3. Critical assumptions or constraints
Statements of critical assumptions or constraints for the proposal need to be explicitly documented.
- These must be proposal-specific and must include identifying at the earliest possible stage all critical assumptions, including revenue drivers, capital and operating costs, social and environmental factors, financing constraints, availability of resources and expertise.
- Any known or emerging constraints directly impacting on the proposed initiative should be included.
- Regulatory, legislative, policy issues and relevant acts which may impinge in the proposal need to be identified including information on where this may be a constraint.
- Information on the sensitivity of assumptions needs to be provided, including the potential impact of significant variations in key assumptions on the choice between options and the project viability. The sensitivity analysis process involves changing the key parameters and assumptions of the proposal and examining the effect on its desired outcomes.
By assessing the impact of changing key input variables, decision-makers can concentrate their attention on those variables, which are most likely to have a significant impact on the conclusions and recommendations in the business case. It will also give an indication of the likely range of expected outcomes.
Focus this section on issues that relate to feasibility of the options, and those that are critical to the project's ongoing success.
Focus this section on assumptions for the project that:
- are beyond typical project risks and parameters covered elsewhere in the document
- are critical to the projects success or implementation
- restrict or limit feasibility of options
- affect the project’s evaluation.
Examples of issues that underpin project viability:
- government will pass legislation that …….
- existing assets (A,B,C) will be sold and proceeds reinvested in the project
- commonwealth / agency / private funds of $XX are available to the project
- the project is not to exceed the available investment funds of ….
- the project is to be completed by ….
- recurrent funding for the project will be met from growth funding / specific commitment etc
- commonwealth approval will be achieved to allow Medicare billing of …..
- beds will be transferred from agency A to agency Y in 20XX
- government will / will not fund the accommodation of …..
- car parking / MRI / retail will be privately funded.