This kind of government support is particularly crucial to a university in Canada, where private donations are rare. But the method is equally useful for addressing the issues facing American universities and private industry, because a business case addresses universal goals:

"We want a successful project on time, on budget, quality ensured, really happy clients, and sustainable facilities that will last us a hundred years," says Elizabeth Dechert, director of strategic planning for the University of Alberta.

The problems of reaching those goals are universal, as well: "Our budgets are always too small," says Dechert. "The scope creeps, especially when we let our scientists design our laboratories. Project costs run out of control because of it. We end up with compromised quality, ultimately unhappy clients, and definitely unmet expectations."

The solution? "We plan long and hard," she says. "It is easy to make a decision and change it in the planning stages because it is free. Business case analysis brings a sense of order to the process."

Making the Case for a Business Case

The main campus of the University of Alberta in Edmonton serves 35,000 students in roughly 14 million square feet of buildings on 220 acres. As many as 80 percent of the buildings are more than 20 years old, and many suffered from a backlog of needed repair, renovation, and demolition. As the province became flush with funding in the late 1990s, the University saw a spate of building projects, many of which did not go well.

"Leading up to 1999, we had a series of capital projects going wildly over budget—20 to 80 percent over budget—and they were completed behind schedule," says Dechert.

The problem was a breakdown in communication and accountability. Deans went directly to the province for funding without the knowledge or consent of the university administrators, Dechert says. They did not have the data or the long-range view to properly justify their proposals, to assign realistic cost estimates, nor to understand their own project within the global needs of the University. More importantly, they were failing to consider much less grandiose and costly solutions to their perceived problems.

The provincial auditor, who was brought in to examine the university's management of capital projects, recommended a more stringent capital process, and a consistent way to document and present information. That led to the creation of a template for business case analysis for all capital projects at the university, and for the entire province.

Business Case, Defined

At first it was an uphill battle getting academics to appreciate the need for this level of planning, and even to understand what a business case is, says Dechert.

"A business case is something that explains a problem and proposes a solution to that problem," says Dechert. "It should be the synopsis of what the project is intended to be. It explains who will benefit from this project, and every once in a while, who won’t benefit from it."

A complete business case also includes alternatives to the proposed project.

"You can't just go to your board of governors with one solution and say this is the only thing we can do," says Dechert. "We need to look at alternatives, whether it is expansion, addition, renovation, retrofit, or new buildings."

The document also examines how the project will impact not only the users after construction, but also the surrounding occupants during construction.

"And at the very last minute in the planning process, we hope to define the cost so it is as close to being accurate as we can be," says Dechert. "The last minute is the best time to determine what your budget should be."

This now-mandatory process, with the template as a tool, is useful for everyone involved. Planners finally have credibility in the process. The project manager gets a clearly defined scope of work and a team that has bought into that scope of work. The client has a selling tool to raise money for the project, and the client’s superiors are happy to have useful data about the work. In the end, all the constituents walk away with a common understanding and a common message because they are working from the same document.

The document itself optimally should be about 50 pages long. Writing succinctly forces the planners to think clearly and focus on the core goals of the project, and it makes the document more accessible to the key audience, she explains. It also is important to include hard data while striking a balance between language that is too scientific and therefore inaccessible, and language that is too "feel-good and esoteric" to be taken seriously.

"Put the basic facts in the document, and save the detail for the appendices," advises Dechert. "Remember that your key audience are people who have no time, and they want the bare facts. We found that our most successful projects can have the case defined within about five words. If you can sit there and say, this project is for bench to bedside, this project is going to resolve our problems in Kyoto protocol, it sells a project right away."

As a general rule, the process should take five to 10 percent of the total project time, including design and construction. A two-year project, for example, should include about two months of planning. But be open to revising the business case later in the process.

The business case contributes information throughout the process and should evolve as the project does, says Dechert. It provides information for the project implementation manual or project charter, because it helps to define roles and responsibilities, schedules, project scope, and cost, all of which are important in drafting contracts for consultant and contractor. It also serves as a good benchmark for status reports and post-occupancy review.

The process of creating the business case also can serve to bring together a diverse group of people and make them into a cohesive team with common expectations.

A Model for Success

The University follows what Dechert describes as a "fairly typical" sequence for developing capital projects: project assessment or planning; project definition and design; contract documentation; construction; and, ultimately, feedback from post-occupancy review. The key to success is the amount of effort the University spends on the project assessment phase, which culminates in the creation of a business case.

The project assessment, as Dechert defines it, is a six-step process:

1. Develop a vision that clearly explains where the faculty plans to be in the future, what you are trying to achieve to support the faculty's goals, and what the problem is you are trying to resolve.
2. Assess the need through a general space program by looking at the users to understand exactly where they stand now and what their space needs are for the next seven to 10 years. Then determine whether renovations, expansion, or a new building are really required.
3. Develop more detailed programming that looks at inter-relationships, planning principles, and the detailed project scope using space data sheets.
4. Establish the project administration: Will there be one or several building teams? Who has accountability? Who are the sponsor and the project manager? What level of user input will there be? Where will the approvals come from?
5. Develop project delivery methodologies, either traditional design-bid-build, design-build, or other variations.
6. Develop a financial resources strategy, looking at what the cost of the project may be, including its operational costs, and where the money is going to be coming from.

All of this information then contributes to the business case.

A Successful Track Record

The first business case in the province of Alberta was the Health Research Innovation Facility, a $400-million, 730,000-sf facility scheduled to be complete in 2007. {Note: All figures are Canadian dollars.} Many others have followed:

• The National Institute for Nanotechnology, a joint venture with the National Research Council, is 230,000 sf for $65 million. It should be completed in May 2006.

• The recently opened Natural Resources Engineering Facility is a 370,000-sf facility built for $65 million. "That was its budget three years before it was built, and that was what it was built for," says Dechert.

• The Centennial Center for Interdisciplinary Science, currently in the design development stage, is planned to be 560,000 sf, built for about $295 million.

• The Agri-Food Discovery Place is a 53,000-sf research facility for food and crop safety, built on the University’s farm for $18.2 million.

• The Zeidler Center for gastrointestinal clinical trials, which opened in spring 2005, is 36,000 sf, built for $7.5 million.

• The Civil Electrical building, built in the 1950s, was a major retrofit for $16.5 million to create swing space. The occupants of the Physics building will be located there for two to four years while the University tears down the Physics building to build the Centennial Center for Interdisciplinary Science. When the Physics Department moves in the new science building, the swing space will be used to house people whose buildings are undergoing renewals to reduce deferred maintenance.

The University's projects are coming in on budget now, because of the step-by-step articulation of the business case analysis, says Dechert.

"You are looking for success, so use the materials that will give you success," she concludes. "This isn't a meaningless piece of paper."

By Lisa Wesel

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