/scope of the project -- what is included and excluded. (If project will be executed in
phases/spirals, identify how this BCA fits into a larger plan).
Summary of the comparison of alternatives. (Briefly describe alternatives considered and
rationale for final selection).
High level implementation strategy and key milestones (e.g., start and delivery dates).
Key assumptions and constraints foundational to the analysis (may be referenced if difficult to
summarize).
Contract vehicle(s) that could be utilized to host the proposed solution; and
For cloud outsourcing/hosting situations, include a clear statement regarding any contract issues
that impact this proposal (e.g., incorporating language into contract to mitigate known risks).
Recommendation and justification for the selected alternative.As appropriate, include a summary level
comparison chart/graph/table of status quo and primary alternatives to presenting the
recommendation.>>
<<Ke
ep information at a summary level and focus on the most important points. Reference
detailed discussion, if necessary. DO NOT EXCEED 1-2 PAGES
.>>
<< T
he executive summary should be written last to make sure the analysis supports the
recommendation rather than the other way around.>>
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
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1.0 OVERVIEW
1.1 Purpose
<<Clearly state the purpose of the Business Case Analysis (BCA), including subject, to whom submitted,
and any other clarifying information. For example:
This Business Case Analysis (BCA) for [name of business case] includes an objectively
documented analysis, comparison of alternatives and recommendation to address [describe a
critical mission need(s), requirement(s), gap(s), or problem]. It is being submitted to the [decision
authority name] for review, feedback and final decision>>
1.2 Problem Statement
<<Describe the gap/problem(s), its magnitude (i.e., which mission/functional areas, people, organizations,
processes, etc. are affected) and the primary mission or business impacts if not corrected.>>
1.3 Background and Context
<<Provide additional context that explains the current situation (e.g., policy, process, environmental
factors). Identify root causes (if known) and contributors to the observed problem(s). Include relevant
research and information on industry or market conditions as appropriate. Keep the focus strategic.>>
1.4 Project Initiative Description and Requirement(s)
<<Provide a short, high level description of the project -- what it is and what it is intended to accomplish.
Address high level requirement(s), to include: strategic aligment, mission needs, mandates, functional
needs, Data Impact Level Assessment per DoD Risk Management Framework, and DoD Cloud Security
Model and Mission Impact Assessment. Detailed requirements are provided in Appendix C. Provide key
baseline value(s), overall objectives (strategic and operational) and high level timeline (start and end
dates). Explain if objectives are to be achieved in increments.>>
1.5 Benefits
<<Describe the desired/expected outcomes, positive results, benefits, efficiencies, and cost savings of
implementing this project/program (in measureable terms if possible).>>
1.6 Scope
<<Define the project/initiative’s boundaries (e.g., technology, organizations, users, processes, functions,
etc.). Explain what it includes and excludes.>>
1.7 Assumptions and Constraints
<<Briefly explain key assumptions and constraints essential to understanding the basis of the analysis
contained in the business case. Include timeframe of fiscal years used in the analysis. If root causes
were not identified in 1.3 because they are unknown, assumptions concerning root causes should be
noted here.>>
1.8 POCs and Roles & Responsibilities
<<Include contact information for: the person and organization leading the effort, the functional and
technical experts and BCA developers who wrote or were consulted in the writing of the BCA, the
financial person/organization who/that validated the financial measures, and other persons who may be
contacted to answer questions about the BCA. Specify POC roles and responsibility in the writing of the
BCA so that any questions can be more quickly addressed. For example:
The following personnel were involved with the development of this BCA and may be contacted.>>
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
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2.0 ASSUMPTIONS, CONSTRAINTS, AND
EVALUATION METHODOLOGIES
<<Sections 2.1-2.3 below describe assumptions and constraints (financial and non-financial) critical to the
business case analysis. An assumption is an informed position about what is believed to be true for a
situation in which explicit factual knowledge is unobtainable. Examples of assumptions include:
• Extrapolation of facts from a limited data set (e.g., survey),
• Expectations of future outcomes based on historical precedence or other rationale,
• Information believed to be true based on credible authorities.
Constraints are factors that limit the analysis, possible solutions and/or expected outcomes. Examples of
constraints include:
• Availability of data and information, expertise, funding, manpower, etc.;
• Requirement to satisfy legislation, regulations, and policy;
• Technical capability of a solution.
Keep the assumptions and constraint descriptions at fairly high level. Add appendices as needed or refer
to other documents for detailed computations. Assumptions and constraints unique to specific alternatives
should be explained in Chapter 3, where each alternative is described in detail.>>
2.1 Costing Assumptions and Constraints
<<Assumptions represent a set of judgments about past, present, or future conditions postulated as true
in the absence of positive proof. Describe key costing assumptions and constraints critical to the BCA.
Define the life cycle period for the analysis, which will impact the cost estimate tables used in the BCA.
Include all applicable fiscal years within the life cycle for each Alternative. Document discount rate and
inflation rates used along with applicable dates/sources. Explain the confidence level in values and
whether they represent low-, mid- or high-range estimates. Reference where more detailed costing
information can be obtained.>>
2.2 Non-Financial Assumptions and Constraints
<<Describe non-costing related assumptions and constraints critical to the BCA. Explain why they are
important and the extent to which they could affect the analysis or project results if they change.
Examples of non-financial constraints include government mandates, technological limitations and
synchronization with other projects/initiatives. >>
2.3 Other Constraints
<<Document any additional constraints, such as schedule or budgetary constraints provided by senior
leadership direction.>>
2.4 Economic Viability Assessment Methodology
<<Explain the economic viability measurement methodology used to compare alternative solutions.>>
<<Metrics should be generated for: net present value (NPV), break-even (BE), benefit cost ratio (BCR)
and financial return on investment (ROI) using Appendix G as a guide.>>
2.5 Non-Financial Measure Scoring Methodologies
<<If the formats included in this BCA template are used, the standard language provided below may be
used and/or tailored as desired. For example:
In addition to making financial comparisons between the [current state name] and each alternative,
non-financial comparisons were also performed and scored as follows:
Requirements satisfaction: The degree to which each alternative satisfied mandatory requirements
was scored on a scale of 1 (low) to 5 (high)). Weighting was [not used/used] for high priority
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
6
requirements. [If weighting was used, explain rationale]. Specific requirements areas scored include:
[list in bullets and indicate which were weighted, as applicable].
Operational Impacts: The expected positive and negative impacts of implementing each alternative
were evaluated across the following operational/business function areas: [list: e.g., mission/business
function, interoperability, customer benefit, efficiency, information assurance/security,
reliability/quality, sustainability, etc.] and scored on a scale of -5 (negative) to +5 (positive).
Risk: Potential areas of risk for [list risk areas] were identified. The probability of occurring (certain,
probable, possible, improbable) and the impact if realized (catastrophic, high, moderate, low) were
assessed for each alternative. Risk Management strategies were identified and all risks were
rescored as if the risk management action had been implemented to assess effectiveness. >>
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
7
3.0 ALTERNATIVES CONSIDERED
3.1 Baseline and Alternatives Overview
<<Alternative 1, Baseline, Status Quo, and As Is are synonymous terms. State up front how many
additional alternatives were considered for the BCA. For example:
The following [cite number] alternatives were considered for this BCA:
• Alternative 1 – [Baseline/Status Quo/As Is] – [short description]
• Alternative 2 – [short name] – [short description]
• Alternative 3 – [short name] – [short description]
<<A minimum of three alternatives are recommended for BCA. >>
<<Consider criteria in formulating and evaluating possible alternatives to the problem. Criteria are based
on mission need and required capability from the problem statement as well as on facts, assumptions,
and the Voice of the Stakeholder or anything else that provides separation between alternatives. There
are two types of criteria: screening and selection / evaluation criteria. Screening criteria are used to
assess the viability of the alternatives, and can be used to constrain the number of alternatives to be
evaluated. Selection / evaluation criteria are developed in order to differentiate among alternatives under
consideration. Some examples of screening criteria include:>>
Screening Criteria
Definition
Suitability
Solves the problem and is legal and ethical. The alternative can accomplish
the mission within the decision-maker's intent and guidance
Feasibility Fits within available resources
Acceptability Is worth the cost or risk
Distinguishability Differs significantly from other solutions
Completeness Contains the critical aspects of solving the problem from start to finish
<<Explain very generally why the alternatives were selected (e.g., alignment to goals, feasibility, cost,
etc.) Additional detail is provided below. As appropriate, provide information on comparable projects
and/or benchmark models if available.>> For example:
These alternatives were selected because [state reason(s)]. Each of these alternatives is described
below in more detail and assessed across the following dimensions: cost, savings and economic
viability; requirements satisfaction; operational impacts; and risk. Consistent formats and scoring
methodologies were used so results can be easily compared.
3.2 Alternative 1 (Baseline) Overview
3.2.1 Cost and Economic Viability
<<Develop a life-cycle cost estimate (LCCE) by resource type (DME/O&S) and appropriation, for
Alternative 1 (baseline/status quo/As-Is state) using the cost element structure in Appendix B as a guide.
Life-cycle cost estimates for each alternative will be compared with the baseline/status quo/As-Is
estimate. Clearly state key cost/economic information for the alternative being discussed. For example:
The total cost (understood to be synonymous with Total Cost of Ownership) of this alternative is [state
cost and timeframe]. It includes Direct, Indirect, and G&A costs for [explain materiel and non-materiel
costs included]. Estimates are [explain: confidence in estimates; whether they represent high, medium, or
low values; sensitivity (see definition)].>>
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
8
<
<If the cost element structure in Appendix B is known, then the DME row in this table will equal the As-Is
Investment row from the structure in Appendix B. In the write-up, articulate the appropriations included in
the ‘Other’ rows of this table. It is acceptable to include extra rows for additional appropriations vice
summing to ‘other’.>>
<
<Apply discounting and economic analysis formulas per guidance in Appendix G to develop Economic
Viability metrics.>>
Alternative 1 - Economic Viability
Net Present Value
(NPV) =
Break Even
(Discounted) =
Benefit Cost Ratio
(BCR) =
Return on
Investment
(ROI) =
3.2.2 Requirements Summary
<< Provide a summary for how Alternative 1 satisfies requirements. For example:
This alternative satisfies [all, most, some] known requirements. Its greatest strengths are in [explain
what they are and why they are important]. Its greatest limitations are [explain what they are and why
they are an issue]. Expectations regarding how well this alternative is expected to satisfy each
requirement have been scored and provided in the table below.>>
<< Scores, weights, and justification for the assigned Weights should be developed through a
collaborative process with stakeholders and documented in this section. Sum of weights should =
100%.>>
Alternative # 1: Requirements Satisfaction
Requirement
Score
(0 to 5)
1
Weight
2
Weighted
Score
3
Score Rationale
[Describe requirement]
[Describe requirement]
Total Score
4
1. Score range is: 0 (does not meet requirement), 1 (minimally meets requirement) to 5 (greatly exceeds requirement).
2. Weighting factor for high priority requirements
3. Weighted score = “score” multiplied by “weight factor”
4. The unweighted and weighted scores are summed to establish the total score
Resource Type (DME/O&S)
Appropriation
DME 2 2 2 0 0 0 0 6
RDT&E
Procurement
O&M
Other
O&S 4 4 4 4 4 4 4 28
RDT&E
Procurement
O&M
Other
TOTAL $6 $6 $6 $4 $4 $4 $4 $34
To
Complete
LCCE
DME = Development, Modernization, or Enhancement
O&S = Operations and Sustainment
Alternative 1 (Baseline) Life Cycle Costs
(dollars in millions)
Prior
FY15
FY16
FY17
FY18
FY19
FY20
FY21
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
9
3.2.3 Qualitative Benefits
<<Clearly state the nature of any operational impacts the alternative under discussion presents.>> For example:
This alternative had [significant, moderate, minimal, no] negative
operational impacts in the areas of
[list], and [significant, moderate, minimal, no] positive benefits in the areas of [list].
<<Expand on significant issues, areas of concern and/or strengths and how they are likely to affect the
success of the project. The table below may be tailored to add/remove operational areas. For example:
Expectations regarding how this alternative will impact operations are scored below. This list is an
example, and will not apply to all projects. The operational areas must be distinct to avoid harmful
correlation.>>
Alternative 1 - Operational Benefits/Impacts
Operational Area
Score
1
Rationale
Mission/business function
Interoperability
Customer/User benefit
Efficiency
Info Assurance/Security
Reliability/ Quality
Sustainability
Other
Total Score:
NOTE 1: Scores range from -5 to +5. Negative scores of -4 or -5 are red; high positive impact scores of +4 or +5 are green.
3.2.6 Risk Summary
<<Use narrative to summarize risks. Identify risk management actions and evaluate risk before and after
risk management to determine which strategies are likely to have the most impact. Identify costs
associated with risk management actions. Include any risks associated with assumptions. For example:
This alternative has been evaluated to be [high, medium, low] risk. Areas of greatest risk were [list and
explain]. Areas of lowest risk were [list and explain]. If actions are taken to [describe risk management
actions], it is believed that risk related to [risk factor name] [could or could not] be reduced to an
acceptable level because [explain]. >>
Risk
Factor
Pre-Risk Mgmt Analysis
Risk Management Strategy
Post- Risk Mgmt Analysis
1.
Probability
2
Impact
3 Areas
Impacted
1.
Probability
2.
Impact
3. Areas
Impacted
Insufficient
Budget
Certain
Catastro
phic
C
Divide system into mandatory and
desirable features and only implement
mandatory features
Possible
Mod
C
Requirement
Change
Possible
Mod
C, P, T, S,
R
Lock down technical requirements for
spiral one on XX date
Possible
Mod
C,P,S,R
Dependency
on XXX
Possible
High
S, R, C
Focus on aspects of project that do not
depend on system xxx
Possible
Mod
C, S
[Notional Risk Analysis & Management Examples]
Risk Table Legend
1. Probability
2. Impact
3. Areas of Impact
70-100%
Certain
Project failure
Catastrophic (Cat)
Business:
Programmatic (P)
40-69%
Probable
Failure to meet major requirements, major cost
increase or schedule delay
High
IT System:
Technical (T)
5-39%
Possible
Extensive adjustments needed to meet schedule
Moderate (Mod)
Delays &
Slippages:
Schedule (S)
Near 0%
Improbable
Minor adjustments needed to meet goals
Low
Staff & Equipment:
Resources (R)
Funding Shortfall:
Cost (C)
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
10
3.3 [Short Descriptive Name of Alternative 2] Overview
<<Identify and describe the Alternative 2. Give it a short name and summarize what it is, what it includes,
and how it differs from the other alternatives. If relevant, expand upon the reasons stated above for
selecting this alternative for consideration.>>
3.3.1 Cost and Economic Viability
<< Clearly state key cost/economic information for the alternative being discussed. For example:
The total cost of this alternative is [state cost and timeframe]. It includes Direct, Indirect, and G&A
costs for [explain materiel and non-materiel costs included]. Estimates are [explain: confidence in
estimates; whether they represent high, medium, or low values; sensitivity (see definition)].>>
[Notional Data]
<< If the cost element structure in Appendix B is known, then the DME row in this table will equal the As-
Is Investment row from the structure in Appendix B. In the write-up, articulate the appropriations included
in the ‘Other’ rows of this table. It is acceptable to include extra rows for additional appropriations vice
summing to ‘other.>>
<<Calculate the difference between the Status Quo and the Alternative to estimate the cost delta between
the two Alternatives. Negative #’s will show additional cost and positive # will show cost benefit. >>
Resource Type (DME/O&S)
Appropriation
DME 2 2 2 0 0 0 0 6
RDT&E
Procurement
O&M
Other
O&S 4 4 4 4 4 4 4 28
RDT&E
Procurement
O&M
Other
TOTAL $6 $6 $6 $4 $4 $4 $4 $34
To
Complete
LCCE
DME = Development, Modernization, or Enhancement
O&S = Operations and Sustainment
Alternative 2 Life Cycle Costs
(dollars in millions)
Prior
FY15
FY16
FY17
FY18
FY19
FY20
FY21
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
11
[Notional Data]
<<Apply discounting and economic analysis formulas per guidance in Appendix G to develop Economic
Viability metrics.>>
Alternative 2 - Economic Viability
Net Present Value
(NPV) =
Break Even
(Discounted) =
Benefit Cost Ratio
(BCR) =
Return on
Investment
(ROI) =
3.3.2 Requirements Summary
<< Provide a summary for the alternative discussed. For example:
This alternative satisfies [all, most, some] known requirements. Its greatest strengths are in [explain
what they are and why they are important]. Its greatest limitations are [explain what they are and why
they are an issue]. Expectations regarding how well this alternative is expected to satisfy each
requirement have been scored and provided in the table below.>>
<<The table below, should include the key requirements>>
<< Scores and Weights should be developed through a collaborative process with stakeholders and
documented in this section. Sum of weights should = 100%.>>
Alternative # 2: Requirements Satisfaction
Requirement
Score
(0 to 5)
1
Weight
2
Weighted
Score
3
Rationale
[Describe requirement]
[Describe requirement]
Total Score
4
1. Score range is: 0 (does not meet requirement), 1 (minimally meets requirement) to 5 (greatly exceeds requirement).
2. Weighting factor for high priority requirements
3. Weighted score = “score” multiplied by “weight factor”
4. The unweighted and weighted scores are summed to establish the total score
3.3.3 Qualitative Benefits
<<Clearly state the nature of any operational impacts the alternative under discussion presents.>> For example:
This alternative had [significant, moderate, minimal, no] negative
operational impacts in the areas of
[list], and [significant, moderate, minimal, no] positive benefits in the areas of [list].
Resource Type (DME/O&S)
Appropriation
DME 2 2 2 0 0 0 0 6
RDT&E
Procurement
O&M
Other
O&S 4 4 4 4 4 4 4 28
RDT&E
Procurement
O&M
Other
TOTAL $6 $6 $6 $4 $4 $4 $4 $34
To
Complete
LCCE
DME = Development, Modernization, or Enhancement
O&S = Operations and Sustainment
Alternative 1 (Baseline) Life Cycle Costs minus Alternative 2 Life Cycle Costs
(dollars in millions)
Prior
FY15
FY16
FY17
FY18
FY19
FY20
FY21
Table will display mathtical deltas between
Alternative 1 (Baseline) and Alternative 2
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
12
<< Expand on significant issues, areas of concern and/or strengths and how they are likely to affect the
success of the project. The table below may be tailored to add/remove operational areas. For example:
Expectations regarding how this alternative will impact operations are scored below. This list is an
example, and will not apply to all projects. The operational areas must be distinct to avoid harmful
correlation.>>
Alternative 2 - Operational Benefits/Impacts
Operational Area
Score
1
Rationale
Mission/business function
Interoperability
Customer/User benefit
Efficiency
Info Assurance/Security
Reliability/ Quality
Sustainability
Other
Total Score:
NOTE 1: Scores range from -5 to +5. Negative scores of -4 or -5 are red; high positive impact scores of +4 or +5 are green.
3.3.6 Risk Summary
<<Use narrative to summarize risks. Identify risk management actions and evaluate risk before and after
risk management to determine which strategies are likely to have the most impact. Identify costs
associated with risk management actions. Include any risks associated with assumptions. For example:
This alternative has been evaluated to be [high, medium, low] risk. Areas of greatest risk were [list and
explain]. Areas of lowest risk were [list and explain]. If actions are taken to [describe risk management
actions], it is believed that risk related to [risk factor name] [could or could not] be reduced to an
acceptable level because [explain]. >>
Risk
Factor
Pre-Risk Mgmt Analysis
Risk Management Strategy
Post- Risk Mgmt Analysis
1.
Probability
2
Impact
3 Areas
Impacted
1.
Probability
2.
Impact
3. Areas
Impacted
Insufficient
Budget
Certain
Catastro
phic
C
Divide system into mandatory and
desirable features and only implement
mandatory features
Possible
Mod
C
Requirement
Change
Possible
Mod
C, P, T, S,
R
Lock down technical requirements for
spiral one on XX date
Possible
Mod
C,P, S, R
Dependency
on XXX
Possible
High
S, R, C
Focus on aspects of project that do not
depend on system xxx
Possible
Mod
C, S
[Notional Risk Analysis & Management Examples]
Risk Table Legend
4. Probability
5. Impact
6. Areas of Impact
70-100%
Certain
Project failure
Catastrophic (Cat)
Business:
Programmatic (P)
40-69%
Probable
Failure to meet major requirements, major cost
increase or schedule delay
High
IT System:
Technical (T)
5-39%
Possible
Extensive adjustments needed to meet schedule
Moderate (Mod)
Delays &
Slippages:
Schedule (S)
Near 0%
Improbable
Minor adjustments needed to meet goals
Low
Staff & Equipment:
Resources (R)
Funding Shortfall:
Cost (C)
3.4 <Short Descriptive Name of Third Alternative> Overview
<< For other alternatives, follow the same structure as above. >>
13
4.0 COMPARISON OF ALTERNATIVES
4.1 Comparison of Alternatives’ Economic Viability Measures
<<Identify the alternative(s) with the best viability. Assess overall economic viability and provide rationale,
taking into consideration: (1) degree of confidence in financial assumptions and estimates, (2) sensitivity
of the data, and (3) economic realities such as availability of funds. For example:
The most economically viable alternative is [alternative number and short name]. Its overall economic
viability is assessed as [strong, moderate, weak, not viable] based on [explain].
<<If only one alternative is being considered, there will only be one set of economic viability measures..>>
Alternative Economic Viability Comparison
Most
Viable
Alternative 2
NPV =
Discounted Payback Pd =
BCR =
ROI =
Alternative 3
NPV =
Discounted Payback Pd =
BCR =
ROI =
4.2 Comparison of Costs and Savings
<<Identify the alternative that requires the lowest overall life cycle costs (investment & O&S). For
example:
Of the [number of] alternatives considered, Alternative [number and short name] requires the lowest
overall life cycle costs. >>
Life Cycle Cost Comparison
(dollars in millions)
Prior FY15 FY16 FY17 FY18 FY19 FY20 FY21
To
Complete
LCCE
Lowest
LCC$
Alternative 1 $_ $_ $_ $_ $_ $_ $_ $_
Alternative 2
Alternative 3
<<Provide the amounts listed in the ‘Total’ line for each alternative (Sections 3.2.1, 3.3.1, etc.)>>
<<Explain the relationship between lifecycle costs and net cost increase or savings. For example:
Taking into consideration the overall lifecycle costs required and the net cost increases/savings of
each alternative, Alternative [number] is most feasible from a funding availability standpoint and
provides a [strong, moderate, or weak] financial benefit and return. If this option is implemented, status
quo costs can be reduced by [explain assumptions, amounts, and timeframes] and realigned to help
fund the alternative. Additionally, other savings not directly related to the cost of this alternative from
[explain other savings if applicable] can be applied to help offset the total cost. >>
Red
=budget/cost increase; black = budget decrease (savings)
4.3 Comparison of Overall Requirements Satisfaction
<< Compare how each alternative satisfies each requirement. Identify the alternative that best meets
overall requirements. Document all methodologies used to make the determinations. For example:
Net Cost Increase or Savings
(dollars in millions)
In millions Prior FY15 FY16 FY17 FY18 FY19 FY20 FY21
To
Complete
LCCE
Greatest
Savings
Alternative 2 $/$ $/$ $/$ $/$ $/$ $/$ $/$ $/$ $/$ $/$
Alternative 3 $/$ $/$ $/$ $/$ $/$ $/$ $/$ $/$ $/$ $/$
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
14
The [alternative number and name] most fully satisfies the statutory, functional, and technical
requirements specified for this project. Comparative results are provided below.>>
Requirements Comparison
Requirement
As Is/Alt 1
Alt 2
Alt 3
Alt 4
[Describe requirement]
[Describe requirement]
Total Score
Best
4.4 Comparison of Mission and Operational Benefits/Impacts
<<Identify the alternative that has the highest weighted operational score. For example:
[Alternative number and name] has the highest weighted operational score, particularly in the areas of
[list areas]. Comparative results are provided below.>>
Operational Benefits/Impacts If Implemented (or not Implemented)
Operational Area
Unweighted Scores
Weighted Scores
As Is/Alt 1
Alt. 2 Alt. 3 Alt.4
As Is/Alt
1
Alt.2 Alt. 3 Alt. 4
Mission/business function
Interoperability
Customer/User benefit
Efficiency
Info Assurance/Security
Reliability/ Quality
Sustainability
Other
Total Scores
Best
4.5 Risk Comparisons
<<Identify which alternative offers the lowest risk and which offers the highest risk, and whether risks
identified are considered acceptable or not acceptable after risk management efforts. For example:
Post-risk management, [Alternative number and name] appears to have the lowest risk and
[Alternative number and name] appears to have the highest risk. Considering the types of risks,
their possible impacts and probability of occurring, the risks for [Alternate with lowest risk] after risk
management actions are considered [acceptable or not acceptable]. Considering the types of risks,
their possible impacts and probability of occurring, the risks for [Alternate with highest risk] after risk
management actions are considered [acceptable or not acceptable]. The risk cubes below
summarize the risk profiles for each alternative after risk management actions.>>
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
15
<< The following risk cubes should be used, and tailored as appropriate.>>
Alternative 1 Alternative 2 Alternative 3
(Cat = catastrophic)
[Examples here are notional.]
Risk Cube Legend
Probability
Impact
Areas of Impact
70-100%
Certain
Project failure
Catastrophic (Cat)
Business
Programmatic
(P)
40-69%
Probable
Failure to meet major requirements,
major cost increase or schedule delay
High
IT system
Technical
(T)
5-39%
Possible
Extensive adjustments needed to meet
schedule
Moderate (Mod)
Delays &
Slippages
Schedule
(S)
Near 0%
Improbable
Minor adjustments needed to meet
goals
Low
Staff &
Equipment
Resources
(R)
Funding
shortfall
Cost
(C)
Contract
Issues
Business &
Secuirty (V)
4.6 Sensitivity Analysis (Optional)
<<The primary objective of Sensitivity Analysis is to determine whether the cost ranking of the alternatives
change as a result of varying certain factors. Its value lies in the additional information and understanding it
brings to bear on the decision. For decision makers facing an investment decision, sensitivity analysis is a
tool for determining how changes in costs or benefits affect the recommendation. Sensitivity Analysis
reveals how the cost estimate is affected by a change in a single assumption. It examines the effect of
changing one assumption or cost driver at a time while holding all other variables constant. By doing so, it is
easier to understand which variable most affects the cost estimate. Consult references in Appendix H for
assistance with conducting sensitivity analysis.>>
4.7
Other Considerations
<< Optional. Explain any other information not previously addressed that should be considered when
making a selection recommendation.>>
Alt 1
Probability
Improb-
able
Possible
Probable
Certain
Impact
Cat
Hig
C, S,
P, T
C
Me
C
Low
Alt 2
Probability
Improb-
able
Possible
Probable
Certain
Impact
Cat
Hig
C, R
C
Me
P S
Low
S, T
Alt 3
Probability
Improb-
able
Possible
Probable
Certain
Impact
Cat
S C
Hig
R C R
Me
S
Low
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
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5.0 CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary Comparison and Recommendation
<<Identify the alternative found to be the best option, discuss merits of each alternative and rational for
recommended alternative, with summary rationale data. For example:
After performing an analysis of the financial and non-financial benefits and risks of various
alternatives, [alternative number and name] is assessed to be the most viable option. It generates
the greatest savings [note amount and timeframe], fully satisfies all requirements, provides the
greatest operational benefits/impacts, and involves risks that, once managed, are considered
acceptable.
The following example table summarizes and compares the alternatives across financial and non-
financial dimensions.>>
Financial
Non-Financial
Overall
Comparison of
Alternatives
Best
Option
Cost
(FY15-21)
$M
Unfunded
Requirements
(Exceeds, Meets,
Not Acceptable)
Operational
Benefits
(Significant, Moderate, Low,
None)
Managed Risk
(Low, Med,
High,
Break
Even
Savings
(FY15-21)
$M
NPV BCR ROI
(FY15-21)
$M
Alternative 1
(As-Is)
N/A N/A N/A N/A N/A N/A
Alternative 2
Alternative 3
5.2 Funding Needs and Sources
<<Identify the total funding required for the recommended alternative. For example:
The table below identifies the total funding required for the recommended alternative as presented in
the alternatives “Cost” section. It includes costs for materiel [list] and non-materiel [list] requirements.
>>
<<If deltas exist between the ‘Total Requirement’ and amounts currently programmed/budgeted,
identify all off-sets required to fully fund the alternative. Provide additional off-set details in Appendix
D.>>
<<I
f additional funding is required, explain logical funding sources based on expected cost
savings/avoidance. As necessary, provide additional detail re: reprogramming actions in Appendix D. For
example:
This project is expected to generate cost avoidance in the amount of [amount and timeframe] from
[describe the efficiency that creates the cost avoidance]. To cover the remaining unfunded costs,
funding equal to the cost avoidance could be recouped through budget marks against [state logical
source (provide APPN, BA, PE, BLI, and UII)]. If this is done, the final net unfunded amount for this
initiative would be [state amount].>>
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
17
Funding Required/Available
(dollars in millions)
To
Prior FY15 FY16 FY17 FY18 FY19 FY20 FY21 LCC
Complete
Total Required
RDT&E
Procurement
O&M
Other
Currently Programmed/Budgeted
RDT&E
Procurement
O&M
Other
Unfunded Requirements (UFR)
RDT&E
Procurement
Net Unfunded will display mathtical deltas between
O&M
'Total Requirement' and 'Currently Programmed/Budgeted'
Other
Off-sets from Reprogramming
RDT&E
Procurement
Off-Sets from Reprogramming can only correct execution year UFRs.
O&M
Other
Off-sets from POM/PBR
RDT&E
Procurement
O&M
Other
Off-sets from Cost Savings/Avoidance
RDT&E
Procurement
O&M
Other
Final NET Unfunded
RDT&E
Procurement
Final NET Unfunded will display mathtical deltas between
O&M
'NET Unfunded' and 'Off-sets'
Other
POM - Component Program Objectives Memorandum
PBR - DoD Program and Budget Review
NOTE: Investment (Invest.)” reflects all one-time/non-recurring costs, regardless of appropriation expected to be incurred to
implement the preferred alternative. Consists of sustainment costs incurred from the initial system deployment
through the end of system operations. Includes all costs of operating, maintaining, and supporting a
fielded system. Specifically, this consists of the costs (organic and contractor) of personnel, equipment,
supplies, software, and services associated with operating, modifying, maintaining, supplying, and
otherwise supporting a system in the DoD inventory.
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
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APPENDIX A: GLOSSARY
<<These definitions may be augmented/changed as needed to support a particular BCA.>>
Term
Description
Analysis of
Alternatives
Evaluation of different choices available for achieving an objective, usually requiring a
cost benefit analysis, life cycle costing and sensitivity analysis.
Assumption
An assumption is an informed position about what is believed to be true for a situation
where explicit factual knowledge is unobtainable.
Baseline
A description of the beginning condition in measureable terms and a start date from
which progress can be measured. Synonymous with As Is and Status Quo.
Benefit-Cost Ratio
(BCR)
BCR is the index resulting from dividing discounted benefits (savings/cost avoidances)
by discounted investment. Therefore, an initiative must have a BCR > 1.0 to be
considered financially viable.
Break Even (B-E)
The fiscal year in which the initiative “breaks-even” based on discounted cash flows,
i.e., the point at which the Net Present Value (NPV) becomes positive.
Business Case
A comparative analysis that presents facts and supporting details among competing
alternatives. It should be unbiased by considering all possible alternatives and should
not be developed solely for supporting a predetermined solution.
Constraint
Constraints are factors known or discovered that are expected to limit the analysis,
possible solutions and/or expected outcomes.
Cost Savings
A reduction in costs below the projected (i.e., budgeted) level as a result of a specific
initiative. Because cost savings are a reduction in the level of budgeted costs, savings
are available to be recouped from the budget.
Cost Avoidance
A reduction in future unbudgeted costs that cannot be recouped from the budget. A
cost avoidance in current budgeted years (FYDP) may also result due to increased
productivity or other previously unrealized benefits.
Data
Characterization
Per the Cloud Security Model. Level 1 = Unclassified publicly releasable. Level 2 =
Unclassified publicly releasable with access controls, all FOIA releasable data,
information open to public even if it requires a login, low risk, non-sensitive PII. Level 3
= Controlled Unclassified Information – low confidentiality impact, moderate integrity
impact. Level 4 = Controlled Unclassified Information – Moderate confidentiality impact,
moderate integrity impact, moderate level PII. Level 5 = Moderate confidentiality impact,
Moderate integrity impact but Mission essential, critical infrastructure (military or
civilian), deployment and troop movement, ITAR data, unclassified nuclear data, Trade
Secrets Act data, sensitive PII (medical/HIPAA, personnel, legal, law enforcement,
biometric). Level 6 = Classified information up to and including SECRET – Moderate
confidentiality impact, Moderate integrity impact e.g., C2 systems, email systems.
Data Impact Level
Assessment
A determination of the potential impact (Low, Moderate, or High) to the mission that
would result from loss of confidentiality, integrity, and availability if a security breach
occurs, IAW the DoD Risk Management Framework.
Development
Modenization
Enhancement
(DME)
Development, Modernization and Enhancement refers to projects and activities leading
to new IT assets/systems, as well as projects and activities that change or modify
existing IT assets to substantively improve capability or performance, implement
legislative or regulatory requirements, or meet an agency leadership request. DME
activity may occur at any time during a program’s life cycle. As part of DME, capital
costs can include hardware, software development and acquisition costs, commercial
off-the-shelf acquisition costs, government labor costs, and contracted labor costs for
planning, development, acquisition, system integration, and direct project management
and overhead support.
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
19
Direct
Direct costs include costs for hardware, software, communications, labor (sys admin,
app spt, help desk, storage admin, data admin, security, hosting), and Enterprise Svc
Mgmt/Net Ops.
DOTMLPF
The DOTMLPF acronym is defined by the CJCSI 3170.01G -Joint Capabilities
Development System (JCIDS) as: doctrine, organization, training, materiel, leadership
and education, personnel and facilities. JCIDS requires all DOTMLPF aspects (materiel
and non-materiel) be considered when developing a solution/recommendation.
G&A
General & Administrative costs include costs for internally controlled (personnel &
related costs, HW/SW requirements to support headquarters functions, Admin LAN) and
external agreements.
Goal
A description of the desired/expected end-state condition.
Indirect
Indirect costs include costs for hosting infrastructure (facility repairs/improvements,
conditioned power, full uninterrupted power supply, generated power, heat ventilation &
air conditioned services, electric/water/sewage, garbage, and physical security), Field
Security Operations, personnel & related costs.
Information System
All DoD-owned or -controlled systems that receive, process, store,
display or transmit DoD information, regardless of mission assurance category,
classification or sensitivity.
Investment funds
Funding used for non-recurring costs to upgrade, refresh, or modernize existing
systems/processes, or new developments.
Mission Impact
Assessment
A determination of the mission impact relative to the overall mission of the Department
to wage war and defend the nation. Systems/applications that may be of high
importance to the specific mission they serve, but are of low impact to the DoD mission,
allows different security profiles to be chosen for those systems
Net Present Value
(NPV)
NPV is the difference between discounted benefits and discounted costs (i.e.,
discounted savings/cost avoidances less discounted costs). An initiative must have an
NPV > 0.0 to be considered financially viable.
Operating &
Sustainment (O&S)
Operations & Sustainment Costs refers to the expenses required to operate and sustain
an IT asset that is operating in a production environment. O&S costs include costs
associated with operations, maintenance activities, and maintenance projects needed to
sustain the IT asset at the current capability and performance levels. It includes Federal
and contracted labor costs, corrective hardware and software maintenance, voice and
data communications maintenance and service, replacement of broken or obsolete IT
equipment, overhead costs, and costs for the disposal of an asset. Also commonly
referred to as steady state, current services and operations & maintenance..
Operating &
Support (O&S)
All costs to sustain the system/project after it has been released to production (i.e., after
deployment or upon achievement of Full Operational Capability (FOC).
Return on
Investment
A performance measure used to evaluate the efficiency of an investment or to compare
the efficiency of a number of different investments. To calculate ROI, the benefit (return)
of an investment is divided by the cost of the investment.
Sensitivity Analysis
A technique used to determine how different values of an independent variable will
impact a dependent variable under a given set of assumptions. It is particularly
important to test sensitivity if it is likely the actual outcome will differ from assumptions.
Sunk Costs
Money already spent and permanently lost (past opportunity costs). Generally
considered irrelevant to future decision-making.
Target
Expected/planned progress in quantifiable terms towards a specific end-state.
Total Cost of
Ownership
Life cycle cost of a system, including all development, acquisition, and operations and
support costs.
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
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APPENDIX B: Cost Element Structure
<< This appendix provides example cost element structures that can be tailored for each unique
situation.>>
<<As Is 2d Level Cost Element Structure. As Is is synonymous with Alternative 1/baseline/status quo.
>>
CES # Cost Element Name Definition
As Is
Life cycle cost estimate for As Is systems relevant to the To Be Investment under consideration..
1 As Is Investment
Cost estimate for non-recurring efforts of currently funded initiatives relevant to the To Be Investment under consideration.
1.1
Program Management
Cost estimate for Program Management activities for any currently funded efforts relevant to the To Be Investment under
consideration. Program Management is defined as business and administrative planning, business process re-engineering,
change management, organizing, directing, coordinating, and controlling actions designated to accomplish overall program
objectives which are not associated with specific hardware elements and are not included in systems engineering. Includes
fully burdened Military, Civilian, and Contractor personnel costs, travel costs, and other relevant costs.
1.2
Concept Exploration
Cost estimate for all costs for concept explorations of currently funded initiatives relevant to the To Be Investment under
consideration. Includes costs for study, analysis, design development, and test involved in investigating alternative methods of
delivering prototype(s) or end item(s).
1.3
System Development
Cost estimate for all non-recurring costs for currently funded initiatives for development of system relevant to the To Be
Investment under consideration. Includes fully burdened costs of military, civilian, and contractor personnel. Includes
development hardware and software, Sys T&E, and IV&V.
1.4
System Procurement
Cost estimate for procurement of operational systems developed through currently funded initiatives relevant to the To Be
Investment under consideration. Includes hardware and software for prime mission product and COOP elements.
1.5
Data Center Investment
Cost estimate for investment, or lease in lieu of investment, required by any outsource support provider as required for the
system to attain and maintain FOC. Includes Capital Investment and Leasing.
1.6
Sys Initiation,
Implementation, Fielding
Cost estimate for activities required to train first users of the operational system developed through currently funded initiatives
relevant to the To Be Investment under consideration. Includes initial training, system integration/site test acceptance, and
engineering changes.
1.7
Upgrade/Pre-Planned
Product Improvement
Cost estimate for element currently funded planned enhancements to As Is systems relevant to the To Be Investment under
consideration.
2 As Is O&S
Cost estimate for all activities to operate and sustain As Is systems that will remain fully operational throughout the timeframe of
the analysis. Includes the cost to manage and maintain prime mission product hardware and software. Includes fully burdened
military, civilian, and contractor personnel and travel costs associated with system manaagement. Includes tech/life cycle
refresh and maintenance of wide area network, local area network, security architecture and data centers. Includes software
operations and support, assurance, and licenses of application, COTS, database, NETOPS, GOTS, and Data Center software.
Includes Unit/Site Operations, including labor associated with systems administration, storage administration, database
administration, service desk, application support, utilities, facilities, longhaul and intrabase communications, recurring training.
Includes security costs such as base/site security/ field security operations, and certification and accreditaiton. Includes
application hosting costs for services such as DISA enterprise services, DISA MilCloud, Commerical Cloud, and Private Cloud.
2.1
System Management
Cost estimate for activities such as business and administrative planning, business process re-engineering, change
management, organizing, directing, coordinating, and controlling As Is systems relevant to the To Be Investment under
consideration. Does not include objectives associated with specific hardware/software elements or systems engineering.
2.2
Annual Operations
Investment / Life Cycle
Refresh
Cost estimate for all replacement components, replenishment spares, supplies and consumables required over the life cycle of
As Is systems relevant to the To Be Investment under consideration. Includes WAN, LAN, Security Architectures, and Data
Center systems. Includes prime mission product and COOP elements.
2.3
Hardware Maintenance
Cost estimate for all labor and material required to restore As Is system hardware to specified performance standards and
prevent system malfunctions. Includes WAN, LAN, Security Architectures, and Data Center systems. Includes prime mission
product and COOP elements.
2.4
Software O&S
Cost estimate for all labor and material required to restore As Is system software to specified performance standards and
prevent system malfunctions. Includes WAN, LAN, Security Architectures, and Data Center systems.
2.5
Unit/Site Operations
Cost estimate for all day to day operations of the As Is system. Includes technical personnel performing system management
functions. Includes systems administration, storage administration, database administration, service desk, and application
support. Includes utility and facility costs. Includes long haul and intrabase communications. Includes recurring training costs.
2.6
Security
Cost estimate for all labor and material involved in reducing risk of physical and logical damage to the As Is system from outside
actors. Includes base/site security, field security operations, and certification and accreditation.
2.7
Application Hosting
Cost estimate for services performed by data centers that host applications in the As Is state.
enterprise hosting, DISA MilCloud, Commercial Cloud, and Private Cloud hosting.
Includes services such as DISA
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
21
<<Alt n 2-Level Cost Element Structure. To Be is synonymous with Alt n. It may be necessary to tailor a
cost element structure for each Alternative to the status quo>>
CES #
Cost Element Name Definition
Alt n
Life cycle cost estimate for the To Be state. Includes an Investment phase to implement a new system, a new To Be state
operations and support cost, and phase out costs for As Is systems that will be replaced, retired, or divested as a result of the
To Be Investment.
1
Alt n Investment
Cost estimate for non-recurring efforts relevant to the To Be Investment.
1.1
Program Management
Cost estimate for Program Management activities for any currently funded efforts required to implement the To Be Investment.
Program Management is defined as business and administrative planning, organizing, directing, coordination, controlling, and
approval actions designated to accomplish overall program objectives which are not associated with specific hardware elements
and are not included in systems engineering. Includes fully burdened Military, Civilian, and Contractor personnel costs, travel
costs, and other relevant costs.
1.2
Concept Exploration
Cost estimate for all costs of concept explorations for the To Be Investment. Includes costs for study, analysis, design
development, and test involved in investigating alternative methods of delivering prototype(s) or end item(s).
1.3
System Development
Cost estimate for all non-recurring costs for the To Be Investment. Includes fully burdened costs of military, civilian, and
contractor personnel. Includes development hardware and software, Sys T&E, and IV&V.
1.4
System Procurement
Cost estimate for procurement of operational systems developed through the To Be Investment.
for prime mission product and COOP elements.
Includes hardware and software
1.5
Data Center Investment
Cost estimate for investment, or lease in lieu of investment, required by any outsource support provider as required for the To
Be system to attain and maintain FOC. Includes Capital Investment and Leasing.
1.6
Sys Initiation,
Implementation, Fielding
Cost estimate for activities required to train first users of the To Be operational system.
integration/site test acceptance, and engineering changes.
Includes initial training, system
1.7
Upgrade/Pre-Planned
Product Improvement
Cost estimate for pre-planned enhancements to the To Be system.
2
Alt n O&S
Cost estimate for all activities to operate and sustain the To Be system that will remain fully operational throughout the timeframe
of the analysis. Includes the cost to manage and maintain prime mission product hardware and software. Includes fully
burdened military, civilian, and contractor personnel and travel costs associated with system manaagement. Includes tech/life
cycle refresh and maintenance of wide area network, local area network, security architecture and data centers. Includes
software operations and support, assurance, and licenses of application, COTS, database, NETOPS, GOTS, and Data Center
software. Includes Unit/Site Operations, including labor associated with systems administration, storage administration,
database administration, service desk, application support, utilities, facilities, longhaul and intrabase communications, recurring
training. Includes security costs such as base/site security/ field security operations, and certification and accreditaiton.
Includes application hosting costs for services such as DISA enterprise services, DISA MilCloud, Commerical Cloud, and
Private Cloud.
2.1
System Management
Cost estimate for activities such as business and administrative planning, organizing, directing, coordinating, and controlling the
To Be system that does not include objectives associated with specific hardware/software elements or systems engineering.
2.2
Annual Operations
Investment/LCR
Cost estimate for all replacement components, replenishment spares, supplies and consumables required over the life cycle of
the To Be system. Includes WAN, LAN, Security Architectures, and Data Center systems. Includes prime mission product and
COOP elements.
2.3
Hardware Maintenance
Cost estimate for all labor and material required to restore To Be system hardware to specified performance standards and
prevent system malfunctions. Includes WAN, LAN, Security Architectures, and Data Center systems. Includes prime mission
product and COOP elements.
2.4
Software O&S
Cost estimate for all labor and material required to restore To Be system software to specified performance standards and
prevent system malfunctions. Includes WAN, LAN, Security Architectures, and Data Center systems.
2.5
Unit/Site Operations
Cost estimate for all day to day operations of the To Be system. Includes technical personnel performing system management
functions. Includes systems administration, storage administration, database administration, service desk, and application
support. Includes utility and facility costs. Includes long haul and intrabase communications. Includes recurring training costs.
2.6
Security
Cost estimate for all labor and material involved in reducing risk of physical and logical damage to the To Be system from
outside actors. Includes base/site security, field security operations, and certification and accreditation.
2.7
Application Hosting
Cost estimate for services performed by data centers that host applications in the To Be state.
enterprise hosting, DISA MilCloud, Commercial Cloud, and Private Cloud hosting.
Includes services such as DISA
<<Alt n C
ost Element Structure continued on next page>>
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
22
<<Al
t n Cost Element Structure continued>
Cost estimate for all activities to operate and sustain As Is system that will be replaced, retired, and/or divested as a result of the
To Be Investment. Includes the cost to manage and maintain prime mission product hardware and software. Includes fully
burdened military, civilian, and contractor personnel and travel costs associated with system manaagement. Includes tech/life
cycle refresh and maintenance of wide area network, local area network, security architecture and data centers. Includes
software operations and support, assurance, and licenses of application, COTS, database, NETOPS, GOTS, and Data Center
software. Includes Unit/Site Operations, including labor associated with systems administration, storage administration,
database administration, service desk, application support, utilities, facilities, longhaul and intrabase communications, recurring
training. Includes security costs such as base/site security/ field security operations, and certification and accreditaiton.
Includes application hosting costs for services such as DISA enterprise services, DISA MilCloud, Commerical Cloud, and
Private Cloud.
3 Alt n Phase Out O&S
Cost estimate for activities such as business and administrative planning, organizing, directing, coordinating, and controlling the
As Is system that will be replaced, retired, and/or divested as a result of the To Be Investment. that does not include objectives
associated with specific hardware/software elements or systems engineering.
3.1 System Management
Cost estimate for all replacement components, replenishment spares, supplies and consumables required over the life cycle of
the As Is system that will be replaced, retired, and/or divested as a result of the To Be Investment. Includes WAN, LAN,
Security Architectures, and Data Center systems. Includes prime mission product and COOP elements.
Annual Operations
Investment/LCR
3.2
Cost estimate for all labor and material required to restore the As Is system that will be replaced, retired, and/or divested as a
result of the To Be Investment hardware to specified performance standards and prevent system malfunctions. Includes WAN,
LAN, Security Architectures, and Data Center systems. Includes prime mission product and COOP elements.
3.3 Hardware Maintenance
Cost estimate for all labor and material required to restore As Is system that will be replaced, retired, and/or divested as a result
of the To Be Investment software to specified performance standards and prevent system malfunctions. Includes WAN, LAN,
Security Architectures, and Data Center systems.
3.4 Software O&S
Cost estimate for all day to day operations of the As Is system that will be replaced, retired, and/or divested as a result of the To
Be Investment.. Includes technical personnel performing system management functions. Includes systems administration,
storage administration, database administration, service desk, and application support. Includes utility and facility costs.
Includes long haul and intrabase communications. Includes recurring training costs.
3.5 Unit/Site Operations
Cost estimate for all labor and material involved in reducing risk of physical and logical damage to the As Is systems that will be
replaced, retired, and/or divested as a result of the To Be Investment from outside actors. Includes base/site security, field
security operations, and certification and accreditation.
3.6 Security
Cost estimate for services performed by data centers that host applications in the As Is systems that will be replaced, retired,
and/or divested as a result of the To Be Investment. Includes services such as DISA enterprise hosting, DISA MilCloud,
Commercial Cloud, and Private Cloud hosting.
3.7 Application Hosting
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
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APPENDIX C: REQUIREMENTS
<<This appendix provides additional detail regarding requirements, including those resulting from the
DOTMLPF analysis, lean six sigma and business process reengineering efforts, and change
management planning. Additional detail is expected to be added to this appendix over the duration of the
project as more information is known and requirements can be more clearly defined.>>
<<Clearly state the analyses performed, information sources and benchmarks used, etc. For example:
A DOTMLPF
1
, process reengineering and other analyses were performed to identify the materiel and
non-materiel requirements for this [project, acquisition, investment]. Information collected from [name
of Stakeholder/ User Group forum] comprised of [identify areas of expertise and/or organizations that
participated] that met from [dates] was used to determine functional requirements. Information from
lean six sigma projects conducted by [state who and when] was used to identify current process root
cause issues. Operations at [give example] were used as benchmarks to determine labor and other
non-materiel requirements. Materiel and technical requirements were gathered from [sources].
General requirements are summarized below.>>
Statutory, Regulatory and other Compliance Requirements
<<Identify any statutory, regulatory, compliance requirements and/or organizational strategic goals and
objectives this project/initiative must satisfy. Include as a reference all known statutory and regulatory
requirements, specific to the IT functional area, known at the time of publishing. Include Enterprise
Architecture and Information Assurance requirements as applicable.>>
Functional Requirements
<<Summarize functional requirements. Focus particularly on requirements necessary to achieve desired
outcomes and measureable performance objectives. >>
Materiel, Technical and Interface/Data Exchange Requirements
<<Summarize general materiel requirements (e.g., equipment, hardware, software, apparatus, and
supplies of the project), related technical requirements and interface/data exchange requirements to the
level of detail needed to do a valid comparison of alternatives. A summary table may be appropriate. All
material requirements associated with Direct, Indirect and G&A costs need to be included. Material
requirements associated with Direct costs include hardware, software, and communications. Material
requirements associated with Indirect costs include Hosting infrastructure (facility repairs/improvements,
conditioned power, full uninterrupted power supply, generated power, heat ventilation & air conditioned
services, electric/water/sewage/garbage, physical security). Material requirements associated with G&A
costs include hardware and software requirements to support headquarters functions and External
Agreements. >>
1
CJCSI 3170.01G Joint Capabilities Integration and Development System of 7 Mar 2011 requires, military planners to perform an analysis of needs
associated with doctrine, organizational changes, training, materiel requirements, leadership and education, personnel and/or facilities – referred to as
a DOTMLPF analysis -- before authorizing a new course of action. The DOTMLPF analysis results are reflected in this business case in various
sections including: the scope, requirements, operational impacts, risks, key enablers, project plan, deliverables and life cycle costs.
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
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Labor, Contractor Support and Non-Materiel Requirements
<<Summarize non-materiel requirements (e.g., doctrine/policy/guidance, organizational changes, training
requirements, new governance/leadership activities, new/matrixed personnel requirements and skills, and
facilities) necessary to ensure success of the project. All labor requirements associated with Direct,
Indirect and G&A costs need to be included, including Military, Civilian and Contractor labor costs. Labor
costs include systems administration, application support, help desk, storage administration, data
administration, security, hosting, and Enterprise Service Management/Network Operations
If critical requirements have been excluded from the scope of the BCA, they should be identified and the
rationale for not including them explained. Ensure the project scope and the cost estimates of the
alternatives correctly reflect both materiel and non-materiel requirements. >>
Process Reengineering Requirements
<<Explain process reengineering efforts and identify which requirements listed above correct “as-is”
process weaknesses/gaps to create a streamlined and more efficient solution. >>
Data Impact Level Assessments
DoD Data Characterization within the 6 levels of the Cloud Security Model for Data Impact
Level Assessment:
Level 1:
Unclassified publicly releasable information; e.g., recruiting websites.
Level 2:
Unclassified publicly releasable information, with access controls, all FOIA releasable data,
information open to the public even if it requires a login, low risk, non-sensitive PII (name,
business or personal address, phone, and email);
e.g., morale systems or library systems.
Lev
el 3:
Controlled Unclassified Information (CUI) – Low confidentiality impact, Moderate integrity
impact,
Non-Appropriated Fund (NAF) data that does not include health or legal data, and
educational systems that fall under The Family Educational Rights and Privacy Act (FERPA),
contracting data that does not contain Trade Secrets Act information;
e.g., training systems.
.
Lev
el 4: Controlled Unclassified Information (CUI) – Moderate confidentiality impact, Moderate integrity
impact, moderate level PII (social security numbers, alien ID and other immigration documents,
passport numbers, driver’s license numbers, VIN numbers, and license plates),; e.g., HR
systems
Level 5: NSS CUI – Moderate confidentiality impact, Moderate integrity impact but Mission essential,
critical infrastructure (military or civilian), deployment and troop movement, ITAR data,
unclassified nuclear data, Trade Secrets Act data, and sensitive PII (medical/HIPAA, personnel,
legal, law enforcement, and biometric data)
Level 6: Classified information up to and including SECRET – Moderate confidentiality impact, Moderate
integrity impact e.g., C2 systems, email systems.
Mission Impact Assessment
In addition to the characterization of data within the 6 levels of the cloud security model, the impact of a
particular mission or business function on the overall mission of the Department is another factor that
can influence the risk management process.
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
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The overall mission of the Department of Defense is to provide the military forces needed to deter war
and to protect the security of our country. The following Mission Impacts are defined relative to the
DoD’s overall mission.
Mission Impact - High
A compromised mission is expected to have a high impact on DoD's overall mission to deter war and
protect the security of our country e.g., DoD missions and operations continue under any cyber situation
or condition.
Mission Impact - Moderate
A compromised mission is expected to have a moderate impact on DoD's overall mission to deter war
and protect the security of our country.
Mission Impact - Low
A compromised mission is expected to have a low impact on DoD's overall mission to deter war and
protect the security of our country.
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APPENDIX D: OFF-SET DETAIL
Funding Requirements
<<Describe total funding required and available via below threshold reprogramming (BTR), above
threshold reprogramming (ATR), or POM/PBR sources for the recommended alternative.
Reprogramming actions should only be used to correct execution year shortfalls.Provide details in the
below format. >>
<
<In the ‘Action Required’ column, using the codes below, indicate how the off-set will be resourced.
• ‘BTR’ – Below Treshold Reprogramming action
• ‘ATR’ – Above Treshold Reprogramming action
• POM/PBR – DoD programming/budget action during the Component POM or DoD Program
Budget Review processes. >>
<<Articulate the risks of Off-set and reprogramming actions not being approved. If not approved, what is
the strategy for this alternative going forward?>>
APPN BA PE BLI UII Prior FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
To
Complete
LCCE
Action
Required
APPN BA PE BLI UII Prior FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
To
Complete
LCCE
Total
Off-Sets or Reprogramming Actions
(dollars in millions)
Total
Current 'As-Is' Program
(dollars in millions)
APPN BA PE BLI UII Prior FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
To
Complete
LCCE
BLI - Budget Line Item
UII - Unique Invetment Identifier from DITIP/SNaP-IT
'To-Be' Program
(dollars in millions)
APPN - Appropriation
BA - Budget Activity
PE - Program Element
Total
Sum of 'As-Is' Program and
Off-set/Reprogramming Sources
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
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APPENDIX E: PROJECT PLAN
<< This appendix includes a detailed project plan or a link to it. This section will change over the course of
the project and is mandatory after initial BCA approval.>>
Implementation Plan and Deliverables
<<Provide a high level implementation plan that includes key deliverables and milestones. For example:
A high-level Implementation Plan with major deliverables and key milestones is provided below.
Consider scheduling for development and approvals of change management plan, stakeholder plan,
communications plan, and training plan. A more detailed plan will be developed within [number] days
after initial approval from the [decision authority name] and will be appended to this document in
Appendix E. Guidance on Work Breakdown Structure can be found in MILSTD 881..>>
Implementation Plan for FY20XX
Deliverables (D) & Milestones (MS)
Date Due
Qtr2
Qtr 3
Qtr 4
FY15
FY16
Beyond
D
Charter
X
D
POAM
X
D
Develop standard process
X
D
Develop draft policy
X
MS
FOC
X
[Notional Example]
Key Enablers and Leadership Support
<< If there are any specific decisions/actions required of leadership to ensure the project’s success,
identify them in this section (e.g., governance changes, dependencies on other projects, new policies or
process improvements that require other organizations’ buy-in/support, major change management
obstacles, critical risk management activities, etc.) For example:
The following areas require [decision body’s name] attention and support in order to ensure the
success of this project: [list areas]. >>
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APPENDIX F: PERFORMANCE MEASURES
<<Provide additional detail explaining how the performance measure baseline values were calculated and
why certain targets and goals were established. If there are dependencies between the measures,
explain them. For example, goals for “speed” may have negative impacts on “quality.” Likewise, goals for
“cost savings” may negatively affect “customer service.” Where dependencies exist, measures for both
attributes should be collected and monitored. Explain how the measures data will be collected, who is
responsible for collecting/reporting them, how often they will be collected, and where the information will
be stored. Measures information will be updated over the course of the project and most likely will not be
fully developed at time of initial approval.>>
<<NOTE: Measures to track progress during project execution are probably different than measures used
to assess project success after delivery.>>
<<Measures should clearly
relate to strategic/mission requirements, desired outcomes, benefits, timeframe,
costs, and savings. For example: Performance measures in the table below will be used to track and
assess project progress. These measures were selected because [explain why these measures were
selected and if additional measures will be added in the future]. Additional detail can be shown in table
similar to the example below.>>
Performance Measures
Strategic
Goal/Outcome
Related Measure
Baseline Amt
and Date
Goal at FOC
and Date
Target Amt
and Date
Measure
Frequency
Org
Lead
Reduce costs
Reduce total cost of
_____ by 10%
$7M (as of___)
$6.3M by ___
$6.8M by____
Annually
Improve decision
support
Reduce % of records
with data errors by 50%
Monthly
DOD ENTERPRISE IT BUSINESS CASE ANALYSIS TEMPLATE
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APPENDIX G: ECONOMIC VIABILITY ASSESSMENT
Calculation of Economic Viability metrics for each alternative will require application of discounting the
change in Net Cost Increase or Savings for each year with a discount factor that varies by year per one of
the formulas below. The current discount rate is found on OMB Circular A-94 Appendix C,
http://www.whitehouse.gov/omb/circulars_a094/a94_appx-c
Mid-y
ear discount factor: F=1/((1+R)^(Y-.5)), where F is the discount factor, R is the discount
rate written as a decimal, and Y is the sequence number of the year in question, beginning at
program inception. The formula produces a unique factor for each year in an analysis. Mid-year
discounting applies when costs and benefits occur in a steady stream.
Mid-
monthly discount factor: For analyses of short periods, monthly factors may be more
appropriate: F = 1/(RM^(M-.5)), where F is the discount factor, M is the sequence number of the
month in question, and RM is the discount rate on a monthly basis, i.e., the 12th root of (1+R), or
RM = (1+R)^(1/12).
End-
of-year discount factor: F=1/((1+R)^(Y)), where F is the discount factor, R is the discount
rate written as a decimal, and Y is the sequence number of the year in question, beginning at
program inception. End-of-year discounting applies when costs and benefits occur as lump sums at the
beginning of the year
NPV (Net Present Value) = Discounted Benefits – Discounted Costs
Ben
efit Cost Ratio (BCR) = Discounted Benefits / Discounted Investment Costs
Ret
urn On Investment (ROI) = (Discounted Benefits – Discounted Investment Costs) / Discounted
Investment Costs
The break-even point, or payback, is the point (e.g., number of years or fractional years) at which the
cumulative costs (investment plus sustainment) of two alternatives are equal. At this point the savings in
current dollars from the comparison of alternatives will equal the investment in current dollars (Sunk
costs are not considered in the computation.). The break-even point is computed using a comparison of
costs between alternatives which identifies cumulative savings. Breakeven analysis is normally performed
using undiscounted current dollars. Break-even analysis is most commonly used in decision making when
projects are high risk, and it is desirable to recover investment costs quickly, or when it is desirable for
political reasons to quickly generate economic benefits.
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APPENDIX H: REFERENCE DOCUMENTS
Clinger-Cohen Act
OMB Cir No. A-94, OMB Guidelines and Discount Rates for BCA for Federal Programs
GAO Cost Estimating and Assessment Guide, Chapter 14, Cost Risk and Uncertainty, Chapter 13,
Sensitivity Analysis, http://www.gao.gov/new.items/d093sp.pdf
DoDD 5000 Series
DoDI 7041.3
DoDD 8120.1
DoD Acquisition Risk Management Guide
DoD Product Support BCA Guidebook
AFI 65-509, Business Case Analysis
http://static.e-publishing.af.mil/production/1/saf_fm/publication/afi65-509/afi65-509.pdf
AFMAN 65-510, Business Case Analysis Procedures
http://static.e-publishing.af.mil/production/1/saf_fm/publication/afman65-510/afman65-510.pdf
Army CBA Guide, pg 64 Sensitivity
Analysis, http://asafm.army.mil/Documents/OfficeDocuments/CostEconomics/guidances/cba-gd.pdf
Army Economic Analysis Manual, Appendix H, Discounting example,
https://acc.dau.mil/adl/en-US/46515/file/13820/CEAC%20Econ%20Anal%20Manual%20Feb%2002.pdf
DON Economic Analysis Guide, Chapter 9, Uncertainty and Risk
Analysis, https://www.ncca.navy.mil/references.cfm
SECDEF Memo of 27 Dec 2010, Subject: Consideration of Costs in DoD Decision-Making
(http://www2.dla.mil/j-6/dlmso/Archives/Finance/meetings/13Mar12/OSD14152-10-Cost-Memo.pdf
)
<< Al
so add references to support documentation used to prepare the BCA. Supporting documentation
examples can include files that capture the cost data, calculations, methodology and data references that
were used to create the estimate. It can also include concept of operations, requirements documentation,
implementation/transition plans, stakeholder plan, communications plan, acquisition strategies,
maintenance concepts, technological assumptions, procurement schedules, fielding schedules, software
release schedules, product support plans, lifecycle support plans, etc >>
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DEPARTMENT OF DEFENSE
B
USINESS CASE ANALYSIS