The purpose of this phase is to:
In many cases where the type of intervention required to address the strategic case is clear, and where this is limited to a single activity type, business case development can be progressed through a single-stage business case (SSBC).
However, there are circumstances where a programme business case (PBC) phase is needed to enable the right level of analysis and development to more fully understand the problems, opportunities and constraints identified in the strategic case. These can include proposed investments that:
Activity management plans (AMPs) can fulfil the role of the business case (up to and including the PBC) for continuous programmes such as road maintenance. They should be developed in accordance with industry good practice for AMPs and in a manner consistent with Business Case Approach (BCA) principles.
AMPs need to analyse network alternatives and options in developing a preferred programme, and demonstrate how the options considered as part of the programme address these issues.
‘One-off’ activities that are included in another programme, for example an AMP that has been developed using BCA principles, are unlikely to require a further PBC, provided it can be demonstrated that they are:
This means that, provided the AMP has been developed in a fit-for-purpose way that meets the requirements and expectations of the BCA, many activities will be able to start at the single-stage business case. If during the development of the strategic assessment it becomes clear that the problem is more complex or widespread than initially thought, then a PBC should still be considered as the way forward.
Keep in mind that a point of entry conversation is used to explore the correct starting point for business case development, and should include consideration of the above points. If in doubt, seek advice from your NZ Transport Agency investment advisor.
In the PBC phase, you and your partners and stakeholders further develop your understanding of the problem and its context, and begin identifying how you might address the problem. The PBC does not look at detailed solutions, but should consider a broad mix of changes or activities that might be delivered by multiple parties over a period of time.
The programme business 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.
Depending on the complexity of the investment proposal, it is worth spending time and money in this phase to hire good workshop facilitators and specialist consultants, where you need them. This will help ensure a successful result as you keep developing the investment story.
The ‘pre-work’ effort required in developing a PBC should not be underestimated. Before any workshops are held, it is crucial to spend time revisiting and testing the assumptions made in the strategic case, building the evidence base and developing alternatives and options to ensure the discussion is well informed.
You will continue to apply critical thinking throughout this process to ensure the integrity of the business case. This is not simply an exercise in confirming the initial problems and benefits; it is about objectively testing them against evidence to make sure they are well-founded before continuing further. Implicit in this statement is an expectation that if analysis of the evidence shows the initial problems or benefits to be incorrect, the strategic assessment will be altered accordingly (and stakeholders kept informed of the reasons for any changes).
Engaging early with stakeholders and having a clear plan for stakeholder engagement is also very important. Getting the groundwork right means you should be in the best possible position to develop the business case further and explore alternatives and options with your stakeholders.
A robust PBC provides the Transport Agency and all stakeholders with assurance that:
It also needs to demonstrate that the BCA principles have been applied so that the investment proposal can be prioritised under the Investment Assessment Framework (IAF).
It is good practice for large and/or high-risk proposals to formally check in with investors once the problems and benefits have been reviewed and investment objectives are being drafted. A discussion about where things are at can help avoid heading down a wrong or expensive track.
The simplest and clearest way to structure the PBC is to divide it into three sections, as outlined below. Note that this information is provided as a guide only; users need to bear in mind that specific situations may differ. As always, apply the BCA principle of fit-for-purpose effort.
This section of the PBC usually takes around 60% of the time of the PBC phase. Expect it to take around four to six months, though for an especially complex issue it may take even longer.
In collaboration with your investment partners and stakeholders, you need to revisit and refine the strategic case:
The first workshop is the cornerstone for how the rest of the business case develops, so it is important to make it as effective as possible. It will generally feed into the first section of the PBC document, and is an opportunity to reinforce engagement with and between the stakeholder group, the problem owner’s organisation and, if relevant, the project team.
At this workshop participants will:
It is important to have the right people at this workshop, and to organise it around the availability of key participants. Workshops should be kept to around two hours if possible.
If there has been a significant gap in time between the strategic case and developing the PBC, this re-examination is even more important.
The workshop may include senior, governance-level people, including elected members, but also people with specific technical skills and knowledge. As with all BCA workshops, this should be led by a facilitator. However, remember to keep it fit for purpose; low risk and complexity programme workshops may be facilitated by a staff member with the appropriate skills and experience, while high risk or complexity issues are best led by an external, accredited facilitator.
For a robust business case, it’s important that all possible responses are captured and recorded. This encourages innovation, ensures the best alternative or option is chosen and reduces the risk of the recommended programme being challenged further down the track.
Think about how you will encourage a broad range of alternatives and options to be explored, even if they initially seem counter-intuitive. Avoid drawing pre-conceived solutions to peoples’ attention, as once a potential solution is ‘on the table’ it will be harder for people to imagine alternatives.
An alternative is the broader level of the solution, for example, a bypass or an intersection; the option could be what kind of intersection, such as a roundabout or a grade-separated intersection.
Some alternatives and options will come from partners and stakeholders through the workshop, while others may come from public consultation. All potential responses should be given meaningful consideration and not dismissed out of hand; valid reasons need to be given for not continuing further with any response option.
Responses can fit into three broad categories, which all need to be explored when looking at alternatives and options:
The Transport Agency expects that an intervention hierarchy approach will be applied to all investment proposals, at both programme and project levels.
You can use the BCA strategic options toolkit to help you consider options.
Download the BCA strategic options toolkit [XLS, 199 KB] (click ‘Enable content’ to run macros)
This workshop should be a big brainstorm of possible alternatives and options – at this stage, all ideas should be considered, as in ‘there’s no such thing as a stupid question’. The project team should continue to develop the investment story, getting the right level and pitch, and opening it up for creative alternatives and options. The PBC phase is where innovative, outside-the-square ideas can be raised and explored.
These considerations should be evaluated at the same time as trade-off discussions. For example, an option that isn’t lowest cost, or doesn’t deliver against all objectives, may be chosen because it has a more acceptable risk level than a lower-cost option that meets objectives.
A stakeholder workshop will be an important component in shaping the decision making once you have a shortlist of alternatives and options for a recommended programme.
You may not require as many workshops, or have used a different approach, to arrive at a recommended programme, but you will still need to have gone through the same thinking to arrive at your recommendation.
The investor(s) and other stakeholders will need to understand why the proposed strategic response was selected out of those considered. This should include details of how the alternatives and options have been evaluated. As always, apply fit-for-purpose effort to the range of factors considered and the degree of analysis supporting the assessment of options, based on the complexity, risk and potential value of the proposed investment.
The PBC must include an assessment of the feasibility of the recommended programme to give the investor(s) confidence that it can be delivered.
An information guide is available as an option for you to use and adapt when writing your PBC document, to help you tell your investment story.
You should be working on the PBC document throughout the process, adding to it and refining it as your knowledge grows. This includes continually applying the investment questions to ensure you have covered the key issues that will form the Transport Agency’s assessment of the business case. In addition, regular discussions with a Transport Agency investment advisor helps to ensure that the business case is robust, and there are ‘no surprises’ when it is assessed.
The PBC document should include:
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 continuing to develop the proposed investment at this time, and by this organisation(s).
The business case developer and the problem owner make an initial assessment of the strength of the business case, guided by the 16 investment questions, and evaluate the investment proposal against the IAF. The results of this ‘self-assessment’ should be recorded in the PBC document.
Problem owners should form an objective view on whether to recommend continuing development of the business case. If the decision is to proceed, the PBC must identify the scope of the next phase.
Send the PBC document to all participant stakeholders for comment before submitting it to the Transport Agency for assessment of the business case. If there are co-investors, you will need to seek their support, which will likely involve going through their internal approval processes. The decision-making needs of each co-investor must be clear in the project plan and governance section of the PBC document.
When you decide that the PBC is ready for assessment by the Transport Agency, request support via Transport Investment Online (TIO). If you are seeking NLTP funding, you must submit a robust funding application in TIO, either accompanying the PBC or shortly after support is indicated. Both the scope and the application must demonstrate that the level of effort proposed is appropriate to the scale of the problem.
When the request for PBC support is received in TIO, the Transport Agency assesses the business case against the 16 investment questions and the criteria set out in the IAF to determine whether:
A recommendation is then made to the delegated decision maker to support the PBC or otherwise. If the Transport Agency investment advisor has been involved throughout development of the business case, there shouldn’t be any surprises that result from the decision.
Once the investor(s) has signalled support for the recommended programme, it becomes the ‘preferred’ programme. However, PBC support does not indicate blanket approval for the individual activities signalled in the preferred programme. Each activity proposed for inclusion in the NLTP must still be accompanied by an individual funding application. Because activities within a programme may be implemented over a prolonged period of time, individual funding applications must be made at the appropriate time. It is expected that at least one application for funding for the next phase will usually be made at the same time as PBC support is requested.
In addition to timing, decisions will need to be made regarding the nature of appropriate next steps for each activity in the programme. The Transport Agency’s expectation is that this will be done in a fit-for-purpose way meaning that, in practice, next steps can include:
You can also use the BCA Q&A tool to guide your critical thinking about the phase of the BCA you should progress to next.
If the decision is to not progress the PBC for now, or the assessment indicates that the problem doesn’t align with current priorities and therefore the proposal will not be funded, the decision is recorded in TIO. The PBC entry will remain in TIO, allowing problem owners to return to the PBC in the future, for example, if government priorities change and the problems now align with the IAF.
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.
Make sure the PBC document is filed where it can be retrieved easily for future reference.
Make sure you communicate with key stakeholders about the reason for the decision. Consider holding a report-back session for all stakeholders, especially if you planned for one in your engagement plan.
The PBC phase is funded by the NZ Transport Agency.
Work developed during the programme business 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 ‘Understanding programme business cases and activity management plans’ course includes:
To open the course, click the link above and then click ‘enrol’. You will be prompted to enter your log in. 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 ‘programme business case’.
These information sheets are designed to accompany the learning modules.