Better Business Cases guidance: Public value at pace

By Nick Butler

8 March 2022

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Discussing Better Business Cases guidance at a whiteboard. Image based on photo by ThisisEngineering RAEng on Unsplash.

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.

Treasury logo.

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.

Better Business Cases guidance

Here are the New Zealand Treasury’s Better Business Cases resources.

You might also find the UK guide (PDF) useful.

Better Business Cases training and support

Treasury support

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.

Training

There are two levels of Better Business Case training available:

  • Foundation
  • Practitioner

You can find New Zealand BBC training providers on the APMG website.

Learn more about support and training.

Which projects need to follow the Better Business Cases model

Government agencies must follow the Treasury guidance for all significant investment proposals. Significant means projects that:

  • have important impacts for your agency, sector or clients, or for the government’s strategies, or
  • need Cabinet or Ministerial approval. This means projects that are:
    • high risk, or
    • funded via public private partnership or other new approaches, or
    • reliant on new Crown funding or support, or
    • estimated to have whole-of-life costs (WoLC) over $15 million.

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.

Scoping your projects to maximise value and minimise 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.

Breaking down wider goals into smaller projects

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.

Delivering projects in priority order

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.

Pilot projects to test innovative solutions

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.

Getting started with Better Business Cases

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 structure of Better Business Cases

The Better Business Cases guidance splits business cases into different:

  • parts (the five-case model)
  • approval processes.

The five-case model

You create your overall business case in five parts:

  • Strategic case — the benefits
  • Economic case — the options
  • Commercial case — the marketplace and procurement
  • Financial case — affordability and funding
  • Management case — delivery, monitoring and evaluation

You can see how to complete the five cases below.

Approval processes

In BBC, some business cases need two-stage approvals, and some just one.

Two-stage approvals

High-risk, large-scale projects follow the Cabinet-mandated two-stage approval process. You get your business case approved in two stages:

  1. Indicative business case (IBC) — High-level analysis of the preferred way forward (a shortlist of options) and a plan for how you’ll assess the shortlist and the marketplace. Also known as a Programme business case (PBC).
  2. Detailed business case — The Preferred option from the shortlist and the plan to implement and procure it.

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.

Single-stage approval

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.

Implementation business case

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.

Programme and project approvals at a glance

This graphic sums up the planning and approval process for programmes and projects.

Graphic showing the planning and approval process for programmes and projects.

How to complete the five cases

Here is a summary of what each case covers with links to tools to help you complete it.

Strategic case

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:

  • the strategic context:
    • organisational overview
    • alignment to strategic intentions
  • the case for change:
    • investment objectives
    • potential scope and services
    • main benefits
    • main risks
    • key constraints, dependencies and assumptions.

Tools for preparing the Strategic case

Economic 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:

  • the status quo (‘do nothing new’)
  • an achievable ‘do minimum’ that meets essential requirements
  • the preferred way forward (if this is different).

You’ll cover:

  • critical success factors
  • long-list options
  • the preferred way forward
  • short-list options and options assessment
  • economic assessment of the short-list options
  • non-monetary benefits and costs
  • risk and uncertainty
  • testing the robustness of the options analysis
  • preferred option.

Tools for preparing the Economic case

Commercial 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:

  • Procurement strategy
  • Required services and outputs
  • Risk allocation
  • Payment mechanisms
  • Contractual arrangements
  • Personnel implications
  • Accountancy treatment
  • Evaluation of best and final offers
  • The negotiated deal and contractual arrangements
  • Confirmation of Commissioner’s support

Tools for preparing the Commercial case

Government procurement guidance on business cases

Financial case

Here you show that the project is affordable and that funding is set up.

You’ll cover:

  • financial costing model
  • Capex and Opex requirements
  • financial implications of the deal
  • impact on balance sheet
  • overall affordability and funding
  • confirmation of support.

Tools for preparing the Financial case

Management case

This shows how you’ll deliver, monitor and evaluate the project.

You’ll cover:

  • programme management governance (if it’s a programme not a project)
  • project management
  • change management
  • benefits management
  • assurance and risk management
  • contract management
  • post-project evaluation

Tools for preparing the Financial case

The level of detail needed

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

Project assurance

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.” Learn more about Project risk management with Agile and Security assurance in Agile software development.

Create public value by cutting the cost of delay

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.

More resources for government agencies

Government Digital Service Design Standard made simple

Government Marketplace: Digital experience services procurement

NZ Government consultancy panel: how to use it

All of government Web Services Panel: how to use it


Graphics and tables by the New Zealand Treasury. (CC BY 4.0) licence.

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