Better Business Cases™ for Programmes

When a Programme Business Case (PBC) is needed

Programmes are about managing change, based on a strategic vision and a roadmap of how to get there.  They typically comprise a number of related projects and activities that will be completed in tranches over an extended period to achieve outcomes that are greater than the sum of the parts.  For example:

• Policy change focussed on changes and improvements in society; driven by desired outcomes but likely to be ambiguous and complex to define in terms of what is involved.
• Fundamentally changing the way an organisation works is led by a vision of the outcomes and the benefits; typically some uncertainty about the change but clear delivery approaches can be used.
• A highly complex, lengthy project that is best broken down into a series of related projects and managed as a programme.

More detail: Project or Programme?

Two-stage Cabinet approval required

Because of their scale and risk, programmes are required to follow the two-stage Cabinet approvals process:

1. The first stage is the Programme Business Case (PBC), to inform the decision to invest in a programme of change that optimises potential value for money.  This is the equivalent of an Indicative Business Case for a project.
2. Once approved, a PBC must be supported by appropriate business cases for individual initiatives and/or tranches within the programme (depending on their risk and scale).  For possible pathways see Next steps below.

Programme prerequisites

Before starting work on a PBC, a programme must complete:

1. A Risk Profile Assessment, which establishes the inherent risk profile for the programme and drives the level of support and oversight from system leads[1]:
   • Risk Profile Assessment (RPA)
2. A Business Case Scoping document, to agree the Business Case approach and level of effort required, decision pathway, and assurance requirements with Treasury and other relevant system leads
   • Business Case scoping document
3. A Programme Strategic Assessment, which justifies the need to invest in change and obtains (internal agency) approval to proceed to PBC development.
   • Strategic Assessment

The purpose of a programme business case

The Programme Business Case is used to seek early approval to start a preferred programme of work, to underpin subsequent business cases and to review the ongoing viability of the programme at key points. It provides an early opportunity for the organisation and key stakeholders to influence the direction of the investment proposal and to avoid too much effort being put into developing investment proposals and options that should not proceed.

The primary purpose of a Programme Business Case is to inform the decision to invest in a programme of change that optimises potential value for New Zealand . The PBC defines the scope of the programme, giving an understanding of what the programme is, where its boundaries are, and the likely overall cost and funding envelope.  It must include:

• the rationale for undertaking the programme and how it contributes to the organisation’s strategies
• what the programme is aiming to achieve (from the current state to a future state)
• where the boundaries of the programme are, and its relationship to other work.
• the value proposition, including the benefits likely to flow from the programme
• its achievability (the capability, potential suppliers, internal and external support and resources to succeed)
• the broad timeframes for the programme
• Recommendation of a preferred way forward for further development of the investment proposal
• identification of key asset and non-asset based projects and activities to support the programme outcomes, including proposed programme tranches and off-ramps
• the overall cost envelope (as a range) and an affordability assessment 
  • a PBC is not used to request funding for an entire programme but will identify the funding envelope, to seek agreement-in-principle for the programme to proceed
  • it can be used to seek funding to conduct further analysis or develop further business cases.

The PBC becomes one of the core planning documents for the programme, and acts as a reference throughout the programme’s lifecycle (in this respect it is a living document and should be kept current).  Each project/tranche business case should revisit the PBC and provide an update on any material changes to the programme drivers, benefits, approach, timeline or costs since the completion of the previous business case, and can be used as the basis for seeking:

• formal confirmation to continue to invest in the overall programme

• formal agreement from governance to the mix of projects and activities that constitute the next tranche.

How does a programme business case differ from a project business case?

Though they both aim to provide clarity to decision makers about the value of a proposal, a Programme Business Case differs from a Project Indicative Business Case in two key ways:

• It often takes a system-, service- or sector-wide perspective rather than a functional or agency specific view.

• Programme business cases are likely to be less specific than you would see in an individual project business case.  More detailed choices subject to further analysis and consideration are deferred to detailed analysis in the business cases for the constituent projects.

A programme business case will not usually have detailed cost-benefit-analyses, schedules, financials or specific procurement information.  The figures are necessarily high-level and must be refined as work proceeds.  Detail will be in project-level Detailed Business Cases (or individual business cases for a “tranche[2]” or group of projects).  There should, however, be sufficient flesh on the bones of the programme to be able to meaningfully engage with relevant stakeholders for the purpose of the decision required.

The balance between providing the right level of quantitative analysis in a programme business case, and not spending too much time developing specific figures for costs and benefits is not always easy to ascertain, and is reached through ongoing discussion.  Work with your Treasury advisors.

Guidance

Assurance

All significant projects, of all types, are required to have and follow Assurance Plans appropriate to their scale and risk.

ICT-enabled state sector projects and programmes assessed as High Risk are required to prepare costed assurance plans. Contact [email protected]

Programmes and projects assessed as High Risk must include Gateway Reviews in their Assurance plans. They are normally required to have a review (usually a combined Gate 0: Strategic Assessment/Gate 1 Business Justification & Options) as the Programme Business Case 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 programmes 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 interested in requesting more information or requesting a clinic, please contact your Treasury Investment Advisor or Vote Analyst or email [email protected].

Next steps

The Programme Business Case is equivalent to an Indicative Business Case for a project.

Once approved it must be supported by appropriate business cases for individual initiatives within the programme (depending on their size, scope and risk), as agreed with Cabinet, agency governance, Treasury or monitoring agency, as appropriate:

• Indicative Business Case (IBC) for a significant project within the programme, or for a tranche - if significant options analysis for the tranche or project is required.
• Detailed Business Case (DBC), if options have been adequately addressed in the Programme Business Case (often the case for the key project(s) in the programme).
• Single Stage Business Case (combining Indicative and Detailed) for less significant projects within the programme (small, low risk).