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Financial Planning: Building a Solid Foundation for Research Infrastructures

Updated: Apr 3

It is difficult to overestimate the importance of effective financial planning for European Research Infrastructures' financial sustainability. Financial sustainability for research infrastructure (RI) such as an ERIC is reached when its funding model consistently provides enough resources to sustain all its functions without interruptions, while also allowing for its growth. Operational sustainability pertains to retaining sufficient human resources and consistently supplying the essential components needed to harness the RI's scientific capabilities and ensure its seamless operation

Financial planning is therefore a crucial process that enables RIs to identify resources for new projects, secure funding, make informed financial decisions and reach financial sustainability.

There are several key aspects of financial planning for RIs: Budgeting lies at the core of financial planning - without a budget, RIs are financially blind. A well-defined budget allows the management of the RI to understand spending habits, exercise control over finances, and make smarter plans.

Developing a Business Case

While business cases are not commonly used by academic and research institutions, they are becoming increasingly important for RI. Funders, evaluators, and banks often require a business case to support decision-making, secure funding, or professionalise service units. A compelling business case should outline the challenges that the RI faces and propose viable solutions, helping decision-makers understand the necessity and feasibility of the RI’s projects and facilitate the allocation of funds for such projects. A business case should provide an accurate assessment of the strategic fit, option appraisal, achievability, value for money and affordability.

A Business Case or a Business Plan?

Understanding the difference between a business case and a business plan is crucial. A business case primarily serves internal stakeholders, aiding in prioritization and budget approval. It focuses on the problem, options, finances, risks, and benefits associated with a specific project. On the other hand, a business plan has a broader scope and is outward-oriented, targeting investors, shareholders, and banks. It encompasses competitor analysis, marketing plans, and comprehensive strategies for organizational growth. A well prepared business plan should provide guidance through each stage of the lifecycle of the RI. The business plan should be capable of serving as a roadmap for how to structure, run, and grow the RI and a method of assessment of the key elements of the RI.

Evaluation and Monitoring

Once you have formulated your business case, developed your business plan, and selected your budgeting solution, it is essential to have an impartial and experienced body evaluate your plans and monitor their implementation from a financial management perspective. X-officio can assist at looking at your monitoring/performance frameworks, indicators and plans, data quality audits and assessments.

How Can X-officio Help?

At X-officio, our primary goal is to support Research Infrastructures in legal, governance and management matters. X-officio offers expertise in developing business cases and business plans, tailored to the RI's specific requirements. We will identify the most appropriate budgeting type (surplus, balanced, or deficit) and model (activity-based, value proposition, incremental, zero-based, etc.) that align with your specific needs and we will provide guidance in developing persuasive business cases and business plans that align with your goals. Finally, our team offers evaluation and monitoring services to ensure the effective implementation of your financial plans.

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