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Better Business Cases™ for high risk projects

For all capital expenditure, lease and asset disposal proposals that require Cabinet approval, the Better Business Cases two-stage approval process must be followed unless otherwise agreed with Cabinet or the Treasury.

Supporting ministerial decision-making rights

Cabinet has investment decision rights on all investment proposals where the investment requires new Crown funding or support, is High Risk or has significant policy issues. Cabinet must also be given the opportunity to consider investment proposals that have significant fiscal and policy implications or could affect the government's reputation in the marketplace. 

  • Cabinet documents setting out expectations and requirements are listed in Related external links below.

Two-stage Cabinet approval required

High Risk projects must follow the two-stage Cabinet approvals process.  The purposes of this two-stage process are to:

  • give ministers the opportunity to consider a long list of options before they’re discarded (to support ministerial choice of direction)
  • confirm ministerial support before approaching the market (to maintain market confidence in government procurement)

Stage 1: Indicative Business Case. Decision-makers consider and approve:

  • the preferred way forward (a short-list of options, based on analysis of a long-list)
  • the project to proceed with more detailed assessment of the short-list options
  • the project to engage with market suppliers through a Request for Information (RFI).

Stage 2: Detailed Business Case. Decision-makers consider and approve:

  • the preferred option
  • the project to proceed to formal market engagement through a Request for Proposal (RFP) or Request for Tender (RFT) process
  • the project to finalise the arrangements for the successful implementation of the preferred option, through an Implementation Business Case.

Related requirements

Before starting work on a Business Case, a project assessed as high risk (through the Risk Profile Assessment moderation process) must complete:

  1. A Business Case Scoping document, to agree the Business Case approach, decision pathway, effort, and assurance requirements with their Treasury Vote Analyst, monitoring agency (if any) relevant functional leads and Te Waihanga – Infrastructure Commission:
  2. A Strategic Assessment, which justifies the need to invest in change and obtains (internal agency) approval to proceed to business case development.

Are you facing time pressure to submit an investment proposal?

When decisions need to be made rapidly for reasons outside agency control – for example in order to keep attractive options open, or because Cabinet is directing officials to expedite decisions, then the Treasury will work with you to help make it happen. Check the guidance below and contact your Treasury vote analyst immediately.

Expediting Investment decisions

Scope of the business case requirements

Use the table below when considering how to tailor the business case templates for your project.

Left is a more full analysis and right is a more light analysis

  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 required Multi-criteria decision analysis Ranking of non-monetary benefits and costs
Uncertainty Quantitative risk analysis (QRA) required Quantify risks and probabilities[1] Single point adjustments of costs and benefits
Assurance Fully costed assurance plan required
Gateway reviews required
Fully costed assurance plan required
Gateway reviews available on request
Assurance plan required
Gateway reviews available on request

Assurance

ICT-enabled state sector projects assessed as high risk must prepare costed assurance plans. Contact [email protected].

Assurance plans for high risk projects must include Gateway reviews.  A Gateway Review is normally required as each stage of the Business Case (Indicative BC, Detailed BC, Implementation BC) nears completion.  There is an 8-10 week lead time for contracts and logistics, so get in touch early: [email protected].

Treasury can facilitate Business case clinics for projects assessed as high risk. Clinics bring Treasury and other system leads together in one workshop to provide consolidated feedback on a business case under development. If you’re interested in requesting more information or requesting a clinic, please contact your Treasury Vote Analyst or Treasury IMAP investment advisor, or email [email protected]

Guidance

Indicative Business Case (IBC)
Detailed Business Case (DBC)
Implementation Business Case (ImBC)

< to BBC Pathways navigation diagram> 

Note:
  1. [1] Consider risk modelling techniques that are less resource intensive than full quantitative risk analysis. For example, by using multi-point probability or decision-tree analysis to estimate the impacts of different outcomes on mid-point risk estimates.
Last updated: 
Friday, 26 March 2021