By Nick Butler
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This Better Business Cases guidance is for New Zealand government agencies wanting to develop business cases that deliver more public value sooner. It summarises the Better Business Case framework, shows you where you can get support and training, and looks at how to set up projects to maximise value.
Better Business Cases (BBC) is the name for the guidance that the New Zealand Treasury gives government agencies on developing business cases. It was developed with the UK Treasury and has been adopted in the EU for infrastructure projects.
Its goal is to enable government to make smart investment decisions that maximise public value.
BBC is for both projects and programmes. To keep it simple, we’re going to mainly look at projects. Here’s the Better Business Cases guidance on programmes.
Here are the New Zealand Treasury’s Better Business Cases resources.
You might also find the UK guide (PDF) useful.
The Treasury offers Better Business Case Clinics for high-risk, high-value public sector programmes and projects. You’ll need to do the Risk Profile Assessment (RPA) to see if you’re eligible. To learn more, contact your Treasury Vote analyst or [email protected].
The Treasury also runs BBC overview sessions. You can contact [email protected] to join the waitlist.
There are two levels of Better Business Case training available:
You can find New Zealand BBC training providers on the APMG website.
Learn more about support and training.
Government agencies must follow the Treasury guidance for all significant investment proposals. Significant means projects that:
Learn more about when a Better Business Case is needed.
All business cases for government projects should share the goal of maximising public value. The depth of analysis will vary with the project’s strategic impact, size and risk.
Research shows that small projects are less risky and more likely to deliver value. Based on 50,000 software projects, the 2018 Standish Group report found that small projects succeed 4 times more often than large ones.
Since reducing project size cuts both cost and risk, you want to identify the smallest project that will deliver the most public value.
The BBC Investment Logic Mapping workshops can help you break down wider goals into small projects. This process maps Problems or Opportunities through to Solutions. Treasury suggest you follow Victoria’s guidance on investment logic mapping.
Another tool that we’ve found useful is User story mapping. This is a way of breaking down work by focusing on the benefits you’ll deliver end users.
As well as being small and valuable, you want solutions that aren’t dependent on any other work to deliver the value.
Once you have a sense of the relative value and size of your independent solutions, you can prioritise those that deliver the most value for the least effort. This is often a trade-off so having some tools can help. This prioritisation guidance is designed for Agile projects but the tools it covers are broadly applicable.
You can now create a business case for your top priority solution. Because the project is small, it’ll be easier to create the business case. There’ll be less complexity to wrestle with and lower-risk projects need less-detailed business cases.
Moreover, it’s easier to manage smaller projects. Monitoring, control and evaluation are simpler. And having goals that can be achieved in the near term is a powerful motivator for project teams.
On top of that, you’ll also learn more about the project domain. You’ll get a better understanding of the users and stakeholders, and the technical and operational environments. This will help when you tackle the next highest priority solution.
At Boost, we offer free project scoping and discovery workshops to help our government clients prepare business cases.
Piloting new ideas, tools or solutions is one specific way you can cut scope and risk, and deliver value sooner. You get to test feasibility before making a larger investment.
The Better Business Cases guidance points out that Agile project management is a good way to do this. On an Agile project, you deliver testable working solutions from the first iteration. This means you start learning within weeks, not months or years.
The guidance advises you keep these projects small enough to be funded by the organisation (i.e. under the CE’s Delegated Financial Authority). This also means the business case doesn’t need to go to Cabinet.
Business cases start with a goal identified in your agency’s business and strategic planning. The business case should identify the way of achieving this goal that will deliver the most public value. As a result, decision makers can assess if the project is going to have the strategic impact needed and if the benefits will outweigh the costs and risks.
For BBC, this means you need to complete a:
By assessing the project’s strategic impact, scope and risks, you can work out how detailed your business case needs to be.
The Better Business Cases guidance splits business cases into different:
You create your overall business case in five parts:
You can see how to complete the five cases below.
In BBC, some business cases need two-stage approvals, and some just one.
High-risk, large-scale projects follow the Cabinet-mandated two-stage approval process. You get your business case approved in two stages:
The IBC will focus most on the Strategic case. It will focus less on the Economic and Financial, and less still on the Commercial and Management cases.
Lower-risk, lower-cost projects can use a single-stage business case.
This combines the Indicative and Detailed Business Cases and goes into less detail.
Both approval processes have an additional stage. The Implementation business case is for getting sign-off on your preferred supplier and planned contracts. It also reflects any changes that came out of previous approvals.
This graphic sums up the planning and approval process for programmes and projects.
Here is a summary of what each case covers with links to tools to help you complete it.
This shows the benefits the project will deliver, and how these align with your agency’s strategy. These benefits should be SMART (specific, measurable, achievable, relevant and time-bound).
You’ll cover:
Tools for preparing the Strategic case
This assesses a range of options to find what will deliver the best public value. You run these options though a cost-benefit analysis that includes wellbeing.
These options will include:
You’ll cover:
Tools for preparing the Economic case
This shows how your procurement approach will work for both your agency and your suppliers, and that it is feasible in the relevant marketplace.
You’ll cover:
Tools for preparing the Commercial case
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Here you show that the project is affordable and that funding is set up.
You’ll cover:
Tools for preparing the Financial case
This shows how you’ll deliver, monitor and evaluate the project.
You’ll cover:
Tools for preparing the Financial case
As noted earlier, the higher the risk and bigger the scope, the more detail your business cases need.
This table shows what’s required.
| High Risk any scale | Non-high risk large scale | Non-high-risk small scale | |
| Standard BBC pathway | – Strategic Assessment
-Indicative Business Case – Detailed Business Case – Implementation Business Case |
– Indicative Business Case
– Detailed Business Case – Implementation Business Case |
– Single-stage Business Case
– Implementation Business Case (if procurement) |
| Strategic fit | Investment Logic Mapping (ILM) with certified practitioner facilitator | ILM with trained facilitator | ILM not mandated |
| Monetary benefits and costs | – National economy
– All significant resource flows, including non-monetary costs and benefits |
– Organisation and selected sectors
All significant resource flows that can be expressed in monetary terms |
Organisation |
| Non-monetary benefits and costs | Multi-criteria decision analysis using expert facilitation and proprietary tools | Multi-criteria decision analysis | Ranking of non-monetary benefits and costs |
| Uncertainty | Quantitative risk analysis (QRA) | Quantify risks and probabilities | Single point adjustments of costs and benefits |
| Assurance | – Fully costed assurance plan
– Gateway reviews |
– Fully costed assurance plan
– Gateway reviews available on request |
– Assurance plan
– Gateway reviews available on request |
All projects will cover project assurance in the Management case.
If your project is ICT-enabled and high-risk, then you must have a costed assurance plan. See the Assurance section of the high risk project guidance and the government assurance guidance to learn more.
We’ve put together a guide to creating a simple Agile assurance plan. This follows the government guidance on assurance for Agile delivery. As the guidance points out, in Agile “assurance is part of the delivery process, with risk management embedded into day-to-day operations and governance arrangements.”
When your agency identifies a problem that needs solving, or an opportunity to deliver benefits, any delay comes at a cost. The problems persist, the benefits remain unrealised.
When you develop business cases, you want to cut the cost of delay. You can do this by scoping the project to the work which will deliver the most value in the shortest time. Happily, this also makes it easier to create the business case. You get it up for approval sooner. Signed-off projects are lower risk and easier to manage. And that means they finish faster and deliver value early.
The best business cases deliver public value at pace.
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If you have any questions or feedback, email me at: [email protected]
Graphics and tables by the New Zealand Treasury. (CC BY 4.0) licence.
