Better Business Cases “Investing for change” Overview

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Better Business Cases “Investing for change”

Overview

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Background

• Cabinet– Visibility of future decisions – Confident investment decisions

• Treasury response– Portfolio management– Business case development

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Visibility to inform the portfolio

Individual intentions fit under a wider lifecycle, that can be influenced and balanced within constraints before business cases on programme and projects start to be

developed

10 year view of intentions

Projects and programmes underway

Benefits

Aligning and balancing with direction (govt priorities)

Better Business

Cases

Opportunity for greater influence through

better strategy and planning

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How BBC fits with Strategy and Policy

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Why do I need to know about Better Business Cases?

• Decision makers/Investors-confidence !

• Management-confidence !

• Business case developers-fit for purpose

• Reviewers- fit for purpose

• Private sector service providers-early engagement

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Why two thirds of programme and projects succeed?

• Strong strategic fit

• Senior management engagement

• Stakeholder engagement

• Focus first on value-for-money then funding

• Supply side engagement

• Systematic approach

Differences between programmes and projects

We have built these into NZ version of BBC

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What is a Better Business Case?• BBC (UK) supported by part of ILM tool (Australia)• Principles

• Campaign to deliver benefits, not a document to get money• Thinking not writing• Stakeholder engagement-way of working together• Fit for purpose analysis• Smart procurement of consultancy support• Coherence and cohesion

What is expected?• Depends on scale and risk• 5 case model

What is a better business case and what is expected

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Sponsor engaging early with reviewer on:• type of business case required to support the decision

required• level of effort and stakeholder engagement required

Key “senior” stakeholders do the BBC thinking together:• highly influential and highly impacted• include the writer early• include the reviewer early• include supply side early

Who is involved

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When does it apply?

– State sector-capital – Canterbury Recovery– National Land Transport Programme– Auckland Plan– Tertiary Education– Local Government– Good practice

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• Why do I need to know about better business cases?– Outcomes– Stakeholders

• What is a Better Business Case?– Attributes– Principles

• What is expected?– Depends on scale and risk– 5 case model

• Who needs to be involved?

BBC Overview

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The 5 case model and the process

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Any business case addresses 5 key questions:

The 5 Case Model

1. Is there a compelling case for change?

2. Does the preferred investment option optimise value for money?

3. Is the proposed deal commercially viable?

4. Is the spending proposal affordable?

5. How can the proposal be delivered successfully?

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Management

The 5 key elements of good practice business cases

The 5 Case Model

Financial Commercial

Economic

Strategic

Compelling case for change - strategic fit & business needs

Preferred option optimises value for money

Commercially viable

Affordable within available funding

Achievable and can be successfully delivered

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The pathway of the phased BBC process can be used to select which type of business case best delivers the required decision/s

Confirm supplier offering best value, detailed

commercials, confirm affordability. detailed

management and delivery arrangements

Implementation Business Case

S E C F M

Confirm best value for money option,

outline potential deal and delivery plan,

assess affordability.

Detailed Business Case

S E C F M

Confirm way forward with short-listed options (consider

non-traditional procurement)

Indicative Business Case

S E C MF

Confirm fit with strategy and need to invest

Strategic Assessment

Portfolio or programmeS

Confirm case for change, preferred programme, project tranches, funding

Programme Business Case

S E C F M

Project/s (Large scale and/or high risk)

Strategic Assessment

S

Confirm fit with strategy and the need to invest

Single Stage Business Case

S E C F M

Strategic Assessment

SProject/s (Other)

The level of emphasis of each of the five cases depends on the type of business

case

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How BBC fits with Strategy and Policy

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Planning the Better Business Case

Right sizing effort – the scoping document

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The Goldilocks Zone

In the case of fairy tales

Not too hot/not too cold

Just right

In the case of life on planets

Not too close/not too far away

In the case of Better Business Cases

Not enough effort/too much effort

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Use the scoping documents to obtain sponsor and reviewer agreement on how to apply BBC

• What previous decisions have been made

• Programme or project approach and then the type of business case

• Right sizing the capacity/capability of the team

• Right sizing the effort and engagement

• What decision is being sought

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Business Case Capability

Content e.g. service

delivery

Assurance and Decision

Making e.g. monitoring

function

Business Case e.g. cost/benefit

analysis

Change mgmte.g. stakeholder

engagement

Stakeholder Focus

Subject Matter Focus

Project Management

Governance

Low High

Influence

EmpowerMass Communication

Co-production

High

Pow

er a

nd In

fluen

ce

Change Impact

Stakeholder Management

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Key considerations

• Complete the scoping document at the beginning of each phase

• Fill out what you know - update as you know more• Use the document to support your thinking,

discussions and recording the agreed way forward• Involve your monitoring/reviewer function early• It is a tool to support you – not a prescriptive template

– so modify to meet yours and your monitoring function’s needs

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Where to get support and the national evaluation and way forward

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Where do I get support-on the website ?Overview information– Quick Reference Guide– Presentation– Overview booklet– Scoping document (programme or project)

Detailed information for each type of business case:– Scoping document, to agree effort– Guidance booklets, to understand the standard– Word Template, to write the business case– Power point “one pager”, to present the business case

Links to related processes

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Where do I get support-book on line ?

Training programme(Monthly in Auckland, Wellington, Christchurch)Bi-monthly Hamilton/Rotorua– Foundation Course (knowledge-half day) free– Practitioners Course modules 1 and 2 (skills-2 full

days) cost– Reviewers Course (skills-full day) cost

Tailored support– Training for high priority public sector

organisations– Executive intensive session(45 minutes) free

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2013 2013 National Evaluation and way forward– Evaluation findings

• Public Sector Organisations• Minister of Finance

– Way Forward• Improve capability of the priority public sector organisations

– Add case studies and webinar communities of practice– Expert Pool pilot– Organisational capability pilot

• Provide advice to improve reviewer capability