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. Analysis of the trends in theme ranking identifies some key issues: `

1. 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.  `

1. RAID (Risks, Assumptions, Issues and Dependencies) management is a consistently weak area in the majority of projects reviewed.      

1. 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:

1. how the process is applied to programmes

   1. the breadth and depth of detail that needs to be included in the documents

   2. 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.

1. 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: `

2. 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. `

3. The Corporate Centre, led by SSC, is considering what could be done for further develop commercial capability across government. `

4. 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. `

5. 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.

http://www.treasury.govt.nz/statesector/investmentmanagement/review/gateway/lessons/gateway-lessons-learned-report-jul17.pdf

Evaluation of the Better Business Case framework in New Zealand 2015

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

What is the Prosperity Fund?

The Prosperity Fund aims to reduce poverty across the world by removing barriers to economic growth.

The Global Infrastructure Programme (GIP) aims to improve the provision of infrastructure as a critical enabler for economic development in middle income countries.

GIP works with partner countries, facilitated by the Prosperity Fund,  to expand the use of three leading infrastructure project planning, preparation and delivery methodologies:

The Five Case Model (5CM) – improves business case development and planning.

• The Project Initiation Route map (PIR) – helps set up projects and programmes for success.

• Building Information Modelling (BIM) – a collaborative approach through digital technology.

On 3 July 2018 British Ambassador to Indonesia, Moazzam Malik and CEO of IPA, Tony Meggs signed a memorandum of understanding with the Deputy of Infrastructure – BAPPENAS, Wismana Adi Suryabrata, to formally agree common goals and begin the delivery phase.

The Power of Public Investment Management

This article is an extract from "The Power of Public Investment Management," a publication by the World Bank

The uncertain socio-economic prospects and tight fiscal conditions increase the need to get higher value for money and greatest benefit for public spend.

The drivers of an inefficient Public Investment Management are:

• Weak inter agency coordination projects driven by political considerations

• Projects needing multiyear commitment with weak budget system

• Large projects requiring problematic, site acquisitions, consideration of environmental safeguards and complex procurements resulting in delays and cost overruns

• Increasing need for large investments in human and physical capital and economic infrastructure and poverty reduction

The critical features of a Public Investment System are:

1. Investment guidance, project development and preliminary screening

2. Formal project appraisal

3. Independent review of appraisal

4. Project selection and budgeting

5. Project implementation

6. Project adjustment

7. Facility operation

8. Basic completion review and evaluation

The first two features are key to enhance public value and wealth creation by selecting, and designing projects with positive net benefits

The change themes to improve Public Investment Management require careful thought and sequencing depending on the strengths and weaknesses of the existing Public Investment System. The potential themes to inform the change programme could be:

• Focus on better implementation first

• Focus on better planning first

• Establish a centre of excellence

• Establish a centre of power (e.g. politicians)

• Decentralise or centralise

• Legal change first (change the law)

• Increase transparency (of information to the public)

The Public Investment System needs to be able to cope with uncertainty. We cope with uncertainty by:

• Not being risk averse or overly optimistic

• Engaging key stakeholders including users

• Using contingency approvals

• Stopping projects if they are no longer needed or viable

• Allow agencies to adjust the pace and nature of implementation