Caple: 9 tips for writing a winning Exhibit 300

How would you like to spend weeks refining your annual budget for submission to the White House, only to have it rejected because you misclassified an investment as information technology-related when it was something else?

It's not unusual. Roughly 25 percent of the business cases submitted by agencies to the Office of Management and Budget are incorrectly classified. That's a lot of effort wasted writing business cases from the wrong perspective. Even worse, an agency might not get approval from the Office of Management and Budget for a project that it needs.

The Bush administration requires all agencies to justify their budget submissions by presenting business cases of the budget request, known as Exhibit 300s. Those business cases analyze the investment return on the funding requested. The Exhibit 300 is a planning document and a performance tracking document. Although it was originally designed to assess IT investments, it later expanded to cover non-IT capital assets.

OMB officials evaluate business cases using specific scoring criteria, which require a minimum threshold before officials accept a submission. Agencies must assess their Exhibit 300s before submitting them to ensure that they meet the threshold score.

Business cases are powerful tools that help agencies plan projects, manage costs and perform their missions. But putting together persuasive business cases has not been easy for many federal managers. They have struggled to comply with this somewhat complex mandate. The process requires agencies to answer hundreds of questions covering five life cycle phases, IT and non-IT investments, and infrastructure and consolidation investments. Then agencies are required to fit their business rationale into a single template — the Exhibit 300. Many proceed with trepidation because they don't fully understand OMB's guidance but know that a misstep could jeopardize their budget requests.

I know, because during the past three years, the Fujitsu Consulting team has scored several hundred Exhibit 300 submissions for agencies and provided coaching to many. We have developed an approach that enables agencies to receive close to 100 percent acceptance of their submissions by OMB. The following are some of the key lessons we have learned.

Position the investment correctly

Determine if the investment is IT-related or not by referring to the Clinger-Cohen Act's definition of an IT project. Also consider the use and management of most of the investment. Many investments have an IT component that is not their primary focus. OMB might not consider such projects IT-related.

Then determine which of the five life cycle phases is applicable to this investment. Use the entry and exit criteria to establish that the investment status is consistent with the life cycle selection made in the Exhibit 300 template. This test frequently identifies investments that are not ready for the life cycle phase and belong in an earlier phase. The test can also reveal whether the budget proposal is proportionate to the project's status.

Think like OMB

OMB assessors want evidence

that your investment fulfills a need, aligns with your mission and can be managed by a team with the appropriate skills. Answer each section of the Exhibit 300 template in a way that communicates those messages.

Understand the expectations

It is important to understand OMB's reporting expectations for each life cycle phase. The deliverables of an initial life cycle phase are different from those expected once the investment has reached steady state status.

The former is early-stage work that should follow appropriate guidelines and standards, whereas the latter is an exercise to validate the current capabilities of an operational system. The planning, full acquisition and mixed life cycle phases cover the spectrum of status reporting between those two phases, with increasing rigor and reporting of performance.

Make logical sense

Write your business case in a logical sequence, not in the template's sequence.

Start with the project description in Section 1A, and then write the alternatives analysis in Section 1E. Those two sections represent the heart of the business case and are the initial building blocks for completing the other sections. All of the other sections are built around the selected alternative. Remember, you are creating a single investment story with complementary sections.

Make your case

Don't let the template's limitations undermine your argument.

In preparing business cases, many agencies have found that the Exhibit 300 template doesn't allow agencies to adequately provide all relevant information.

For example, the template does not deal with life cycles longer than five years. Consequently, don't be afraid to be creative in providing meaningful information and analysis that justifies your investment.

Tell the no-go ramifications

What is the impact of not funding this investment?

This critical question must be addressed in Section 1A. Use it to argue that failure to fund the requested investment will endanger your mission.

Tell the potential benefits

It is important to identify measurable outcomes.

The performance management sections should be more than just a list of capabilities and implementation milestones. You should also define the desired outcomes that, when accomplished, can be used to measure success in citizen-centered terms.

Follow the money

The financial information in all sections must align.

Calculate the spending summary based on the selected alternative analysis, which is driven by life cycle costs. Those costs must be reflected in the project funding plan. Explain any differences, such as adjustments for inflation.

Similarly, evaluate investment performance through a combination of the cost/benefit analysis and the business outcomes that represent success as defined in Section 1C.

In other words, you must understand how those different sections relate. If the financial information is not consistent, your business case will score poorly in those areas.

Read between the lines

Look beyond the template and answer OMB's unasked questions.

Think about the purpose of each section and develop answers that provide the information that OMB is really looking for, even if the template doesn't specifically ask all the questions.

For example, the unasked question in Section 1A, a project description, is: Why is this investment critical to your agency? Consequently, your project description gives you a chance to sell your investment request.

Explain that you are requesting funds for a mission-sensitive purpose, that you understand the gap between current and needed performance, and that selected investments can address that gap.

Additionally, you must boost your argument by describing the negative impact to the agency if the investment is not funded.

Similarly, the unasked question in the section about project investment management is: Do you have the right people with the right skills to manage this investment? You should provide more than lists of people. In addition, OMB assessors want to know whether an oversight process exists to ensure effective control of costs and value.

Those insights are necessary throughout the OMB template to identify information critical to satisfying the agency's criteria for funding an investment.

Gathering the relevant information and writing a persuasive business case isn't easy, but it's not rocket science either. Many agency teams have written winning Exhibit 300 submissions by following these simple tips. It's well worth the effort, for both agencies and taxpayers. n

Caple is a vice president at Fujitsu Consulting, part of the Fujitsu Group. He leads the Fujitsu OMB 300 scoring and coaching team. Caple can be reached at OMB300@us.fujitsu.com.