How can New Zealand keep living standard rising for all?
The gamechangers to resolve inequality are to have a national strategy, a quality reform of the welfare state and treaty of Waitangi settlements.
The gamechangers to resolve inequality are to have a national strategy, a quality reform of the welfare state and treaty of Waitangi settlements.
Social investment is the right approach to target spending to those in need but it is early days and we are yet to identify the services that are needed.
Business want to help to resolve inequality but say they don’t know how to.
Social Progress Imperative
The United Nations sustainable development goals are an ambitious commitment by the world’s leaders to improve the wellbeing of all people and ensure environmental sustainability by 2030. The Social Progress Index is a comprehensive measure of the sustainable development goals to help decision makers monitor progress and prioritize actions that accelerate social progress.
Better Business Cases Certification White Paper
It all begins with an idea.
This article is an extract from "Better Business Cases Certification White Paper," a publication by APMG International
Public sector bodies around the world invest vast sums of money each year on new or replacement assets such as buildings, equipment and facilities. With so much demand for investment it is essential that we make the right choices and demonstrate value for money.
The Case For a Business Case
Gartner studies suggest that 75% of projects are considered to be failures by those responsible for initiating them, meaning the solutions fundamentally did not achieve the agreed objectives or they missed deadlines and/or came in over budget. Half of projects exceeded budget by 200%!
Putting the Right Foot Forward
The “start” is not the beginning of the project itself, but its point of conception and can be traced back to how the business case for the proposed project is approached.
A research article entitled Building Better Business Cases for Investments focused on how business cases were developed for investments and how those practices related to successful outcomes across 100 European organizations.
The research revealed that while constructing a business case prior to investment is the norm, there are significant problems with the quality of the business cases and the process used to create them.
Despite it being common practice, 65% of respondents said their organizations were not satisfied with their ability to identify all the available benefits, with 69% reporting that they do not adequately quantify and place a ‘value’ on the benefits for inclusion in the business case.
Although implementation issues frequently reduce or eliminate the achievement of the intended benefits, research suggests that the benefits described in the business case were often never achievable in the first place. These benefits are often either exaggerated to obtain funding, or there was insufficient understanding of the business changes needed to achieve the benefits.
The Five Case Model
The British Government has implemented a Better Business Cases framework for creating successful business cases. In New Zealand, the Treasury created a concise version.
Rodney Barber, The Treasury’s BBC programme lead for New Zealand and a member of the International BBC Steering Committee recently spoke at a project management seminar. He explained BBC as “both a thinking and a stakeholder engagement process”. “It is not a writing process,” he explains emphatically. “It takes you as far as the investment decision so that there is clear agreement between the sponsor and the decision maker on what the scope is and what the best value for money option is and who is going to pay for it. The approach won’t inform policy or strategy, in fact the first thing it will do is test strategy.”
“The heart of BBC is the Five Case Model,” Rodney continues. “There are only ever five questions that any governing body or decision-maker is going to want the answer to if they are going to invest.
Those questions are:
■ The strategic case: Is there a compelling case for change?
■ The economic case: Does the preferred investment option optimize value for money?
■ The commercial case: Is the proposed deal commercially viable?
■ The financial case: Is the spending proposal affordable?
■ The management case: How can the proposal be delivered successfully?
These questions are articulated in the Five Case Model which covers the five key elements of best-practice business cases. Further to the Five Case Model is the pathway of the Better Business Cases process, which can be used to select which type of business case best delivers the required decision. Large-scale and/or high-risk projects require a more in-depth business case than smaller projects.
As much as anything, the framework is a common language that everyone can use when working on a business case. According to Barber it is about “bringing transparency to the trade-offs and giving the key stakeholders visibility to your thinking. The delivery risk is not part of the approach and it will not manage the project past the investment decision – you need good project and programme management to deliver the project once you have got the money,” he explains.
The whole point of the Better Business Cases approach is to help you make the right decision in the first place so that, as long as you have good project management along the way, the likelihood of the project meeting expectations will be greatly increased.
The Five Case Model provides the framework and tools to enable effective decision-making when scoping and planning spending proposals in a robust and thorough manner and can be used at strategic, programme and individual project levels. Its use should always be proportionate to the level at which it is being applied as well as the cost and risk associated with the investment.
NZ Treasury Gateway Review Lessons Learned Report 2017 Extract
The top eight themes have remained fairly consistent over the 200 New Zealand Gateway reviews to date, but the rankings are changing over time.
The top eight themes have remained fairly consistent over the 200 New Zealand Gateway reviews to date, but the rankings are changing over time. Analysis of the trends in theme ranking identifies some key issues: `
Governance is a significant and growing concern, in part because the increasing trend towards large complex multi-agency and all-of-government projects requires a lift in capability. There are significant concerns that expectations are exceeding capability in this area. `
RAID (Risks, Assumptions, Issues and Dependencies) management is a consistently weak area in the majority of projects reviewed.
Although the number of recommendations around Business Cases has dropped since the introduction of Better Business Cases (BBC), it remains a key theme and there is still significant uncertainty about use of the BBC process, in particular:
how the process is applied to programmes
the breadth and depth of detail that needs to be included in the documents
how the process can be usefully scaled to ensure the documentation is a good match for the scale of the initiative..
The findings from Gateway reviews are in alignment with issues identified by other corporate centre processes including the Investor Confidence Rating.
Gateway Lessons Learned analysis, with information derived from other central agency processes contributes to the Treasury’s understanding of the issues, underlying problems and trends in government projects and has helped to identify key areas of focus for the Corporate Centre, for example: `
The Procurement Functional Leadership (PFL) programme is working to improve government’s procurement capability and performance and deliver better value through its procurement activity. It has developed systemwide initiatives to develop government’s commercial skills and practice, improve supplier engagement and development, and deliver benefits through collaborative procurement. `
The Corporate Centre, led by SSC, is considering what could be done for further develop commercial capability across government. `
The Treasury’s Investment Management and Asset Performance group (IMAP) is working to further develop Better Business Cases to increase support to agencies, in particular by the extension of Business Case Clinics beyond ‘capital intensive’ agencies and introduction of a tailored version suited to projects following an agile development methodology. `
Treasury’s introduction of the Investor Confidence Rating will enable Corporate Centre to target monitoring and interventions to focus on agencies and projects which require more assistance.
Evaluation of the Better Business Case framework in New Zealand 2015
In 2015 Joe Flanagan, the author of the Five Case model and the chair of the International BBC Standards Board, evaluated the use of BBC across the NZ State Sector.
Extract from the New Zealand Better Business Case Evaluation Report on the NZ Treasury website.
In 2015 Joe Flanagan, the author of the Five Case model and the chair of the International BBC Standards Board, evaluated the use of BBC across the NZ State Sector. He found:
significant improvement in the quality of business cases since 2013
good application to capital projects, with a marked increase in the use of programme business cases to support organisational change and transformation initiatives.
a need to better link the business case approach to policy development and strategic planning.
a tendency for agencies to develop business cases with a focus on a particular solution, rather than considering a range of viable options.
He suggested:
take a wider sector and country perspective to improve effectiveness over the longer term by transforming the way public services are delivered (eg. cross agency initiatives).
apply the business case framework to a broader range of investments, rather than just those with a capital or project-based focus.
the Five Case Model within the BBC programme is relevant to robust strategy and policy development and BBC could form the basis for addressing this gap in the future.
In response to these findings, the Treasury;
encouraging agencies to utilise the services available on the Treasury website and think more broadly about the use of business cases to underpin other types of investment decisions than those involving capital resources.
released revised business case guidance to clarify what's expected to ensure the business case is fit for purpose, bring a principles-based approach to the use of methods and tools for gathering the evidence needed to develop the business case, give greater clarity to the relationship between strategy and policy, provide greater clarity on how each type of business case supports what types of decisions being sought in the Governments annual budget process,
introduced clinics.
Here is a link to the Treasury website http://www.treasury.govt.nz/statesector/investmentmanagement/plan/bbc