© The Treasury 1 Better Business Cases “Investing for change” Overview

2 Background Cabinet – Visibility of future decisions – Confident investment decisions Treasury response – Portfolio management – Business case development

3 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

4 How BBC fits with Strategy and Policy

5 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

6 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

7 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

8 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

9 When does it apply? – State sector-capital – Canterbury Recovery – National Land Transport Programme – Auckland Plan – Tertiary Education – Local Government – Good practice

10 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

© The Treasury 11 The 5 case model and the process

12 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?

13 Management The 5 key elements of good practice business cases The 5 Case Model FinancialCommercial 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

14 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 SECFM Confirm best value for money option, outline potential deal and delivery plan, assess affordability. Detailed Business Case SECFM Confirm way forward with short-listed options (consider non-traditional procurement) Indicative Business Case SECMF Confirm fit with strategy and need to invest Strategic Assessment Portfolio or programme S Confirm case for change, preferred programme, project tranches, funding Programme Business Case SEC 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 SECFM Planning and scoping Strategic Assessment S Project/s (Other) The level of emphasis of each of the five cases depends on the type of business case

15 How BBC fits with Strategy and Policy

© The Treasury 16 Planning the Better Business Case Right sizing effort – the scoping document

17 The Goldilocks Zone In the case of fairy tales Not too hot/not too cold 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 life on planets Not too close/not too far away In the case of Better Business Cases Not enough effort/too much effort In the case of Better Business Cases Not enough effort/too much effort

18 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

19 Business Case Capability Content e.g. service delivery Content e.g. service delivery Assurance and Decision Making e.g. monitoring function Assurance and Decision Making e.g. monitoring function Business Case e.g. cost/benefit analysis Change mgmt e.g. stakeholder engagement Change mgmt e.g. stakeholder engagement Stakeholder Focus Subject Matter Focus Project Management Governance Low High Influence Empower Mass Communication Co- production High Power and Influence Change Impact Stakeholder Management

20 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

© The Treasury 21 Where to get support and the national evaluation and way forward

22 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

23 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

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