© The Treasury 1

Better Business CasesInvesting for change

Seminar

August 2012

2

Agenda Welcome

Background

Overview

The 5 case model and the process

The scoping document-to engage and agree early

Products, training, support and ongoing development

Guest speaker

Questions

Tea and coffee

3

Background

• Better informed decisions on investments

• What makes successful projects and programmes ?

4

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

• What is a Better Business Case?

• What is expected?

• When does it apply?

• Who needs to be involved?

Overview

5

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?

6

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

7

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

8

The scoping document-to engage and agree earlyPurpose:

• Facilitate discussion and agreement on how the Better Business Case Guidance will be applied (between the developer and the monitoring function)

• Aligning the level of effort and assurance through each part of the business case development process with the scale and risk of the proposal

Users:

• The Developer • The Sponsor • The Monitor /Reviewer• Other Assurance

9

How the BBC guidance can be tailored

1Which Business Case documents will be completed – the pathway

Scoping document used:•Programme Cover Sheet•Project Cover Sheet

2What analysis and engagement is appropriate to develop the specific business case

Scoping document used:•The specific business case scoping document

Project Strategic Assessment Indicative Business Case Detailed Business Case Implementation Business Case

Project

Confirm fit with strategy Agree shortlisted options

Approve delegation and funding

Approve contracts

S EC F MS SE C F M S E C F M

Programme Strategic Assessment Programme Business Case

Portfolio or programme

Confirm fit with strategy Approve affordable/best value programme and projects

S E C F MS

S E C F M

Single Stage Business CaseProject Strategic Assessment

S

10

Products, training , support and ongoing development Products on the website

Training and Support available through the website

Version 3 released 6th August

Interest in adapting/adopting BBC from around NZ but need to better align/integrate with other processes and decision making frameworks

Further development for release of version 4 in July 2013

http://www.infrastructure.govt.nz/publications/betterbusinesscases

© The Treasury 11

Guest speaker

© The Treasury 12

Questions