The strategic case phase is about defining and understanding the problem or opportunity and showing there will be substantial enough benefits to justify investment to investigate the problem further. Essentially, it asks ‘Is there a case for change?’
This is a quick, low effort, minimal cost phase and should use existing evidence. It is not the time to explore options or solutions or formulate an implementation plan.
The strategic case needs to follow the key Business Case Approach (BCA) principles of investing for benefits, fit-for-purpose effort and clarity of intent, and the key behaviours of step-by-step development and informed discussion.
The main purpose of the strategic case is to confirm whether:
Strategic cases avoid wasted effort where agreement is not reached, or where stakeholders agree that the problem is not significant enough to proceed. This decision can be made at any point during development of the strategic case.
A note about opportunities…
Problems and opportunities can be thought of as opposite sides of the same coin; problems can help to identify opportunities, and describing an opportunity is a great way of showing what an investment could deliver.
Strategic cases all look and feel slightly different, but at the very least should clearly define:
It is essential that you craft your strategic case carefully so that it is clear and concise. The desire to tell a compelling story that will convince investors to commit limited public funds must be balanced against the need to be objective and maintain the integrity of the business case.
It is also important to put your investment story in a national context. Your strategic case will be assessed along with many others seeking investment from a contestable national fund that has a finite amount of money. What is it about yours that will make decision makers want to invest in it?
It is recommended that the problem owner(s), in collaboration with key stakeholders and the investor(s), produces the strategic case document within one month of identifying the benefits. This ensures the stakeholders are still engaged with the process and outcomes of discussions are fresh in their minds.
Compiling the document should not be an onerous job. It should be about 10 pages or less in total, with any supporting evidence as appendices.
An information guide is available for you to use and adapt when writing your strategic case document, to help you tell your investment story.
In essence, the strategic case comprises two parts, which it helps to keep separate:
The strategic assessment centres on the understanding of problems and benefits that has been developed with stakeholders (see Defining problems and benefits with stakeholders below) and a (brief) review of existing information and evidence.
You can start thinking about how you will develop the strategic case before stakeholder engagement. For example, getting the right people to a workshop may take time, but shouldn’t hold up starting your assessment. In fact, some early thinking will help you be prepared and organised for any workshops you have scheduled.
Gathering together information and evidence that you already have in preparation for the first workshop or engagement with stakeholders is also helpful. Think about summarising this information in a concise and easy-to-read document that sets the scene for stakeholders.
Be prepared for your initial thinking to change, for example if a different problem or opportunity is identified and mapped at an ILM workshop.
The strategic context needs to establish how well the proposed investment aligns with your organisation’s priorities, regional and national priorities, other programmes and strategies and other organisations’ priorities, if relevant.
Collaborating with stakeholders to agree on the problem (or opportunity) and the benefits of addressing it is at the heart of the strategic case. Depending on the complexity of the problem, you could achieve this by:
We strongly recommend the ILM process, especially for more complex issues. It involves a series of structured workshops with stakeholders, and the creation of investment logic maps and benefits maps.
Even if you’re not using a formal ILM process, the format and technique provides an effective way of defining problems and benefits, and creating buy-in and agreement.
The role of workshop facilitators throughout business case development cannot be understated. It is essential to engage a facilitator who is experienced in the BCA, brief them on the particular issue, and ensure they are familiar with the Transport Agency’s ILM requirements. Facilitators are expected to be ‘content-free’, that is, have no stake in the outcome of the discussions, and to:
They may be trained or accredited ILM facilitators, as appropriate.
Whatever method is used, it is essential to understand the underlying, or root, causes and consequences of problems, and describe them clearly and concisely using plain language. Acknowledge any uncertainty about root causes in the strategic case, and identify steps to address the gaps. Again, the ILM process provides a straightforward and effective means for achieving this.
Remember that discussions or facilitated workshops with stakeholders are only a starting point.
It may become apparent as you develop the strategic case, and consider evidence outside of stakeholder engagement, that the nature of the problems or the benefits of investment are not reflected well enough.
If this happens, it’s appropriate to develop some alternative wording, with stakeholder agreement, that better reflects either the sentiment of the agreed conversations and/or the evidence.
Some key points to consider:
Think about adding extra time at the conclusion of any benefits workshop to work with a sub-group of key stakeholders, including the investor(s), to map out the strategic case, key points and messages. These are stakeholders who are likely to contribute to the strategic case directly.
Developing the strategic assessment and the strategic context requires pulling together and considering existing information. This is likely to include existing strategies, monitoring data, previous studies and reports, and current organisational goals and outcomes sought, such as the Long Term Strategic View. Be clear about the relevance of any existing information to the problem or opportunity being considered.
Sources of evidence can vary widely depending on the context of the investment, but readily available ones include:
Compiling new information can assist with conversations with stakeholders and understanding the problem(s), but should only be considered if it is easy to do and requires minimal, fit-for-purpose effort.
The strategic case should outline the evidence that supports the problem identification analysis, and reflect on:
A review of the evidence base will highlight the quality of existing evidence and where there are gaps. It is important that the review describes succinctly how the existing evidence either does or doesn’t support the problem or opportunity statements, providing detail to support the cause and consequence. This will be important for scoping a subsequent phase of the business case, when any relevant information or data not currently available could be obtained.
To keep the strategic case focused, it is okay to reference supporting documents, rather than repeating detailed content. However, when doing this, there are a few things to keep in mind:
Before completing the draft document, you should evaluate whether the strategic case is strong enough to justify investment to investigate further. The Transport Agency uses 16 investment decision questions to help guide thinking as business cases are developed and assessed. It is not a definitive list, but a prompt to help critical thinking and focus on the core elements of a business case; the first eight questions relate specifically to the strategic case.
As a final test of the content in the strategic case document, check if it is concise and free of unnecessary detail, and whether it could be easily read and understood by someone with no involvement.
Consider asking a lay person who is unconnected to the investment proposal to read the draft and reflect on whether it tells a clear and compelling story, and whether they could form an opinion on it.
Send the draft strategic case document to all the participating stakeholders for comment and evaluation. A peer review helps ensure that the case for investment is robust, technically sound and delivers the agreed outcomes.
Summarise the key findings from the evidence review and feedback from key stakeholders.
It is crucial to have locked in the strategic assessment and context with all stakeholders before making a decision to proceed, and especially before beginning to consider Part 2 of the strategic case – the project plan and funding application.
Remember that a decision not to continue can be made at any point if the case for change and evidence do not support further investigation. You may determine that there is no problem after all, based on a robust examination of initial thinking. That is a perfectly good outcome and demonstrates the BCA principles at work.
Equally, the strength of evidence to support a problem may be inconclusive but the potential consequences may be significant enough that further work is required to make an informed decision about whether action is necessary at this time.
Whatever the decision, it should still be written up and saved where it can be easily retrieved for future reference.
If the strategic case determines there is a case for change, and it is necessary to investigate the problem(s) further through subsequent business case phases, you will need to develop a project plan for the next steps, along with a funding application. The plan is an opportunity to clearly set out how you will move on to the next phase in a way that would enable someone else to pick up the project from here.
The depth of analysis for project planning and the funding application should be fit for purpose, depending on the relative size, impacts and risks of the proposal.
If there is a risk that stakeholder organisations might not support progressing to the next phase, think about spending time seeking indicative support for the strategic assessment and context section first. This could avoid the potential waste of effort producing a funding application that isn’t supported.
Planning for the next business case phase also helps with the scope for procurement. For example, what will you need to do for the programme business case or appropriate next phase, and how will you do it?
The scope should include:
Further guidance on scoping the work required for developing the next phase of the business case is included in the strategic case document information guide. You can also use the BCA Q&A tool to help you guide your critical thinking about what the next stage of the BCA you should progress to.
Moving to the next phase of business case development is never a foregone conclusion. Each phase must include an assessment of whether it is worth developing the proposed investment at this time, and by this organisation(s).
Answering the question ‘Is there a compelling case for change?’ is a primary purpose of the strategic case. The problem owner makes an assessment of the business case, answering questions 1 to 8 of the 16 investment decision questions, and evaluating the proposal against the Investment Assessment Framework (IAF). The results of this assessment should be included in the strategic case document.
When the problem owner concludes the strategic case is ready for assessment by the Transport Agency, a request for support needs to be made via the Transport Investment Online (TIO) system.
The Transport Agency assesses the completed strategic case and determines whether a robust business case approach has been followed, and the proposed investment aligns with the IAF.
If the assessment indicates the strategic case will progress to the next business case phase:
If the decision is to not progress the strategic case for now, or the IAF assessment indicates that the problem does not align with current priorities and therefore the proposal will not be funded, no further action is required from the Transport Agency.
Make sure the strategic case document is filed where it can be retrieved easily for future reference. Also make sure you communicate with key stakeholders about the reason for the decision.
If the Transport Agency doesn’t support the case for change, the problem owner may choose to continue to explore the proposed investment with funding from other sources.
When a strategic case does not progress due to lack of alignment with the government’s priorities, it does not necessarily mean that the project will never be funded. Government priorities change and there may be an opportunity to revive a strategic case at a later date.
Strategic case development cannot be funded through the National Land Transport Programme.
The strategic case phase is funded by the problem owner’s organisation. The cost is relatively minor and will mainly consist of professional services fees for support from workshop facilitators. You will need to identify a funding stream and resources for any workshops and development/authoring of the strategic case.
Work developed during the strategic case phase may include:
Note that this is for guidance only, and should be adapted as necessary.
Online learning modules have been developed by the Transport Agency, and are available to our partner organisations. To request access to the modules, email email@example.com with your name, title, organisation and manager’s name.
The ‘Getting to know strategic cases’ course includes:
You will be prompted to enter your log in if you click the link above. Once you have logged in, you should be taken directly to the course. You can also find it by going to the catalogue and searching for ‘strategic case’.
These information sheets are designed to accompany the learning modules.
Use our contact form to send us a question, or get in touch with your NZ Transport Agency investment advisor.