At its core, the Treasury’s Better Business Cases™ framework answers five key questions: this is the Five Case Model.
The five cases are the organising framework for a Better Business Case:
- Strategic Case – what is the compelling case for change? What are the benefits?
- Economic Case – What are the options? What is the best option for New Zealand?
- Commercial Case – is the proposed procurement commercially viable? Can the market deliver?
- Financial Case – Is the investment proposal affordable? How will we fund it?
- Management Case – how will the project organise for successful delivery?
The Five Case model has been the required standard for government business case in the UK since the early 2000s. In 2018 the G20 adopted it as an international standard for infrastructure projects.
In New Zealand, the Better Business Cases framework aligns the Five Case model to the Cabinet-required two-stage approvals process for major investments. All capital expenditure, asset disposal, lease arrangements and ‘as a service’ investment proposals that require Cabinet approval must follow this two-stage approval process unless otherwise agreed with The Treasury.
- The five cases are developed in increasing detail at each business case stage, as shown below.
- This two-stage approach:
- supports Cabinet/Ministerial decision rights
- provides off-ramps if a decision is taken not to proceed, thus helping agencies avoid doing too much work too early
- maintains supplier market confidence by not approaching the market without formal approval from decision-makers.

Setting up for success
An organisation executive or senior manager must own and take personal responsibility for each case, to ensure appropriate internal stakeholder involvement and ownership throughout the business case development. Analysis and writing may be outsourced; it is not acceptable to outsource the leadership and thinking. For example:
- the Senior Responsible Owner (SRO), who is accountable for the overall success of the project and owns the overall business case, should own the Strategic Case
- the CFO should own the Financial Case
- the PMO Manager or Project Manager should own the Management Case.
The Strategic Case
The purpose of the strategic dimension of the business case is to make the case for change and to demonstrate the proposed initiative’s strategic fit.
Demonstrating that the proposed initiative provides synergy and holistic fit with other projects and programmes within the strategic portfolio requires an up-to-date organisational business strategy that references all relevant local, regional and national policies and targets.
Making a robust case for change requires a clear understanding of the rationale, drivers and objectives for the proposal, which must be SMART – specific, measurable, achievable, relevant and time-constrained – for the purposes of evaluation on completion of the initiative.
Key to making a compelling case is a clear understanding of the existing arrangements – business-as-usual (BAU), business needs (related problems and opportunities), potential scope (the required organisational capabilities) and the potential benefits, risks, constraints and dependencies associated with the proposal.
The challenges are:
- To explain how further intervention and spend on key ‘inputs’ will deliver ‘outputs’ that improve the organisation’s capability to deliver better outcomes and benefits to stakeholders and customers, while recognising the associated risks.
- To ensure the organisation’s proposals focus on business needs that have been well researched and are supported by service demand and capacity planning.
- To ensure initiatives are planned and delivered as part of an approved organisational strategy that has a well-defined portfolio of related programmes and projects.
Strategic Context
Organisational overview
Alignment to strategic intentions
The case for change
Investment objectives
Potential scope and services
Main benefits
Main risks
Key constraints, dependencies and assumptions
The Economic Case
The purpose of the economic dimension of the business case is to identify the proposal that delivers best public value to society including wider social and environmental effects.
Demonstrating public value requires a wide range of realistic options to be appraised (the ‘long-list’), in terms of how well they meet the proposed initiative’s spending objectives and critical success factors; and then a reduced number of possible options (the ‘short-list’) to be examined in further detail.
The ‘short-list’ must include the status quo option (business-as-usual (BAU), or ‘do nothing new’), a realistic and achievable ‘do minimum’ that meets essential requirements, the preferred way forward (if this is different) and any other options that have been carried forward. These options are subjected to cost-benefit analysis (CBA) including Wellbeing/Living Standards framework analysis, to identity the option that offers best public value to New Zealand.
The challenges are:
- To begin by selecting the ‘right’ options for scope, solution, service delivery, implementation and funding; otherwise options will represent suboptimal value from the outset.
- To justify higher cost options in relation to the status quo and the ‘do minimum’
- To measure and/or monetise the benefits and risks and identify trade-offs between cost and non-monetisable value.
Critical success factors
Long-list options
The Preferred way forward
Short-list options and options assessment
Economic assessment of the short-list options
Non-monetary benefits and costs
Risk and uncertainty
Testing the robustness of the options analysis
Preferred option
The Commercial Case
The purpose of the commercial dimension of the business case is to demonstrate that the preferred option will result in a viable procurement and a well-structured Deal between the public sector and its service providers.
Demonstrating a viable procurement requires an understanding of the marketplace, knowledge of what is realistically achievable by the supply side, and research into the procurement routes that will deliver best value to both parties.
Putting in place a well-structured Deal requires a clear understanding of the services, outputs and milestones required to be achieved and of how the potential risks in the design, build, funding and operational (DBFO) phases of the initiative can best be allocated between the public and private sectors and reflected in the charging mechanism and contractual arrangements.
The challenge for the public sector is to be an ‘intelligent customer’ and to anticipate from the outset how best public value can continue to be secured during the contract phase in the face of inevitable changes to business, organisational and operational requirements.
Procurement strategy
Required services and outputs
Risk allocation
Payment mechanisms
Contractual arrangements
Personnel implications
Accountancy treatment
Evaluation of best and final offers
The negotiated deal and contractual arrangements
Confirmation of Commissioner’s support
The Financial Case
The purpose of the financial dimension of the business case is to demonstrate the affordability and funding of the preferred option, including the support of stakeholders and customers, as required.
Demonstrating the affordability and fundability of the preferred option requires a complete understanding of the capital, revenue and whole-of-life costs of the proposed initiative and of how the Deal will impact upon the balance sheet, income and expenditure and pricing arrangements (if any) of the organisation.
The challenge is to identify and resolve any potential funding gaps during the lifespan of the proposed initiative.
Financial costing model
Capex and Opex requirements
Financial implications of the deal
Impact on balance sheet
Overall affordability and funding
Confirmation of support
The Management Case
The purpose of the management dimension of the business case is to demonstrate that robust arrangements are in place for the delivery, monitoring and evaluation of the initiative, including feedback into the organisation’s strategic planning cycle.
Demonstrating that the preferred option can be successfully delivered requires evidencing that the scheme is to be managed in accordance with good practice, subjected to independent assurance and that the necessary arrangements are in place for change and contract management, benefits realisation and risk management.
The challenges are:
- To manage the risks in the design, build, funding and operational phases of the initiative and to put in place contingency plans.
- To deal with inevitable business and service change in a controlled environment.
- To ensure that objectives are met, anticipated outcomes are delivered and benefits are evaluated.
Programme management governance arrangements (if applicable)
Project management arrangements
Change management arrangements
Benefits management arrangements
Risk management arrangements
Contract management arrangements
Post-project evaluation arrangements