3: Create the Business Justification
Roadmap to Action / Create the Business Justification
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Inputs Needed

  • Major outputs from TRN modules 1‒5
  • Projects and funding sources from Action 2

Outputs

  • Project cost and savings estimates and CDF calculations that detail the cost of unmet resilience gaps over different timeframes
  • Costs, savings, and recommended funding sources for each project, including which funding sources were eliminated from consideration
  • A business justification template to present to organizational leadership
  • A strategy for obtaining leadership buy-in and support of the defined projects

Overview

Information Classification Considerations
Some of the data gathered through TRN process may be considered classified or sensitive. Prior to starting data accumulation for the business justification, the resilience planning team should seek guidance from designated information security personnel. Some organizations have documented guidelines on topics that may be treated as potentially classified. These can include details on critical missions, functions, facilities, or other assets, particularly when specific vulnerabilities and the locations of those assets are identified or disclosed.

In this action, the project data and analysis will be assembled into a concise and compelling story in order to secure leadership buy-in, thereby forming a business justification. Estimating the costs and savings of each project will be an essential first step to developing this justification. This action will also help estimate the cost of inaction over time using a customer damage function (CDF) calculator (coming soon), if applicable, which will help frame the costs associated with inaction. This action captures information about costs, recommended funding sources, and the CDF calculator. Finally, preparation and follow through for informational briefings and a final decision briefing will support the approach for each organization to address its path forward.

Information Classification Considerations
Some of the data gathered through TRN process may be considered classified or sensitive. Prior to starting data accumulation for the business justification, the resilience planning team should seek guidance from designated information security personnel. Some organizations have documented guidelines on topics that may be treated as potentially classified. These can include details on critical missions, functions, facilities, or other assets, particularly when specific vulnerabilities and the locations of those assets are identified or disclosed.

In-Depth

By breaking a solution into actionable projects to achieve/execute prioritized solutions, the resilience planning team can start to identify the process needed for implementation. Estimating the costs and savings of each project will be an important first step to developing a business justification needed to take the projects one step further. Funding sources such as ESPCs may require life-cycle cost analysis in order to be viable. The Building Life Cycle Cost Programs and REopt™ Lite are two tools that can be used to perform life-cycle cost analysis, and FEMP support is available through the FEMP Assistance Request Portal to assist in performing this analysis. This action will also help estimate the cost of inaction over time using a CDF calculator. Preparation and follow-through for informational briefings and a final decision briefing will support the approach for each organization to progress on its path towards resilience.

Instructions for Data Entry

For those working offline, information about costs, recommended funding sources, and the CDF calculator, if applicable, are captured in Tab 5 of the Roadmap to Action Workbook. and summarized as part of the Roadmap to Action Action 3 Worksheet: Business Justification Data and Analysis Collection. This information can be used in the TRN Resource: Business Justification Presentation as needed.

Step 1: Estimate Project Costs and Savings

The resilience planning team can refer to the TRN Resource: Identify and Evaluate Potential Funding Sources and any cost estimates developed in Actions 3 and 4 in the Solution Prioritization module as a starting point for estimating project costs. If these sources do not address certain project costs, there are many helpful resources for estimating project costs listed below.

Technological Projects: For distributed energy projects, the National Renewable Energy Laboratory’s Annual Technology Baseline provides a useful starting point. For other energy and water projects, RSMeans is another common resource, although this data requires a subscription purchase. REopt Lite is a potential tool that the resilience planning team can use to estimate distributed energy project costs and savings, as well as evaluate the resilience performance of the proposed projects. For federal projects, FEMP offers free, expert Technical Assistance and can assist with developing these estimates.

Estimating a project’s electric energy savings requires a detailed understanding of the site’s electric load and utility rate. The project may provide electric energy charge and/or demand charge savings, but TRN users should carefully evaluate utility policies and requirements to ensure that these savings are achievable. Estimating water savings requires additional measurement and high-level audits to determine potential savings.

Institutional and Operational Projects: For institutional or operational projects, rely on the organization’s existing labor cost estimation tools to develop cost and savings estimates.

Step 2: Estimate Customer Damage Function Savings

The value of the recommended resilience projects is further quantified with this action. When the estimated savings in Step 1 are insufficient to justify the cost of the projects on their own, quantifying the value of reduced risk of losses from the resilience project may be necessary as well. One method to calculate this reduction in risk is to determine the consequences related to sustainment of power or avoided losses to a facility’s mission, equipment, personnel, and assets. The avoided costs associated with resilience projects can be viewed as a part of their return on investment. Determining the value of resilience projects will assist with making the business justification in the next step. The TRN Resource: Customer Damage Function can assist users with estimating the value of each resilience project in terms of interruption duration and customer economic losses. When applied, it provides another data point that helps justify moving forward with resilience projects.

The information collected throughout the TRN can be used to inform the CDF results, as shown in the table below.

Inputs Outputs
TRN Baseline Development Action 1 information results>CDF Facility Info CDF could inform the Solution Prioritization question “Does Solution Reduce Consequence?” For users working offline, this is located in the Solution Prioritization workbook Tab 2, Column H, Solution Risk Reduction.
TRN Baseline Development Action 2 information results>CDF Facility Info CDF can inform the Roadmap to Action module results for making the business case by comparing compiled Solution Prioritization costs to the cost of inaction from the CDF.
TRN Baseline Development Action 3 ‘Redundant System Conditions’ information results>CDF Facility Info The information can be used to inform the inputs to the CDF related to facility information.
Outage durations documented in the TRN Risk Assessment>CDF Outage Duration Tab, Column K. For those working offline, this information is found TRN Risk Assessment Workbook Tab 3A, Hazard Characterization, Column G, Outage Duration (hours). The information can be used to inform the outage duration in the CDF.

Step 3: Compile the Business Justification

In prior modules and actions, different components were assessed to evaluate and quantify the resilience project(s). This action will compile the business justification and document key data and analysis for the recommended resilience project(s) into a compelling story. Users can use the Roadmap to Action Action 3 Worksheet: Business Justification Data and Analysis Collection.

When presenting to leadership, a clear and concise Business Justification is required to capture all data that has been collected and analysis that has been conducted. By organizing all of the relevant information, a compelling, logical narrative can be built to provide a solid justification for moving forward with the identified resilience projects. It is also important to capture the funding sources that were considered and eliminated in Action 2.

Step 4: Obtain Leadership Buy-In

An important step for ensuring resilience projects come to fruition is reengaging leadership and securing their buy-in as the resilience planning process is nearing an end. Through one or more informational briefings and a final decision briefing, a case can be made to leadership about the projects and how they meet the resilience objectives of the organization. The ultimate goal is to secure leadership buy-in to support the implementation of the resilience project(s). Additional detail on this step is included in the TRN Resource: Obtaining Leadership Buy In Guide. A final decision briefing can be developed using the TRN Resource: Business Justification Presentation as a starting point. At the decision briefing, ask for a signature or consensus approval (or whatever is appropriate for the organization) to approve the resilience project(s). This sets the path forward for enacting the resilience project(s) and moving forward with incentives and the preferred funding source.

Step 5: Determine Need for Iteration

After meeting with leadership, determine if iteration is required for any completed actions.  Resilience planning is an iterative process.  It is expected that over the course of resilience planning, factors such as site priorities, critical missions, and risk drivers may evolve. If any changes to those factors were discovered while obtaining leadership buy-in, now is the time to incorporate them into the process, before moving forward with execution plans. If no changes are required for leadership buy-in, move forward to Action 4. Users will develop a plan for full TRN iteration in later actions.