BBC Programme Business Case Template and Guidance October 2019

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Template and Guidance
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Programme Business Case (PBC)
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Template Version: October 2019 (check Treasury website for updates)

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Programme Business Case
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Contents
On completion of PBC development, update this ToC after deleting the Guidance sectionsi
Before you start: Programme Business Case (PBC) overview <go to PBC
planning guidance>.....................................................................................................4
Executive Summary....................................................................................................6
The Strategic Case – making the Case for Change <go to guidance>....................10
The Economic Case – Exploring the Preferred Way Forward <go to guidance>.....17
Commercial Case <go to guidance>.........................................................................24
Financial Case <go to guidance>..............................................................................26
Management Case <go to guidance>.......................................................................28
Annexes.....................................................................................................................30
Annex 1: Commissioner’s Letter...............................................................................31
Annex 2:....................................................................................................................32
Annex 3…..................................................................................................................33
Annex X:....................................................................................................................34
Better Business CasesTM – Programme Business Case – Guidance.......................35
The Strategic Case – Making the Case for Change.................................................39
Economic Case – Exploring the Preferred Way Forward.........................................50
Commercial Case......................................................................................................62
Financial Case...........................................................................................................66
Management Case....................................................................................................68
Annex 1: Considering PPP and alternative procurement options.............................73
Annex 2: Worked Example of a Long-list Options Assessment................................76
Annex 3: The 34 Better Business CasesTM actions...................................................77
Annex 4: References.................................................................................................78
Programme Business Case | 1

<Agency name>: < Programme Name>
Before you start: Programme Business Case (PBC)

overview <go to PBC planning guidance>
The Programme Business Case documents an organisation’s thinking around a proposed
programme of work. It must be developed with the involvement of leadership and key
stakeholders within the organisation. We strongly recommend a facilitated workshop-based
approach to each of the five cases, to ensure that key stakeholders are engaged early and
have an opportunity to challenge and shape the direction of the investment proposal.
This document provides both a template and guidance for completing a Programme
Business Case (PBC). It sets out good practice for a programme business case, but
organisations and writers need to test the relevance at each step. Some sections will not be
relevant for some cases, and in other instances, topics should be addressed which are not
included in this document. The primary driver must be whether the information is
required to inform the next decision-point; for a PBC, this is Cabinet:
 Agreement in principle to the preferred way forward
 Approval to develop subsequent tranche and/or project-based business cases
(Detailed Business Case or Single-Stage Business Case, as appropriate).
Purpose of the Programme Business Case
A Programme Business Case follows from the Programme Strategic Assessment (SA),
which justifies the need to invest in change.
The primary purpose of the Programme Business Case is to support the decision to invest in
a programme of change that optimises potential value for money. It provides an early
opportunity for the organisation and key stakeholders to influence the direction of the
investment proposal, and to avoid the agency putting too much effort into developing
investment proposals and options that should not proceed. A PBC:
 confirms the need to invest and the case for change, the strategic context and how the
proposed investment fits within that strategic context (update to SA)
 recommends a preferred programme and a preferred way forward for further
development of the investment proposal
 identifies the key asset and non-asset-based projects and activities that will support the
programme outcomes, including proposed programme tranches
 seeks the approval of decision-makers to the preferred way forward, and to develop
subsequent project/tranche business cases (Detailed or Single Stage, as appropriate).
The PBC should be revisited at the start of each project/tranche business case. Each
business case should provide an update on any material changes to the programme drivers,
benefits, approach, timeline or costs since the completion of the previous business case.
2 | Programme Business Case

The business case development process is organised around a ‘five-case’ structure

designed to systematically answer five key questions, as briefly as possible to provide the
required information:
 Is there a compelling case for change? (Strategic case)
 Does the preferred investment option optimise value for money? (Economic case)
 Is the proposed option commercially viable? (Commercial case)
 Is the spending proposal affordable? (Financial case)
 Can the proposal be delivered successfully? (Management case).
Text in blue italics, boxed or not, is commentary and guidance for drafting purposes; delete it
when no longer required.
Text in black is suggested wording for the business case document – feel free to use it or
your own wording.
Text highlighted in Yellow should be updated (for example, dates, table numbers)
The second part of this document provides more detailed guidance for each section, and is
accessed by links from each section in the template ( <go to guidance> ).

Executive Summary
Write this last, and keep it short! The executive summary is the key output for decision-
makers around whether to invest (approval in principle to proceed) and in what
solution(s)/options. It should meet the needs of decision-makers by setting out the key
aspects of the business case in a concise and accessible form. Structure the summary to
follow the five-case model, to allow better comparison between business cases. The
executive summary can be the basis for other documents (eg communication, engagement
with others, information to stakeholders) but may need tailoring, especially if commercials
that may be sensitive are included.
Introduction
If there is no executive summary, retain the Introduction and Next Steps sections.
Text
In plain English, describe the investment proposal in one or two sentences. State what
decision-makers are being asked to consider or decide.
 What is it purchasing, in broad terms, and what will be delivered?
 What is the initiative type? Cost pressure, expansion of existing service, regulatory
initiative, completely new investment…
 If it contributes to one or more of the five priority areas, outline which one(s) and how.
This Programme Business Case seeks formal approval to state briefly and clearly what
decisions are sought
State what decision-makers are being asked to consider or decide.
The purpose of this programme business case is to:

 confirm the strategic context and fit of the proposed investment
 confirm the case for change and the need for investment
 recommend a preferred programme and a preferred way forward for further
 identify the projects that will support the delivery of the programme, including proposed
tranches, and
 seek the early approval of [decision-makers]
o Agreement in principle to the preferred way forward
o Approval to develop subsequent tranche and/or project-based business cases
(Detailed Business Case or Single-Stage Business Case, as appropriate).
This Programme Business Case follows the Treasury Better Business Cases guidance and
is organised around the five case model.

Strategic Case
Summarise the strategic context for the proposed investment from the Strategic
Assessment, with particular reference to supporting strategies, programmes and plans.
The Strategic Case summarises and updates the strategic context for the investment
proposal and the case for change as detailed in the Programme Strategic Assessment.
The strategic context for this investment is…
The case for change

Key stakeholders identified the following investment objectives for this investment proposal.
Table 1: The case for change is summarised for each investment objective below.
Investment ………….
Objective One
Existing
Arrangements
Business
Needs
Objective Two
Existing
Arrangements
Business
Needs
etc
Economic Case
Set out the key findings of the analysis of programme options and the overall conclusions,
including a description of the preferred programme and the project mix. Include range-based
estimates of the indicative costs and benefits of the proposed programme.
We strongly recommend a workshop-based approach to getting consensus on these areas.
Note that Investment Logic Mapping (ILM) workshops with a facilitator accredited by the
Department of Treasury and Finance, Victoria, Australia, are mandatory for high-risk
programmes and projects.1
Potential programme options

Within the potential scope of this proposal, the main programme options were identified by
key stakeholders at a facilitated workshop held on [dd mmm yyyy]. The potential programme
options identified include
 List and briefly describe
1
https://www.dtf.vic.gov.au/support-departmental-users/book-investment-management-standard-facilitator

The preferred way forward

The main programme options were evaluated against the investment objectives and critical
success factors to determine the preferred approach. The recommended preferred
programme is describe
The project mix

The following tranches, showing the mix and sequencing of projects, are recommended for
progressing the preferred programme.
 List and briefly describe each tranche; if possible list the current allocation of projects
to tranches and the rationale. Note this is based on current information and may
change.
Briefly explain the process used to agree the tranches; single facilitated key stakeholder
workshop, multiple workshops, stakeholders all together or in groups, decision-making
process…
Indicative costs and benefits

The estimated rough-order costs and benefits for the preferred programme over the period
20xx to 20xx are outline
Commercial Case
Provide an assessment of the likely commercial viability of the proposal. Outline the
procurement strategy and highlight the potential for non-traditional procurement, where
applicable. Most programmes will have a number of procurements, with various deals. It is
unlikely that there will be a potential deal at a programme level; deals may be at a tranche
level or for individual projects, of which there may be many within many tranches.
The Commercial Case outlines the proposed deal(s) in relation to the preferred way forward.
List and briefly describe the key material procurements
Provide an initial outline of the commercial case to provide decision-makers with some
assurance on the likely commercial viability of the proposal, potential suppliers, and where
those suppliers may be utilised. This is particularly relevant for innovative or more complex
services where there may be little market depth and experience. List here the key
procurements that are likely to be required as part of the programme; the detailed
consideration of the commercial case takes place at the Detailed Business Case stage for
the individual tranches/major projects within the programme.
Financial Case
The Financial Case demonstrates that the overall programme is affordable and outlines the
funding requirements for the programme tranches identified in the management case below.
Provide the rough-order cost estimates and an assessment of the ability of the organisation
to meet these. Decision-makers will expect a best-possible indication of the funding required
and its affordability. Ensure the primary funding sources for the programme are identified,
including mixes between different organisations. Identify funding gaps and areas where
decision-makers will need to make further funding decisions.

Management Case
Summarise the key programme management arrangements and key programme milestones.
Identify the overall methodology and the approach that will be taken to manage the
programme on an on-going basis.
The Management Case addresses the achievability of the proposal and planning
arrangements required to both ensure successful delivery and to manage programme risks.
The programme governance structure and initial programme milestones are provided below.
Next Steps
This programme business case seeks approval from decision-makers to start the preferred
programme of work and to proceed with developing:
There are multiple options for the next steps. Specify here what has been discussed and
agreed with Treasury and/or Ministers and/or Cabinet, for example:
 Detailed (or Single Stage) Business Case for the first tranche
 Indicative [and then Detailed] Business Cases for [specify] high risk/high value
project(s)
 Direct to Detailed Business Case(s) for [specify]
This decision is made by [name of body] and will be formally recorded in [name of formal
record].

The Strategic Case – making the Case for Change <go to

guidance>
This part of the strategic case confirms the strategic context for the investment proposal and
makes a compelling case for change.
Strategic Context
Summarise the strategic context for the proposed investment, with particular reference to
supporting strategies, programmes and plans. Source this information from the previous
Strategic Assessment and update for any changes. Note that strategy does not necessarily
refer just to an organisation’s strategy, but could also refer to a government strategy, a
sector strategy, a functional/systems strategy (e.g. GCDO).
The strategic context provides an overview of the organisation and the outcomes that it is
seeking to achieve, or contribute to, through its operations.
Organisational Overview
Provide a brief outline of the organisation, of what it is seeking to achieve, current activities,
available resources and the environment in which it operates. Current planning documents
should also be referenced wherever possible.
The summary of the operating environment should also consider what externally-driven
factors are driving the need to invest.
Source this information from the previous Strategic Assessment and update for any
changes.
The key aims of the organisation are to describe

The core activities of the organisation are:
Analysis of the current and expected operating environments has identified the following key
factors for the organisation:
Contribution to existing strategies
Demonstrate how the proposal contributes to relevant national, regional, sector and
organisational strategies. Take a wellbeing approach where appropriate and refer to the
Living Standards Framework (LSF). Where the proposal is part of a larger portfolio of related
programmes or projects, outline the inter-dependencies.
Outline how the proposal will help to achieve the business goals, strategic aims and plans of
the organisation. The proposed investment should contribute to, and be consistent with,
organisational strategic business planning.
Source this information from the previous Strategic Assessment and update for any changes

The investment proposal aligns to the following Government/sectoral/ regional/organisational

policies, strategies and goals
 List and briefly describe how the investment aligns with/supports the delivery of the
specified policy/strategy
Include a summary of the stakeholder analysis to date, including an influence/interest grid for
key stakeholder groups. More detail, including the stakeholder map, management plan and
communications plan, can be included in the annexes and referenced here. Source this
information from the previous Programme Strategic Assessment and update for any changes
Provide evidence of support from key stakeholders of the need to invest.
The key stakeholders that have an interest in the expected outcomes or can influence the
investment proposal have been identified:
 List and briefly describe their role, interest and influence
The process used to date to engage with key stakeholders and to build support for the need
for change has been to:
Summarise stakeholder engagement to date
Summarise stakeholder support/commitment
Investment Objectives, Existing Arrangements & Business Needs

A robust and compelling case for change requires a thorough understanding of what the
organisation is seeking to achieve (described by the investment objectives) and what is
currently happening (existing arrangements). The difference between the two represents the
business gap (or business needs) that this investment proposal is intended to address. This
gap analysis helps provide a compelling case for change.
Text
Investment Objectives <go to guidance>
Investment objectives specify the desired outcomes for a proposed investment. They need to
be SMART (specific, measurable, achievable, relevant and time-bound) to inform the later
assessment of potential options in Action 7 and to provide the basis for determining the
investment’s success. We recommend a facilitated ‘case for change’ workshop process to
develop and agree the investment objectives, to ensure that key stakeholders are engaged
early and have an opportunity challenge and shape the direction of the investment proposal.
Note that ILM workshops focus on problems and benefits, not Investment Objectives.
Benefits do not map directly to Investment Objectives, which may be broader (eg maintain
current level of service, minimise impact on customers…)
Facilitated case for change/Investment Logic Mapping (ILM) workshops were held with key
stakeholders in Mmm and Mmm yyyy to identify the existing business problems, likely
benefits expected from the investment, and the programme investment objectives.
Where applicable The outputs from the ILM workshops are attached as annexes; the agreed
problem statements have been used to inform the development of the programme
Investment Objectives.
The key stakeholders identified and agreed the following key investment objectives:

 Investment objective one:

….
 Investment objective two:
….
etc.
Existing Arrangements and Business Needs
For each objective, provide a snapshot of the current state, using a wellbeing approach
where appropriate. For example where an existing service is being replaced, this could
include current costs and measures of the existing services. Including metrics provides a
base to help measure the distance of travel from the status quo.
Where an ILM was undertaken, ensure that the existing arrangements capture all of the
evidence supporting the problem statements agreed at the ILM workshop.
Table xx: Summary of the existing arrangements and business needs

Objective One
Existing
Arrangements
Business
Needs
Objective Two
Existing
Arrangements
Business
Needs
Objective xxx
Existing
Arrangements
Business
Needs

Potential Business Scope and Key Service Requirements <go to

guidance>
The purpose of this section is to describe the degree or scale of change required for the
programme to be considered successful. Three different levels of investment (minimum,
intermediate, maximum) are typically considered; only those options within this range are
assessed further in the economic case:
The potential business scope and key service requirements were identified and assessed by
stakeholders at the facilitated case for change workshop held on [dd mmm yyyy] ….
Table xx: Potential business scope and key service requirements
Service Scope Assessment
Requirements
(in decreasing
order of
relevance Intermediate
Minimum Scope Maximum Scope Out of Scope
compared to the Scope
investment
objectives)
Main Benefits <go to guidance>

Potential benefits from the investment proposal represent intended (and sometimes
unintended) gains for stakeholders, whether the organisation, the wider state sector, industry
or the general public.
All significant benefits should be identified from the perspective of the benefits to New
Zealand (ie wellbeing) unless otherwise agreed with the reviewer. This recognises the wider
perspectives of public value decision-makers when making resource allocation choices.
The approach to benefits identification and measurement should be prudent, proportionate
and appropriate. Focus on the 20% of benefits that are likely to provide 80% of the
programme’s benefit value. This section builds upon the initial analysis in the Programme
Strategic Assessment. More detailed analysis is undertaken in later business cases.
Where an ILM process has been used, the benefits stated should be consistent with those
agreed at the ILM Benefits workshop. Consider including the ILM Benefits Map as an
appendix.
Stakeholders identified the following benefits at the facilitated workshop on [dd mmm yyyy]

Table xx: Analysis of primary potential benefits Consider grouping by Living Standards
Framework (LSF) domain, eg (example)
Domains Benefit
Sustainable delivery of patient care: text
Improved patient experience and outcomes: text
Health (primary) Safer and more efficient use of resources: text

Avoided lost work and productivity: text
Increased employment opportunities: text

Jobs and earnings
Māori and Pacific cultural needs are recognised: text
Cultural Identity
text
Civic
engagement and
governance
Table xx: Analysis of primary potential disbenefits , eg (example

Domains Benefit
text
text
Health (primary) text

text
text
Jobs and earnings
text
Cultural Identity
text
Civic
engagement and
governance
More information on the use of the Living Standards Framework, and the icons for the
domains, are in the guidance later in this template.
More detailed information is provided in Annex XX.

Main Risks <go to guidance>

The emphasis in the strategic case is to identify the top 20% of risks which could account for
80% of the total potential risk of the proposal. Revisit any risks first identified in the Strategic
Assessment. More detailed risk management is undertaken in later business cases; focus
here on major risks to achievement of outcomes and benefits, not risks to delivery.
In this table identify the 4-7 (use your judgement) highest impact and highest likelihood risks.
Additional high risks can be included as an annex.
Risk is an uncertain event or circumstance that, if it occurs, has a negative effect on at least
one programme objective. The most significant risks that might prevent, degrade or delay the
achievement of the investment objectives are identified and analysed below. All risks will be
monitored, managed and updated as the programme progresses.
Table xx: Initial risk analysis
Comments & Risk Management Strategies
Main Risks
(Mitigations)
1 IF (xxx happens) THEN (impact) For the key strategic level risks, outline key mitigations
2 Reference, and include as an annex, a subset of the
Risk Register with more information (max 2 pages,
landscape)
3
4
5
Optimism bias <go to guidance>
Optimism bias is the tendency of people starting an endeavour to assume that it will
succeed, even when the outcome is uncertain. Thus programmes and projects tend to
underestimate timeframes and costs and overestimate benefits, productivity and outcomes.
This means that the analysis may not reflect the possibility of cost overruns, changing
business drivers or implementation timing delays.
Consider Quantitative Risk Assessment (QRA) to give quantitative estimates of risks and
their potential impact on programme costs and estimates, including required contingency.
Note QRA is mandatory for High Risk projects at the Detailed/Single-Stage Business Case
stage, but strongly recommended for the Programme Business Case.
Based on the nature of the investment proposal, the expected net benefits should be
reduced by [xx]% to reflect the effects of optimism bias. This loading will be progressively
reduced as the accuracy of the estimates for proposal costs and benefits improves.

Key constraints, dependencies and assumptions<go to guidance>

Constraints are limitations imposed on the investment proposal from the outset. These can
include constraints on available resources.
Dependencies are external influences on the success of the programme, where success is
contingent on the future actions of others. Other initiatives may also depend on the actions of
this programme.
Assumptions are things that are accepted as true or as certain to happen, without proof. if
they are not certain to happen, they may be a risk.
The proposal is subject to the following constraints, dependencies, and assumptions.

Management strategies and registers have been developed to record management of these
and they will be carefully monitored and managed during the programme.
Table xx: Key constraints, dependencies and assumptions
Constraints Notes
C1
C2
…
Dependencies Notes & Management strategies
D1
D2
…
Assumptions Notes & Management strategies
A1
A2
…

The Economic Case – Exploring the Preferred Way

Forward <go to guidance>
The purpose of the economic case is to identify the preferred programme that optimises
value for government and New Zealand. Having established the strategic context for the
investment proposal and established a robust case for change, this part of the Programme
Business Case:
 identifies critical success factors
 identifies and assesses the programme options (or trade-offs) for delivering the service
needs
 identifies a preferred way forward based on the preferred programme
Critical Success Factors (CSFs) <go to guidance>

The following critical success factors were identified by stakeholders at the facilitated options
workshop held on [dd mmm yyyy]. Stakeholders agreed the generic descriptions [update for
proposal-specific amendments] as shown below.
Keep this as brief as possible. If this table gets unwieldy, summarise here and state The
CSFs with proposal-specific amendments are attached as Annex X.
Table xx: Critical Success Factors
Key Critical Proposal-specific Critical
Broad Description
Success Factors Success Factors
Strategic fit and How well the option:
business needs  meets the agreed investment
objectives, related business needs and
requirements, and
 fits with other strategies, programmes
and projects.
Potential value How well the option:
for money  optimises value for money (ie, the
optimal mix of potential benefits, costs
and risks).
Supplier How well the option:
capacity and  matches the ability of potential
capability suppliers to deliver the required
services, and
 is likely to result in a sustainable
arrangement that optimises value for
money over the term of the contract.
Potential How well the option:
affordability  can be met from likely available
funding, and
 matches other funding constraints.
Potential How well the option:
achievability  is likely to be delivered given the
organisation’s ability to respond to the
changes required, and
 matches the level of available skills
required for successful delivery.

Programme Options Identification <go to guidance>

The purpose of this section is to identify and assess as wide a range as possible of
programme options that reflect key trade-offs for value for money, achieve the investment
objectives and service requirements, and lie within the boundaries of the scope parameters
and critical success factors identified previously.
A wide range of programme options was generated by stakeholders at a facilitated options
workshop held on [dd mmm yyyy].
Under the five dimensions, stakeholders have identified a comprehensive long-list of in-
scope options as follows.
Table xx: Possible programme options classified by the five dimensions of choice:
Dimension Description Options within each Dimension
Scale, scope In relation to the proposal, 1. ….
and location what levels of coverage are 2. ….
possible? 3. ….
Service How can services be 1. ….
solution provided? 2. ….
3. ….
Service Who can deliver the 1. ….
delivery services? 2. ….
3. ….
Implementation When can services be 1. ….
delivered? 2. ….
3. ….
Funding How can it be funded? 1. ….
2. ….
3. ….

Programme Options Assessment <go to detailed Options

Framework guidance>
The potential programme options in each of the five dimensions were assessed against the
investment objectives and critical success factors.
The following assessment methodology was used (eg Options framework):
….
The summary assessment of each of the long-list options is included below. If necessary: A
more detailed analysis is included as Annex X.
Heading Rationale
Do nothing Summary details of the option under consideration, with reference to the
category within the options framework (eg Scope).
This option…
 Note that “Do nothing” and ‘Status quo’ may not be an option, especially
when faced with a legislative or regulatory change that requires some action;
in that case “Do nothing” should simply be listed here and immediately
discounted (rejected) with a very brief explanation. The case, in these
situations, should jump straight to ‘Do Minimum’.
Advantages Strengths and opportunities in terms of the critical success factors.
The main advantages are:

Disadvantages Weaknesses and threats in terms of the critical success factors.
The main disadvantages are:

Costs
Benefits
Conclusion Overall assessment of how well the option meets the programme’s investment
objectives and critical success factors, and whether it is the preferred way
forward, should be carried forward, or rejected in respect of the short-list.
This option would…
The long-list must include an option that provides the baseline for comparing marginal costs
and benefits of by other options. This is the “Do Nothing” option; the programme does not
proceed. The “Status Quo” option requires maintaining the current level of services without
the programme proceeding; neither may be a viable option: for example, risk of service
delivery failure, or escalating maintenance costs.
The long-list must also include a realistic ‘do minimum’ option based on the core functionality
and essential requirements for the programme.

Status quo This option…

‘Status Quo’ is not necessarily the same as ‘Do nothing’, especially if the
business case is for (eg) a replacement service or building. In this case
maintaining the status quo will require effort and resource, especially in the face
of rising support costs and increasing risk of failure where mitigation may come
with a cost. The business case may require either, both, or none of these
options.
Advantages The main advantages are:

Disadvantages The main disadvantages are:

Costs
Benefits
Conclusion This option would
Do minimum This option…



Costs
Benefits
<option title> This option…



Costs
Benefits
… repeat for each programme option
Preferred This option…

programme


Costs
Benefits

Repeat the above analysis of programme choices (by dimension) then score the choices
against the investment objectives and critical success factors, to determine the preferred
programme. The preferred programme is constructed from the preferred choices under
each of the five dimensions.
Format for the stakeholder assessment of choices.
Repeat this table for each of the five dimensions of choice, to show how the preferred way
forward is derived:
 Scale, Scope and Location
 Programme Solution
 Service Delivery
 Programme Implementation
 Programme Funding
Table xx: Assessment scores for programme dimension options. Keep this as brief as
possible. If this table gets unwieldy, summarise here and state The full analysis of options
against Assessment criteria is attached as Annex X.
Assessment scores for options within the

[Scale, Scope and Location] dimension
Assessment criteria
Status Quo ….. ….. ….. …..
Investment objectives:
list………………..
………………..
………………..
Critical Success Factors:
Strategic fit and business

needs
Potential value for money
Supplier capacity and
capability
Potential affordability
Potential achievability
Advantages and
Disadvantages:
Overall Assessment
The Recommended Preferred Way Forward

On the basis of the above initial assessment, the preferred way forward is:
 <option name and description
The table on the next page shows the analysis supporting this preference.

Note: this is a possible template: the values in the table below are illustrative only
Table xx: High-level cost benefit analysis
Rough Benefit Cost Analysis Notes Option 1: Option 2: Option 3: Do Option 4: Do
(summary) Do Nothing Do Minimum Intermediate Aspirational
Summary of Main (Primary) Benefits and Costs by Wellbeing Domain

Benefits
Health (Primary) Minimal Low/$65m Med/$191m High/$261m
Costs (and Disbenefits)
Civic Engagement and - $42m $78m $160m
Governance
Preferred Option No No Yes No
Benefit Cost Analysis (detail)
Main Benefits (Present Value or Assessment of Value by Domain Indicator)
Quality of life gains -$2m $10m $25m $50m
Fewer hospital visits -$5m $40m $115m $160m
Fewer GP visits -$3m $15m $51m $51m
Avoided lost work and Low Low Med High
productivity
Total Benefits Minimal Low/$65m Med/$191m High/$261m
Costs (Present Value)
One-Off Costs - $2m $5m $10m
Ongoing Operating Costs - $40m $73m $150m
Whole of Life Costs - $42m $78m $160m
Benefit/Cost Analysis
Appraisal period (years) 20 20 20 20
Net Present Value (Monetised) -$7m $13m $113m $101m
Assessment (Non-Monetised) None Low Med High
Rank 4 3 1 2
KEY:
Good fit
Partial fit
Poor fit

Assumptions
The assumptions and tools used to justify each of the line items above are summarised
below:
 List here the key assumptions (note financial assumptions are in Indicative costs and
benefits, below)
The mix of projects <go to guidance>

The proposed tranches and projects for the programme were identified by stakeholders at a
facilitated options workshop held on [dd mmm yyyy]. These were then organised into a
preliminary roadmap and schedule for the programme.
They are:
Indicative costs and benefits

The proposed whole of life cost of the programme is … over the … years of the expected
lifetime of the programme.
Describe the approach used to develop the rough order cost benefit analysis should be
described together with key financial assumptions. Consider the Treasury’s wellbeing
approach to cost benefit analysis: treasury.govt.nz/information-and-services/nz-
economy/living-standards/our-living-standards-framework/wellbeing-approach-cost-benefit-
analysis
The [Chief Executive(s)/Commissioner(s)/Senior Responsible Owner] has/have signified

his/her/their agreement to the indicative cost and benefit estimates of the proposal.

Commercial Case <go to guidance>

Outlining the Commercial Case
The commercial case outlines the proposed procurement arrangements for the preferred
option.
Procurement Strategy
Outline the organisation’s procurement strategy and either provide a reference or attach it as
an Annex.
On the basis of the relative value of the procurement and the potential risk to the
organisation, the preferred approach to the supplier market is …
The initial assessment of the attractiveness of the proposed procurement to the supplier
market is…
Subject to approval, the organisation proposes to approach the market with a(n) Expression
of Interest (EOI)/Request for Information (RFI)/Other, based on the preferred way forward
above.
Required services
The required goods and/or services in relation to the preferred way forward are:
List here the key procurements that are likely to be required as part of the programme; the
detailed consideration of the commercial case takes place at the Detailed Business Case
stage for the individual major projects within the programme.
The specific goods and services required in each tranche will be defined in the respective
project or tranche business cased
Contract provisions
The contract procurements and key procurement milestones will be determined for each
procurement required. The overarching programme approach is:
 Contract lengths:
…
 Key contractual clauses
…
The indicative procurement timeline is aligned with the preferred programme approach as
described above. The key procurement milestones include:
 list
Potential for risk sharing <go to guidance>

For an Infrastructure programme only: Outline any thinking to date on how the
programme’s service risks in the design, build, funding and operational phases or delivery
could be shared between the public and private sectors.

Detail for this is not required until the Single-Stage or Detailed Business Case – but it is
useful to start to think about where the risks might be shared. Seek guidance from the
New Zealand Infrastructure Commission2.
Outline potential payment mechanisms <go to guidance>

Text
Ascertain contractual issues and accountancy treatment <go to guidance>

Text
Accountancy treatment
Text
2
https://treasury.govt.nz/information-and-services/nz-economy/infrastructure/nz-infrastructure-commission

Financial Case <go to guidance>

Outlining the Financial Case
This part of the business case provides assurance that the short-listed options, with
particular focus on the preferred way forward, are affordable, taking into account all potential
funding sources. If the programme will need Crown funding, ensure that you have discussed
the programme with relevant ministers and have their support and endorsement before
asking them to present the PBC to Cabinet for approval in principle to the preferred way
forward and agreement to proceed to further business cases.
Note that detailed analysis of the financial case takes place at the Single Stage or Detailed
Business Case stage for each project or tranche in the programme.
The purpose of this section is to set out the Programme financial implications of the preferred
way forward.
Impact on the financial statements

The financial costing needs to be updated throughout the programme as the impacts on the
financial statements of the organisation are known with greater accuracy. To allow for
uncertainty in the initial estimates, optimism bias should be included, and range-based
estimates are preferred. Consider Quantitative Risk Analysis (QRA) to assist in determining
the uncertainty in the estimates at this stage; for a High Risk programme this is mandatory.
Based on current estimates, the anticipated cash flows for the investment proposal over its
intended life span are set out in the table below.
Table xx: Anticipated cash flows
$millions 2020/21 2021/22 2022/23 2023/24 …….. Total

Preferred Way Forward:
Capital
Operating
Total
Funded by:
Existing
Revenue
Existing
Capital
Extra Revenue
Extra Capital
Total
The following assumptions have been made in determining these initial estimates:(or include
as an Annex and reference here if there are a significant number of financial assumptions).
 List

Funding sources
It is proposed that the additional funding required ........ is sought/provided from the following
sources: ...........

Overall affordability
The proposed whole of life cost of the programme is $xxxm over the X years of the expected
lifetime of the programme.
The [Commissioner(s)/Chief Executive(s)/Senior Responsible Owner (SRO)] has/have
signified his/her/their agreement to the required level of funding required… The
Commissioner’s/Chief Executive(‘s/s’)/SRO’s letter is attached.

Management Case <go to guidance>

Outlining the Management Case
Summarise the key programme management arrangements and key milestones. Identify the
overall methodology and the approach that will be taken to manage the programme on an
on-going basis. The management approach for individual projects (eg DevOps, Agile,
hybrid) should be described in the project/tranche business cases.
The purpose of the management case is to describe the arrangements that will be put in
place for the successful delivery of the programme and its constituent projects, both to
ensure successful delivery and to manage programme risks.
Programme management strategy and framework

If the organisation already uses a programme management methodology, name or briefly
describe it here. If it does not, describe plans to implement a methodology.
Governance arrangements
Outline governance arrangements (this may need an organisational chart):
Programme Board membership
Senior Responsible Owner
Project Executive for [project]
Representatives of corporate functions:
Programme structure
Include the programme organisational chart
Programme reporting arrangements

Outline reporting lines and planned reporting (internal and external)
Key roles and responsibilities
A summary of key programme roles and description of responsibilities is attached as Annex

X.
Outline programme plan

Summarise the key programme dates in the table below and attach the most up-to-date
version of the programme plan (Gantt chart) as an Annex .
Table xx: Key programme milestones
Proposed key milestones Estimated timing

The most recent programme plan (dd Mmm yyyy) is attached as Annex X.
Organisational change management

Summarise the key anticipated business/organisation changes and describe the planned
change management strategy.
…
Benefits realisation management

Briefly describe the benefits realisation strategy. List key benefits and benefits owners (by
role/title). All primary benefits identified in the primary Benefits section of the Programme
Business Case must be accounted for in the register. Those that were referred to as
secondary can be measured and monitored by the relevant business area if some advantage
in doing so exists, but they do not need to be itemised in the Benefits Realisation Plan, and
certainly not at this Programme Business Case stage.
The planned approach to benefits realisation is describe:
A benefits register and initial outline Benefits Realisation Plan have been created to support
the development of this business case. XX role/xx group will be responsible for monitoring
and reporting on programme benefits realisation.
Risk management
The Senior Responsible Owner is responsible for ensuring that arrangements for the
management of risk are in place, together with the appointment of a risk manager at the
appropriate time. The risks must be regularly and frequently reviewed and the register
updated throughout the course of the programme.
A Risk Management Strategy & Framework and a Risk Register have been developed and
will be progressively updated as more detailed analysis is undertaken.
Note that this may be a reference to the use of existing organisational programme
management frameworks and standards.
Programme and business assurance arrangements

This investment proposal has been assessed as [low/ medium/ high] risk using the
Treasury’s Risk Profile Assessment3 tool and moderation process.
On the basis of this risk assessment, the basis for on-going engagement as part of the
business case process has been agreed and documented in the Point of Entry/Scoping
Document dated [dd mmm yyyy].
Delete if not applicable. The proposal is subject to on-going Gateway reviews. A Gate 0:
Strategic Assessment review has been carried out on this programme. This business case
reflects the review team’s advice and feedback
Delete if not applicable. This proposal is also subject to independent quality assurance. [XYZ
limited] has been appointed to ……. This business case reflects their advice and feedback.
3
https://treasury.govt.nz/information-and-services/state-sector-leadership/investment-management/think-
investment-possibilities/risk-profile-assessment

Annexes
Attach as annexes additional supporting detail where noted in the Programme Business
Case document (examples below – these may not all be required, and other documents may
be more appropriate). Where the annex is an extract (eg risk register) or summary (eg plan),
note that the full version is available on request.
 Commissioner’s letter
 Supporting strategy and planning documents
 Summary of stakeholder communication and engagement plans
 Investment Logic Mapping deliverables, eg Investment Logic Map
 High-level requirements analysis describing what the investment is to deliver (where
applicable)
 Detailed options analysis
 Programme blueprint and projects dossier
 Summary Programme plan (Gantt chart) (1page)
 Organisational Change management strategy
 Benefits strategic alignment showing alignment to strategy
 Draft outline/high-level Benefits (and Disbenefits) profiles
 Economic and Financial analysis
 Summary of risk register

Annex 1: Commissioner(’s/s’) Letter

This template is the basis for developing the letter for a Government department;
customise ,and individualise it as needed to meet requirements or to address proposal-
specific issues.
[date]
[To whom it may concern]

Programme Business Case
<Agency name(s)> is/are proposing a major strategic initiative to meet future …………
……………. requirements for….
This Programme Business Case is a significant deliverable for this initiative. It investigates to
investigate value for money options to deliver this initiative and proposes a plan for its
delivery.
I/We confirm that:
i I/We have been actively involved in the development of the attached investment
proposal through its various stages
ii I/We accept the strategic aims and investment objectives of the investment proposal,
its functional content, size and services
iii the indicative cost estimates of the proposal are sound and based on best available
information, and
iv suitable contingency arrangements are in place to address any current or unforeseen
affordability pressures.
This letter fulfils the requirements of the current Better Business Cases guidance. Should
either these requirements or the key assumptions on which this case is based change
significantly, revalidation of this letter of support will be sought.
Yours sincerely
<signature(s)>
Title(s)

Annex 2:
Table xx: Primary benefits
Indicator & description Measure(s) and evidence Monetisable or

By domain: Direct or
base (datasource) Who Benefits? non-monetisable?
Benefit/disbenefit name & description Indirect?
(quantifiable)
The benefits above will be used to undertake the options analysis in the Economic Case. Other expected secondary benefits are shown below.
Table xx: Secondary benefits and disbenefits
By domain: Description & possible measure(s)
Quantitative or Direct or
Secondary Benefit and Who Benefits?
Qualitative? Indirect?
disbenefit name

Annex 3…

Annex X:
End of Programme Business Case template.

On completion of the Programme Business Case document, delete everything after
this point.

GUIDANCE – DELETE ON COMPLETION OF PBC
Better Business CasesTM – Programme Business Case –

Guidance
This guidance is to assist developers and reviewers to build better business cases using the
Five Case Model, the New Zealand Government’s accepted good practice standard.
This guidance document is intended for investors, senior responsible owners, workshop
facilitators and business case developers preparing the Programme Business Case. It is part
of a comprehensive and structured toolkit of guides and templates to assist you at every
stage of the business case development. This guidance can assist you whether you are
considering an investment in change at the portfolio, programme or project level in either the
public or private sectors.
This guidance also provides a useful reference for business managers, project or programme
managers, business case developers, and other stakeholders who can either influence
investment decisions or have an interest in the successful delivery of change.
This document is part of the Better Business Cases suite of guidance available at the
Treasury website: http://www.treasury.govt.nz/statesector/investmentmanagement/plan/bbc
The guidance outlined in this document applies until this document is updated or replaced.
What this document is not

This document does not comprehensively cover all the related aspects of business case
development, although it describes where other relevant guidance fits. These may include
regulatory impact, economic assessment, procurement, risk management, Public Private
Partnership (PPP), Treaty, programme/project management or assurance processes. You
should refer to any relevant policies, rules, expectations and practices that apply to your
specific organisation or sector.
Key Changes from the previous version

The key changes to this guidance from the version dated 30 October 2018 are:
 Integration of template and guidance to avoid business case developers needing to
seek assistance in two places.
 Expansion of references to Wellbeing indicators, measures and data sources at
relevant points in the guidance
 Updated guidance on Public Private Partnerships; replaced with references and links to
Cabinet requirements for consideration of alternative procurement, to procurement
rules and the New Zealand Infrastructure Commission (both launching 1 October 2019)
 More detailed guidance on expectations around the Commercial, Financial and
Management cases at this indicative stage, including adding guidance to support the
template where this was missing.
 Better integration with Benefits management requirements
 Insertion of missing links, update of links, correction of typographical errors.
Questions and feedback

General enquiries about the information contained in this guidance, and comments on how it
could be improved: better.businesscases@treasury.govt.nz.
November 2019 Better Business Cases: Guide to Developing the Programme Business Case | 33
For state sector agencies, any agency-specific questions should be addressed to your
Treasury Vote team or departmental Monitoring Agency.
Programme Business Case: actions

A Programme Business Case includes the steps and actions shown below. See Annex 3 for
an overview of all of the 34 BBC actions.
These Actions develop the Programme Business Case, which provides a tool for transparent
and evidence-based decision-making and a framework for the coordination, delivery,
monitoring and evaluation of the programme’s resultant outputs, outcomes and benefits.
Purpose of the Programme Business Case

The purpose of this programme business case is to:
 confirm the strategic context and fit of the proposed investment
 confirm the case for change and the need for investment
 recommend a preferred programme and a preferred way forward for further
 identify the projects that will support the delivery of the programme, including proposed
tranches
 seek the early approval of decision-makers to develop subsequent business cases:
o For a tranche: single-stage business case - and/or -
o For any high-risk high-value projects in the programme: indicative business case
(and then detailed business case).
34 | Better Business Cases: Guide to Developing the Programme Business Case November 2019
Structure of this guidance

This guidance is structured around the cases and actions. The purpose of each action is
described together with what is expected and the suggested evidence that should be
provided. It also contains tips and examples to assist business case developers.
A typical process for developing the Programme Business Case could be as follows:
Note that the process and level of effort will vary depending on the nature of the organisation, the decision being
sought and the expectations agreed in the Point of Entry document meeting.
1. Ensure the mandate and brief for the programme have been completed
2. Complete the Treasury Risk Profile Assessment (RPA)4 and send to Treasury.
3. Draft the Point of Entry/Scoping document(PoE) 5 and arrange a meeting with the business case reviewer
to agree the process, the level of effort and any additional assurance requirements for the completion of
the Strategic Assessment (if required) and Programme Business Case (including Gateway Review,
Regulatory Impact Analysis and Independent Quality Assurance).
4. If a Programme Strategic Assessment has already been done:
o Include in the Programme Business Case a summary update on the strategic case elements already
completed, and complete the remaining actions not undertaken in the Programme Strategic Assessment.
o If significant time has elapsed or any material changes have been identified since the completion of the
Programme Strategic Assessment, update the RPA and undertake a further PoE for the development of
the Programme Business Case
o Update the stakeholder management plan. This will inform the choice of attendees for stakeholder
workshops.
5. If a Programme Strategic Assessment has not yet been completed:
o Arrange and conduct a case for change workshop with key stakeholders to agree investment objectives
and scope. Additional workshops may be required to identify and analyse benefits, risks, service
requirements, constraints and dependencies.
o Note that Investment Logic Mapping (ILM) workshops with a facilitator accredited by the Department of
Treasury and Finance, Victoria, Australia, are mandatory for high-risk programmes and projects. 6 The first
two workshops are required (Problem Definition workshop and Benefit Definition workshop).
6. Finalise the Strategic Case
7. Arrange and conduct the workshops needed to identify a wide range of options and to assess these to
determine the preferred way forward; draft the Economic Case after the workshop(s).
8. Share the early draft of the Programme Business Case with senior management and key stakeholders to
obtain feedback and agreement to the proposed way forward; run this as a workshop.
9. Revisit and complete the Economic Case section following the workshop
10. Consult with the agency’s/agencies’ Commercial, Financial and (e)PMO teams; collect information for the
Commercial, Financial and Management cases and draft these cases.
11. Draft the Commercial, Financial and Management Cases
12. Present the final draft Programme Business Case (and any supporting documentation required) for review,
including to central agency reviewers and to a Gateway review panel if required. Incorporate feedback.
4
https://treasury.govt.nz/information-and-services/state-sector-leadership/investment-management/think-
investment-possibilities/risk-profile-assessment
5
www.treasury.govt.nz/publications/guide/better-business-cases-significant-investment-proposal-point-entry
6
13. Finalise the Programme Business Case, seek final sign-off from the Senior Responsible Owner and any
other required internal sign-off, and submit for approval to proceed with the programme.
14. The Programme Business Case should be revisited at the start of each project/tranche business case.
Each project/tranche business case should provide an update on any material changes to the programme
drivers, benefits, approach, timeline or costs since the completion of the previous business case.
15. Use the Programme Business Case to support post evaluation and benefit realisation
16. Feed findings back into the strategic planning process for the future development of the strategy and
strategic portfolio.
Suggested methods and tools

A variety of methods and tools can be used in the development of the business case. When
considering the approach to be used, developers should consider which they will use.
Reviewers will consider whether the methods (and tools) are suitable, proven, and inclusive,
and capability should exist to apply it.
Methods and tools identified in this guidance, and others that can be used in this and other
stages of the business case: https://treasury.govt.nz/information-and-services/state-sector-
leadership/investment-management/better-business-cases-bbc/bbc-methods-and-tools
We strongly recommend facilitated workshop(s) to identify and agree the investment
objectives and business need with key stakeholders.
 Note that Investment Logic Mapping (ILM) workshops with a facilitator accredited by
the Department of Treasury and Finance, Victoria, Australia are mandatory for high-risk
programmes and projects.
<back to template>
The Strategic Case – Making the Case for Change

Step 2: Making the case for change
Making the case for change requires the following actions:
Step 2 Making the case for change
Action 2 Revisit the strategic context (revisit Strategic Assessment)
Action 3 Determine investment objectives, existing arrangements and business needs
Action 4 Determine the potential business scope
Action 5 Determine benefits, risks, constraints and dependencies
Purpose of the Strategic Case

The Strategic Case confirms the strategic context developed in the previous Strategic
Assessment and makes a compelling case for change. This case:
 confirms the strategic alignment for the proposed programme
 confirms the investment objectives, existing arrangements and business needs
 considers the potential business scope and key service requirements
 confirms the potential benefits and identifies the risks, constraints, dependencies, and
assumptions.
Source this information from the previous Strategic Assessment and update for any
contextual changes.
Action 2: Revisit the Strategic Context

Revisit the Strategic Assessment and update for any changes to the strategic context.
There should be clear linkages and references to the organisation’s strategic planning and
portfolio management process; Annual Plan, Statement of Intent, Long Term Investment
Plan, Asset Management Plan(s), Information Systems Strategic Plan, or other planning
documents, eg Living Standards Framework, MoE’s Strategy and Operating model, strategic
Defence policy statement.
Don’t repeat the detailed content of existing business planning documents - provide a brief
summary and references.
Purpose
The purpose of this action is to demonstrate alignment of the proposed investment with wider
national or sectoral priorities and goals, policy decisions, other multi-agency programmes (if
relevant) and with the sponsoring organisation(s) strategic intentions.
What’s expected?
This action builds on the initial analysis undertaken in Action 1 as part of the Strategic
Assessment. This action includes:
 An organisational overview
 Alignment to strategic intentions
Organisational overview
The scope of the organisational focus will determine the scope of the investment proposal.
For the purposes of BBC, ‘an organisation’ can be a single agency or can include multiple
agencies, business units or groups of people structured and managed to meet a need or to
achieve common goals.
Provide a brief snapshot of the organisation, of what it is seeking to achieve, current
activities, available resources and the environment in which it operates.
The key areas of focus are:
 the main outcomes, impacts and objectives that the organisation is trying to achieve
 the nature and scope of the organisation’s activities and services (outputs), key
stakeholders and customers
 the current environment and context, including how the organisation intends to respond
to changes and possible risks. Consider:
o Strengths, Weaknesses, Opportunities and Threats analysis (SWOT)
o external drivers for the investment proposal – these can be political, economic,
social/ demographic, technological, legislative, environmental, and/or commercial
(PESTLE).7
Alignment to strategic intentions

The proposed investment should contribute to, and be consistent with, existing strategic
business planning. Demonstrate how the proposal aligns to relevant national, regional, sector
and organisational strategies, including:
 government priorities and policy decisions;
 organisational, sectoral, and regional strategies
 organisational, sectoral, and regional priorities and goals
 other projects or programmes planned or underway, and this programme’s place within
the organisational portfolio.
Where an investment proposal is intended to contribute to shared outcomes across multiple
organisations, or where expected outcomes contribute to other related projects or
programmes, these linkages and inter-dependencies should be clearly demonstrated.
Note that all new spending initiatives to be submitted for Budget Bid must demonstrate
alignment with the Government’s overall priorities, present a strong intervention logic and
evidence, show cost and impact understanding and provide a strong narrative on how the
assumed outcomes of the initiative will impact on wellbeing, for example through use of
the Living Standards Framework8. Wherever possible, the initiatives should also
demonstrate cross-agency and cross-portfolio collaboration.
7
PESTLE(C) and SWOT analysis tools: https://treasury.govt.nz/information-and-services/state-sector-
8
www.treasury.govt.nz/information-and-services/nz-economy/living-standards/our-living-standards-framework
Required evidence
There should be clear linkages and references to the Think Phase of the Investment
Lifecycle, through the organisation’s strategic planning and portfolio management process,
showing how this programme contributes to these strategies.
Identify the linkages to organisational strategic planning documents and other project
documents, for example:
 white papers and overall business strategy
 service models, e.g. models of care in the health sector, service plans
 investment plans, e.g. Long-Term Investment Plan (LTIP), Asset Management Plan(s),
Information Systems Strategic Plan (ISSP)
 corporate strategies, e.g. cybersecurity strategy
 detailed asset planning information, e.g. asset condition assessments, geotechnical
assessments, Master Site Plans
 documents prepared elsewhere in the project, e.g. business needs analysis, high-level
user requirements, results of Discovery/Feasibility exercises.
Do not repeat the detailed content of existing business planning documents - provide a brief
summary and references, rather than repeating the content.
Development of these business planning documents is not part of the business case
process; they provide necessary context and overarching strategy. Information from them is
required as input for analysis. If these documents do not exist, the SRO and the organisation
executive should consider whether the organisation is ready to proceed to business case, or
should initiate work outside the programme to address strategic planning gaps.
<back to template>
Action 3: Investment Objectives, Existing Arrangements &

Business Needs
Purpose
The purpose of this action is to:
 set out the investment objectives of the proposal ie, what the organisation is seeking to
achieve with the proposed investment
 document existing arrangements ie, what is currently happening
 specify business needs ie, problems or issues in addressing the gap between the current
state and the desired future state.
Setting investment objectives

Setting good investment objectives is a critical part of a business case and informs the later
assessment of potential options in the economic case. We recommend a facilitated ‘case for
change’ workshop process to develop and agree the investment objectives, to ensure that
key stakeholders are engaged early and have an opportunity challenge and shape the
direction of the investment proposal.
 Note that Investment Logic Mapping (ILM) workshops with a facilitator accredited 9by
the Department of Treasury and Finance, Victoria, Australia, are mandatory for high-
risk programmes and projects.
There is no restriction on the number of investment objectives, but five or fewer helps to
make the analysis manageable and focussed (ie on the vital few); some proposals may
require either fewer or more. A large number of investment objectives, or single objective
statements that encompass multiple outcomes, can undermine the clarity and focus of the
proposal.
The objectives should be SMART (specific, measurable, achievable, relevant, and time-
bound) to inform the assessment of potential options in Action 7 and to provide the basis for
determining the investment’s success.
Defining good investment objectives
Good investment objectives should be:
 Customer-focused and distinguishable from the means of provision
 Focus on what needs to be achieved rather than the potential solution
 Not so narrowly defined that they preclude important options, and
 Not so broadly defined that they cause unnecessary work at the options analysis stage.
In practice, well-defined investment objectives typically address one or more of the following
five generic investment rationales:
 To improve effectiveness. For example, by improving the quality of services, improving
access or better targeting these services to meet demand.
 To improve efficiency. For example, by improving the relationship between the quantity
of inputs employed and the quantity, quality and timeliness of services delivered.
 To reduce costs. For example, by reducing the underlying costs of the inputs employed
to deliver existing services.
 To meet statutory, regulatory or organisational requirements. This can include
complying with new or changing legislative requirements (or organisational policies)
 To re-procure services or avert service failure. For example, at the end of an existing
contract or where an enabling asset is no longer fit for purpose.
Document existing arrangements

For each investment objective:
 provide a snapshot of the current state, using a wellbeing approach where appropriate.
This analysis is intended to highlight any problems, difficulties and opportunities
associated with the current situation, to highlight the need for change. Where an ILM
has been undertaken, the current state should refer back to the relevant problem
statement(s) from the ILM workshops.
 provide a detailed account of the gap between the existing arrangements and the
desired future state(s). This should describe the problems, difficulties and service gaps
associated with the existing arrangements that the proposed investment is intended to
address. A continuum of future states may be possible depending on the scope of the
investment.
 Where appropriate, use a wellbeing approach to help evidence the performance of the
existing arrangements. Refer to the benefits table in Action 5 below for the identification
of the main benefits.
9
Example: where an existing service is being replaced, this could include current costs and
measures of the existing services. Wherever possible, include metrics to provide a base to
help measure the distance of travel from the status quo.
Depending on the type of investment proposal, this analysis could include describing the
existing arrangements and explain how services are currently organised, provided and
supplied. Include any relevant contextual details about stakeholders, competitors, suppliers,
customers, service performance, and asset availability, utilisation and condition. An
evidential base should be provided to support the problems and opportunities that are
described.
This description also forms the basis for specifying the ‘Do nothing’ or ‘Status quo’ option in
Action 7; this is the baseline for measuring successful change.
Specify business needs

The business needs (or changes) that are required from the current arrangements to deliver
the investment objectives. In most cases, it will be necessary to consider:
 confirmation of the continued need for existing business operations, including
supporting evidence
 projections of the nature and level of demand for future services (including customer
demographics and alternative sources of supply)
 deficiencies in current provision, and
 a summary of requirements, distinguishing clearly between the current and the future
states.
Suggested evidence
Demonstration that analysis of the current state, investment objectives and underpinning
business needs are defined clearly and supported by key stakeholders and customers (eg
results of workshops).
Where appropriate, a wellbeing approach should be used to help evidence the performance
of the existing arrangements. Refer to the benefits table below for the identification of the
main benefits.
<back to template>
Action 4: Determine the Potential Business Scope

Purpose
The potential business scope defines the boundaries (or limitations) and the key
requirements to satisfy the identified business needs specified in Action 3. Only options
within this scope are assessed in Action 7 in the Economic Case.
Clearly specifying the business scope ensures that the proposal focuses on those key
service requirements that meet the investment objectives and are likely to improve value for
money. These scope boundaries should be concise enough to avoid later scope creep, but
broad enough to encourage consideration of innovative options or solutions.
Identify key requirements

Identify the key requirements with reference to the proposed scope and business changes
identified in Action 3. Describe the scope of the proposal from the perspective of affected
areas and functionality. The scope describes the degree or scale of change required for the
investment proposal to be considered successful. These can vary from the core or minimum
scope, through to the most aspirational:
 The minimum scope required to deliver the essential or core service requirements (the
must haves)
 The intermediate scope required to deliver essential and desirable service
requirements, and
 The maximum scope required to deliver the essential, desirable and aspirational
service requirements.
Desirable requirements may typically be considered if they represent good marginal
value for money. The aspirational requirements (or “nice to haves”) are generally only
considered further if they are affordable.
Suggested evidence
Evidence should include clear statements of business outcomes and service outputs
together with demonstration that key stakeholders understand and agree scope. What is out
of scope should also be clear, understood and documented.
Methods and tools to gather the evidence for Action 3 and Action 4
There are a variety of methods and tools that are available to help the strategic case or
specific actions within the strategic case. https://treasury.govt.nz/information-and-
services/state-sector-leadership/investment-management/better-business-cases-bbc/bbc-
methods-and-tools
<back to template>
Action 5: Determine benefits, risks, constraints, dependencies and

assumptions
Purpose
The purpose of this action is to identify the potential main, high-level benefits, risks,
constraints, dependencies and assumptions associated with the investment proposal.
Identify potential benefits

A benefit is a positive consequence from change. Benefits can also be considered as the
return from the investment in undertaking a project or programme.
Treasury provides guidance on Benefits identification, analysis, planning, and realisation and
reporting that will be useful in the analysis required for this section of the PBC:
 www.treasury.govt.nz/information-and-services/state-sector-leadership/investment-
management/plan-investment-choices/benefits-guidance
The approach to benefits identification and measurement should be prudent, proportionate
and appropriate. Focus on the 20% of benefits that are likely to provide 80% of the
programme’s benefit value. This section builds upon the initial analysis in the Programme
Strategic Assessment. The benefits described in this section need to be comprehensive (to
avoid significant under-statement of the impacts) and mutually exclusive (to avoid double-
counting impacts).
All significant benefits should be identified from the perspective of the benefits to New
Zealand (ie wellbeing) unless otherwise agreed with the reviewer. This recognises the wider
perspectives of public value decision-makers when making resource allocation choices.
Sources of wellbeing indicators, measures and data
To demonstrate wellbeing benefits, Treasury has provided access to Wellbeing indicators,
measures and data sources to baseline the current state, and to describe investment
objectives and benefits:
 www.treasury.govt.nz/information-and-services/nz-economy/living-standards/our-living-
standards-framework/measuring-wellbeing-lsf-dashboard
Another potential (but not exhaustive) resource is Indicators Aotearoa New Zealand (IANZ):
 www.stats.govt.nz/indicators-and-snapshots/indicators-aotearoa-new-zealand-nga-
tutohu-aotearoa
Case study/worked example
The Treasury also has a set of indicators, measures and data sources (the 'Horowhenua
District indicators'), drawn from IANZ and used by a district council for strategic planning.
Horowhenua District Council led a successful community conversation exercise involving iwi,
communities, elected members and community networks in 2018 to identify what residents
and ratepayers loved the most about their communities and those attributes that would
define neighbourhoods of the future. With participation in this conversation reaching over
10% of the population, Horowhenua District Council selected indicators that were the most
meaningful to measure the wellbeing aspiration in the district. Horowhenua District Council is
working with community leaders to develop a baseline and further refine the indicators.
On request, Treasury’s Investment Management & Asset Performance team can provide the
'Horowhenua District Council’ example (of domains, measures, indicators and data sources)
to agencies with projects in the Government Investment Portfolio.
The Treasury is not particularly endorsing these indicators as having more significance than
others – they are simply presented as a 'worked example'. The main value is in
understanding the process of how they were identified. There’s also value in being able to
see the associated measures and data sources, for agencies to get a sense of how they
might achieve this for the indicators they end up choosing for their own Wellbeing narrative.
There is a lot of overlap between the indicators used in IANZ and The Treasury’s LSF
Dashboard, and the two products are closely related. Agencies can use indicators from both
products to help build their Wellbeing narrative. However, these are both a high-level view of
wellbeing. Where appropriate, agencies should also consider whether other more granular or
relevant indicators may be needed to best describe impacts (benefits/disbenefits) at a
business case (micro-economic) level.
The Living Standards Framework Domain icons
Health (primary)
Jobs and earnings
Cultural Identity
Civic engagement
and governance
Environment
Housing
Income
Jobs
Knowledge & skills
Safety & Security
Social connections
Subjective
wellbeing
Time use
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Classify the anticipated benefits

In an annex to the programme business case, provide more detail; an analysis of the main
potential benefits of the programme (there’s an example table in the template):
 By Benefit type: benefits should be classified as:
 Monetisable or non-monetisable:
Benefits may be measurable in either monetary terms (financial or cash-
releasing, such as avoided costs or efficiency savings) or non-monetary terms
(either quantifiable, such as reduced customer complaints, or qualitative, such as
improved health outcomes)
 Direct or indirect:
Benefits may either have a direct or indirect impact on stakeholders and can
result in both winners and losers. The impacts will likely vary depending on the
scope of the proposal (minimum, intermediate and maximum).The description
should identify those stakeholder groups who potentially gain or lose from the
proposal, both those affected directly by the investment and those affected
indirectly elsewhere in the wider economy. This recognises that sometimes those
investing the most in terms of resources might not always be the main
beneficiaries.
 Quantitative or qualitative:
Qualitative benefits may be observable but not easily measured.
 By beneficiary group – who benefits?
 Including information on the evidence base (datasource) and potential measures.
Refer to Treasury benefit—cost analysis guidance:

http://www.treasury.govt.nz/publications/guidance/planning/costbenefitanalysis/guide
Disbenefits have negative impacts on stakeholders also need to be identified and analysed
here. Provide a similar analysis table.
Where benefits may are contingent on other events, they should be classified with risks.
Identify the main risks to objectives

In this context, a risk is the chance of something happening that will have a negative impact
on the achievement of the investment objectives and/or delivery of benefits.
In a table, list the (up to) half-dozen main risks associated with the proposal and their
potential impact. The emphasis should be on the 20% of risks which are likely to account for
80% of the total risk. Revisit and update any risks first identified as part of the Strategic
Assessment.
State the risk and the proposed key mitigations. Reference the risk register and include a
subset of this as an annex to the business case; include there more detailed analysis - detail
the risk rating, sources of potential risk, the likely impact and relevant factors including
possible changes in circumstances, causes and potential consequences, and who will
manage the risk during the programme. This analysis is best done as a risk workshop with
key stakeholders.
This analysis will be revisited and updated in further business cases (eg Detailed Business
Case) and be based on the preferred option.
Uncertainty of costs and risks – optimism bias

The most familiar form of risk to investment objectives in business cases is that the estimated future
costs arising from the given proposal are overly conservative, the benefits are overly optimistic, risks
are understated, or all three. This means that the business case analysis may not fully reflect the
complexity of the proposal or some cost or benefit information may be unavailable.
Additionally, there is a demonstrated, systematic, tendency for individuals to exhibit ‘optimism bias’
when preparing spending proposals. The effects of optimism bias can be mitigated by making explicit
adjustments to key assumptions and variables, for example by increasing proposal estimates,
reducing projected benefits, or by assuming benefits are delayed.
The amount of optimism bias typically depends on the nature of the investment proposal and the
accuracy of the estimates for proposal costs and benefits. As the business case development
proceeds and estimates are refined, the level of optimism bias can be expected to reduce and
incorporated as a contingency in the contracted project. This means that the business case analysis
may not fully reflect the possibility of cost-overruns, changing business drivers or implementation
timing delays. Tools such as Quantitative Risk Assessment (QRA - see link below) are useful to
identify and counter optimism bias.
Guidance:
 BBC – techniques to quantify risk and uncertainty
 UK government Green Book: supplementary guidance on Optimism Bias
<back to template>
Identify constraints
Constraints are limiting parameters within which the investment must be delivered. These
can include relevant Government policy decisions, initiatives or rules, or constraints on
available resources (eg availability of internal subject matter experts (SMEs), market
limitations). Affordability constraints can include funding envelopes or limits on the amount of
either operating or capital expenditure that can be incurred.
Constraints on the programme need to be described, considered and managed from the
outset, since they will limit the range and scale of investment options that can be considered
for further assessment.
Identify dependencies on other initiatives

Specify any dependencies outside the scope of the programme upon which the success of
the programme is dependent. These should include:
 Interdependencies with other programmes and projects external to the programme but
within the organisation’s portfolio, programme and project environment.
 External dependencies outside the programme environment, such as in business
operations, partnering organisations, or external dynamics such as legislation, strategic
decisions and approvals.
Identify the key planning assumptions

Assumptions are things that are accepted as true or as certain to happen, without proof (if
they are not certain to happen, they may be a risk).
Programme assumptions need to be identified and managed from the outset. If any
assumption proves to be incorrect, at any stage during the programme duration, this may
impact on the validity of the programme or its expected benefits. Any material change in
assumption(s) should trigger a review of the advisability of proceeding with the programme.
Note that the assumptions in this section are broader than the financial assumptions that are
considered in the Financial case.
Required evidence
Demonstration that the benefits, risks, constraints, dependencies and assumptions are
clearly defined and are understood and agreed by the key stakeholders.
Benefits thinking may be preliminary but should be documented in a format that can be
expanded over time.
Methods and tools to gather the evidence

We recommend one or more facilitated workshops to identify and agree the benefits, risks
constraints, dependencies and assumptions with key stakeholders.
Treasury provides guidance on Benefits identification, analysis, planning, and realisation and
reporting that will be useful in the analysis required for this section of the PBC:
www.treasury.govt.nz/information-and-services/state-sector-leadership/investment-
<back to template>
Economic Case – Exploring the Preferred Way Forward

Step 3: Exploring the preferred way forward
Completing the economic case requires the following actions:
Step 3 Exploring the preferred way forward
Action 6 Agree critical success factors (CSFs)
Action 7 Determine long-list and SWOT analysis
Action 8 Recommend a preferred way forward
Purpose of the Economic Case

The purpose of the economic case is to identify the options for the delivery of the programme
and to recommend the option that is most likely to offer best value for money, or social value,
to society, including wider social and environmental effects as well as economic value.
This is achieved in two steps:
1. Identify and assess a wide range of realistic and possible options (the ‘long-list’); the
‘preferred way forward’ from the programme emerges from the appraisal of the long-list
2. Identify and appraise a reduced number of possible options in further detail (the ‘short-
list’); the ‘preferred option’ for the programme from the appraisal of the short-list.
We recommend that one or more facilitated workshops with key stakeholders, users and
technical specialists be used to identify the critical success factors and to identify and assess
options to direct the preferred way forward.
Action 6: Agree Critical Success Factors

Critical success factors are attributes essential to successful delivery of the proposal; the
identified long-list options are appraised against the CSFs and the investment objectives in
Action 7. The CSFs must be critical, not desirable, and set at a level which does not bias or
exclude preclude important options at an early stage of the analysis.
The business case team should define an initial set of critical success factors for further
discussion and agreement with key stakeholders. The table in the template shows a starting
point for identifying and agreeing the CSFs, based on the five-case model. Consider how
these CSFs apply and can be tailored to the programme under consideration
Required evidence
The business case should describe the critical success factors and describe the approach
that was used to identify and agree them.
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Action 7: Programme Options Identification and Assessment

Purpose
The purpose of this action is to identify and assess a wide range of possible options for
achieving the programme’s business needs, potential scope and service requirements, and
to undertake an assessment of how well each option meets the investment objectives and
critical success factors agreed for the programme. This is the ‘long-list’.
This action produces:
 A description of each option, with a SWOT analysis, a conclusion in terms of how well it
meets the investment objectives and a recommendation: Carry forward, Discount,
Preferred way forward
 Format for the description is provided in the template.
Options are best generated at facilitated workshop with key stakeholders; senior managers
and stakeholders (business input) customers (user input) and specialists (technical input).
Workshop participants should systematically consider all the possible ways in which the
investment proposal could be delivered under each of five dimensions; we recommend using
the Options Framework: https://treasury.govt.nz/publications/guide/better-business-cases-
using-options-framework-options-analysis)
Researching the options

When identifying options for the programme consider:
 Consulting with senior business managers, stakeholders, users and industry or sector
specialists to gather the data and information relevant to the objectives and scope of the
problem.
 Analysing the data to understand significant dependencies, priorities, incentives and other
drivers.
 Identifying from the research, best practice solutions, including international examples, if
appropriate.
 The full range of policy instruments or projects that may be used to meet the objectives. This
may span different sorts or scales of intervention; regulatory (or deregulatory) solutions may be
compared with self-regulatory, spending or tax options.
 Feasibility studies.
 Radical options. These may not become part of the formal appraisal but can be helpful to test
the parameters of feasible solutions. Well-run brainstorming sessions can help generate these.
 Early engagement with the market to identify possible solutions and assess capability and
capacity.
Early engagement is encouraged because it helps inform an understanding of the potential options
and gauging market capacity and capability. It can also help stimulate innovation in the design and
delivery of the solutions. There is no limitation on when you can engage; but be very careful to avoid
setting market expectations, in case the programme does not proceed.
For state sector organisations, Government Procurement can provide guidance and support on how to
engage effectively with suppliers at early stage: www.business.govt.nz/procurement.
The New Zealand Infrastructure Commission also has guidance on early market engagement:
https://treasury.govt.nz/information-and-services/nz-economy/infrastructure/nz-infrastructure-
commission
Assess the programme options

Decision-making relies on robust analysis of the trade-offs between scarce resources and
the extent to which investment objectives and key service requirements of the investment
proposal can be achieved. Essentially this requires an initial assessment of the potential
advantages and disadvantages of each identified option. This can include an analysis of
relative benefits, costs and risks, where these assessments can be made by the
organisation.
Under each dimension of choice, assess each programme option as fully meeting, partially
meeting, or not meeting each investment objective and critical success factor. Any option
that fails to meet any of the critical success factors is automatically rejected and is not carried
forward to detailed analysis, except that the Do nothing/Status quo option must be carried
forward as a baseline, even where it fails to meet the CSFs.
For each programme option, consider and document:
 A brief, clear description or title for the option
 Main advantages, in terms of the choice dimensions
 Main disadvantages, in terms of the choice dimensions
 Impact on costs
 Impact on benefits
 Conclusion/recommendation.
Next, score the choices against the investment objectives and critical success factors, to
determine the preferred programme from the preferred choices under each of the five
dimensions.
The ‘Do nothing’ or ‘Status quo’ option
The long-list must include an option that provides the baseline for measuring improvement
and value for money added by other options. This is the Status quo, or ‘Do nothing’ option. In
some cases, maintaining the current level of services is not a viable option: for example, risk
of service delivery failure, or escalating maintenance costs.
The long-list must also include a realistic ‘Do minimum’ option based on the core functionality
and essential requirements for the programme. Where ‘Do nothing/Status quo’ is not a viable
option, ‘Do minimum’ should be carried forward
Using the Options Framework for analysis

<skip to end of Options Framework detailed guidance>
The Options Framework provides a structured approach to identifying and filtering a broad
range of options for delivering policies, strategies, programmes and projects.
Key dimensions Description
Scale, scope and location options The ‘what’ in terms of the potential coverage of the programme.
Potential scopes are driven by business needs, service requirements,
and the scale of organisational change needed to improve service
capabilities.
Examples include coverage in terms of: business functions, levels of
service, geography, population, user base, and other parts of the
business. A key consideration is what is in/out of scope and the
scope options (status quo, minimum scope, intermediate scope or
maximum scope).
Service solution options The ‘how’ in terms of delivering the ‘preferred’ scope for the
programme.
Potential service solutions are driven by available technologies,
recognised best practice and what the market can deliver.
How can services be provided? What alternative ways could the
services be delivered? What alternative processes (including
technology and business process engineering) could be utilised?
Service delivery options The ‘who’ in terms of delivering the ‘preferred’ scope and service
solution for the programme.
Who can deliver the services? Who are the alternative service
providers? In-house, outsource, alliance, strategic partnership??
Public or private provision? Or combinations of the above? Note:
o All state sector proposals requiring Cabinet approval that have
whole-of-life costs in excess of $25 million must consider non-
traditional procurement options for service delivery, including public
private partnership (PPP). For more detail see Annex 1 and contact
the New Zealand Infrastructure Commission for advice.
o State sector projects:

 if there are options with structural implications for government
(eg setup of a new Department/Departmental Agency) engage
early with the State Services Commission:
www.ssc.govt.nz/mog
 Government Procurement can provide guidance and support on

how to engage effectively with suppliers at early stage:
www.business.govt.nz/procurement
 Infrastructure programmes must engage early with the New

Zealand Infrastructure Commission – Te Waihanga:
https://treasury.govt.nz/information-and-services/nz-
economy/infrastructure/nz-infrastructure-commission
Key dimensions Description

Implementation options The ‘when’ in terms of delivering the ‘preferred’ scope and service
solution and service delivery arrangements for the programme.
Potential implementation options are driven by deadlines, milestones,
dependencies, economies of scale, delivery of benefits and risk
management.
The optimal option provides the critical path for delivery of the agreed
projects and activities, and the basis for the programme plan. Options
for implementation include piloting, modular or incremental delivery,
big bang, and phasing (tranches).
Funding options The funding required for delivering the ‘preferred’ scope and service
solution, service delivery and implementation path for the programme.
Potential funding options include public or private capital, the
generation of alternative revenue streams, operating and financial
leases, and mixed market arrangements.
Using the options framework to identify the long-list

1. Convene at least one workshop with key stakeholders; senior managers and
stakeholders (business input) customers (user input) and specialists (technical input),
with a trained and experienced facilitator.
2. Confirm the investment objectives and potential scope for the programme, as set out in
the strategic case
3. Agree the critical success factors for the programme.
4. Identify the potential ‘scopes’ for the programme, ranging from business-as-usual
(BAU) through to the ‘Do minimum’ and ‘Do maximum’ and intermediate options.
These options focus on the scale of potential change required. To avoid ‘scope
creep’ they must not exceed the potential scope for the programme as defined in the
strategic case; if they do, the ‘case for change’ needs to be revisited and updated.
The ‘Do minimum’ scope must be a realistic option that meets the ‘core’ scope and
essential business needs of the programme. The ‘Do maximum’ is predicated on
meeting the full scope of the programme and all needs. The intermediate options
should focus on key differences in relation to the desirable and optional scopes.
Be pragmatic: Scoping options rejected for delivery in the short-term may be retained in
the strategic portfolio for consideration in the longer-term.
i. Carry out a SWOT analysis for each option – note advantages and
disadvantages and how well it meets the agreed investment objectives and
CSFs.
ii. Discard options that are plainly unrealistic or uneconomic; for example, any that
do not fully meet all of the investment objectives and critical success factors
(document the reasons).
iii. Carry forward possible options, always including a ‘Do nothing’ and/or ‘Do
minimum’ scopes.
iv. Identify the preferred way forward (PWF) – the ‘scope’ that is considered most
likely to optimise value.
Scopes identified for a programme that are more ambitious than the ‘Do
minimum’ must be justified on their potential for optimising benefits in relation to
costs.
Consider numbering options and colour-coding the results. For example:
Case study: for a service improvement programme where the ‘scope’ for change has been defined
in terms of organisational coverage: the number of departments and functions that might be
affected by the change.
The workshop identified and appraised the options as follows:
Programme Do nothing Do Intermediate Intermediate Do maximum
minimum option option
1 Service 1.0 all 1.1 Dept A 1.2 Dept A 1.3 Dept A 1.4 All Dept
scope – as departments (Front FO plus FO plus A, B, C, D, E
outlined in Office Dept B and Depts B,C,D
strategic only) C
Case Carried Carried Preferred Carried Discount
forward forward way forward forward
Once the preferred way forward for potential scope has been identified:
5. Identify ‘potential solutions’ for improving organisational capabilities within the
programme’s preferred way forward for potential scope, ranging from business-as-
usual (BAU) through to the ‘do minimum’ and ‘do maximum’ and intermediate options.
These options focus on the outputs, activities and potential projects required.
6. The ‘do minimum’ solution must be a realistic option that meets the ‘core’ requirements
and essential business needs for the programme. The ‘Do maximum’ solution must not
exceed the agreed scope for the programme as defined in the strategic case (which
must be revisited if it does). Limit intermediate options to those that have key
differences in relation to their desirable and optional outputs and activities.
Be innovative and think in terms of what other organisations have achieved, what is
likely to work, and what is available in the marketplace.
CSFs.
ii. Discount unrealistic options. Carry forward possible options, including ‘Do
nothing’ and ‘Do minimum’ solutions.
iii. Identify the preferred way forward (PWF) – the ‘solution’ that is considered most
likely to optimise value.
Solutions identified for a programme that are more ambitious than the ‘do
minimum’ must be justified on their potential for delivering additional value.
Case study: for a service improvement programme where the ‘service solution’ relates to the
number of outputs and activities – potential projects – that might be required within the programme.
Programme Do nothing Do Intermediate Intermediate Do
minimum option option maximum
2 Service 2.0 Current 2.1 Core: 2.2 Core & 2.3 Core & 2.4 Core &
solution – in services QMS + desirable desirable desirable
relation to training plus: plus: plus:
the preferred New IT Refurbished New offices
scope office
(option 1.2 Carried Carried Carried Preferred Discount
above) forward forward forward way forward
Once the preferred way forward for potential service solution has been identified:
7. Identify potential options for ‘service delivery’ of the programme’s preferred way
forward in relation to potential scope and service solution.
These options focus on the delivery of the outputs, activities and potential
projects required.
In this instance the ‘Do minimum’, Intermediate and ‘Do maximum’ choices relate to the
varying levels and degrees of ‘ambition’ for service delivery, so a ‘Do maximum’ is not
necessarily required.
Be innovative and challenge whether the organisation is currently sourcing and
delivering the services it provides in the most efficient and cost-effective way:
 All state sector proposals requiring Cabinet approval that have whole-of-life costs
in excess of $25 million must consider non-traditional procurement options for
service delivery, including public private partnership (PPP). For more detail see
Annex 1 and contact the New Zealand Infrastructure Commission for advice.
 State sector programmes – if there are options with structural implications for
government (eg setup of a new Department/Departmental Agency) you must
engage early with the State Services Commission, which provides advice and
guidance in this area: www.ssc.govt.nz/mog
CSFs.
ii. Discount unrealistic options. Carry forward possible options, including ‘do
nothing’ and ‘do minimum’ service options.
iii. Identify the preferred way forward (PWF) – the method of ‘service delivery’ that is
likely to provide the optimal outcome in terms of programme and operational
delivery.
Case study: for a service improvement programme where ‘service delivery’ relates to how the
required outputs and activities or potential projects might be provided within the programme.
Programme Do nothing Do Intermediate Intermediate More
minimum option option ambitious
3 Service 3.0 Current 3.1 In- 3.2 3.3 Mix in- 3.4
Delivery – in arrangement house Outsource house and Strategic
relation to the s outsource partner
preferred Carried Carried Discount Preferred Discount
scope and forward forward way forward
solution(option
s 1.2 and 2.3
above)
Once the preferred way forward for potential service delivery has been identified:
8. Identify potential options for implementation of the programme’s preferred scope,
service solution and method of service delivery.
These options focus on the sizing, sequencing and phasing of the potential
outputs, activities and projects required.
The agreed programme tranches and projects in the tranches are usually determined
through a series of workshops and meetings with stakeholders where the mix is
considered, evaluated, costed, deemed impossible, relitigated to make the tranches
affordable and achievable etc.
The mix of projects
As part of this action, identify the projects that best achieve the investment objectives and
service requirements, yet lie within the boundaries of the scope parameters and critical success
factors identified for the programme.
The following criteria may also be helpful in determining and recommending the mix of projects
within a programme:
 Proximity to delivery: Projects close to completion (particularly where there is a high degree
of confidence in the achievement of investment objectives) could be allowed to continue and
included within the programme, in order to deliver quick wins
 Dependencies: Projects which are dependent on particular programme outcomes may be
grouped together.
 Achievement of investment objectives: Projects likely to contribute significantly to the
programme investment objectives should be included within the programme.
Organising into tranches
The preferred programme option includes identification of the programme’s tranches.
Typically, programmes are planned as a series of sequential tranches which meet elements of
the business needs at defined points in the future. Completion of each tranche is also an
opportunity to review the Programme Business Case as a basis for seeking confirmation to
continue to invest in the mix of projects and activities within the programme; consider
completion of each tranche as a potential off-ramp.
The recommended programme tranches show intermediate future states and outline which of
the programme outcomes will be realised at the end of each tranche.
 Develop a programme roadmap that identifies the programme tranches and each tranche’s
contributions to investment objectives, costs and benefits at the end of each tranche.
 There is no need to identify all projects and activities across all tranches. For the first
tranche, projects should be identified in some detail, because the Programme Business
Case is seeking approval to commence business case development for these projects.
In this instance the ‘do minimum’, intermediate, and ‘do maximum’ relate to the varying
levels and degrees of ‘ambition’ for implementation, so a ‘do maximum’ does not
necessarily apply.
 Create tranches that provide synergies, holistic fit and sufficient critical mass for
delivering economies of scale, and size accordingly
 Focus on the critical path for delivering the required outputs and activities and
sequence accordingly
 Design and build projects that optimise benefits delivery while managing the risks
and phase accordingly
 Consider the requirement for off-ramps.
CSFs.
ii. Discount unrealistic options for implementation. Carry forward possible
options, including ‘Do nothing’ and ‘Do minimum’ service options.
iii. Identify the preferred way forward (PWF) – the approach to the sizing,
sequencing and phasing of potential projects that is most likely to deliver
successful outputs and outcomes.
Case study: for a service improvement programme where ‘implementation’ options relate to how
the required outputs and activities might be delivered over time.
Programme Do Do Intermediate Intermediate Do
nothing minimum option option maximum
4 Implementation 4.0 4.1 Tranche 1 4.2 Tranche 1 4.3 Single N/A
– in relation to Project A: Project A: tranche
QMS & refurbished Project A:
the preferred training offices & new QMS &

scope and Project B: IT training
solution and refurbished Project B: Project B:
offices & new QMS & refurbished
method of
IT training offices & new
service delivery Tranche 2 Tranche 2 IT
(options 1.2, Project C: Project C: Project C:
2.3, 3.3 above) New services New services New services
1&2 2&4 1,2,3 & 4
Project D: Project D: New
New services services 1&3
3&4
Phased 3 Phased 2 Big bang
years years 1 year
N/A Carried Preferred Discount
forward way forward
Once the preferred way forward for implementation has been identified:
9. Identify possible ‘funding options’ for resourcing of the programme’s preferred scope,
service solution, method of service delivery and implementation.
These options focus on the range of different ways in which the programme’s
projects and activities could be funded, including both traditional and innovative
sources of finance.
In this instance the ‘Do minimum’, intermediate, and ‘Do maximum’ relate to the varying
levels and degrees of ‘ambition’ for funding the service, so a ‘Do maximum’ does not
necessarily apply.
i. Carry out a SWOT analysis for each option – note advantages and disadvantages
and how well it meets the agreed investment objectives and CSFs.
ii. Discount unrealistic options for implementation. Carry forward possible options,
including ‘Do nothing’ and ‘Do minimum’ service options.
iii. Identify the preferred way forward (PWF) – the funding option that is most likely
to meet the requirements of the programme, to optimise value for money and be
affordable.
Case study: for a service improvement programme where potential projects and activities could be
funded in their design, build and operational phases through a number of sources.
Programme ‘do Do Intermediate Intermediate Do
nothing’ minimum option option maximum
5 Funding – in 5.0 5.1 Public 5.2 Private 3.3 Mixed
relation to the funding finance public &
preferred private
scope, N/A Carried Discount Preferred
solution, forward way forward
method of
service
delivery and
implementatio
n (options 1.2,
2.3, 3.3, 4.2
above)
A wide range of possible solutions should be considered under each of the five dimensions.
There is no set limit on the number of composite options that may be generated – but to
avoid undue analysis effort, impractical options can be discarded as part of the workshop
process (take a note of the reasoning).
The options framework is a useful tool; even in this very simplified case study, over 20 main
options have been considered – for scope, solution, service delivery, implementation and
funding – and indirectly over a thousand possible combinations of different options.
The individual tables can be merged to form a single page summary of the options that have
been considered – a useful format for senior management.
End of options framework insert
Annex 2 shows a worked example of an options framework. This one is for a project, but the
same principles apply.
Required evidence
The business case should:
 reference any Feasibility Study or Discovery work undertaken
 describe the approach that was used to identify and assess the programme options
and the stakeholder roles involved.
The full long-list assessment should be documented and included as an annex to the
Programme Business Case; this enables the reviewer to assess the level of analysis and
thinking underlying the preferred way forward.
What’s expected?
The suggested steps are:
10. Identify the key dimensions of choice
Key dimensions of choice for programmes are typically within the scope and solutions (or
capabilities to be developed)
11. Identify possible options within each dimensions
Systematically identify possible options within the selected dimensions where there are
choices.
12. Assess options against the programme’s investment objectives and critical success
factors
Discard options that are plainly unrealistic or uneconomic by rejecting any option that does
not fully meet all of investment objectives and critical success factors. The extent or depth of
the options assessment should be tailored to the relative size, impacts, and risks of the
proposal. The assessment should be based information that is readily to hand.
13. Develop programme options
From the options that meet all the investment objectives and critical success factors
construct at least three options by combining the options from the various dimensions.
14. Evaluate the programme options
For each of the programme options, a rough order cost benefit analysis should be provided
including indicative monetary and non-monetary costs and benefits. Costs and benefits
should be widely ranged to avoid creating unrealistic expectations. The relative risks
associated the delivery of each option should also be considered.
Methods and tools for gathering the evidence for Actions 6 and 7
We recommend a series of facilitated workshops with key stakeholders to agree the critical
success factors and the long-list of programme options. The options framework is a
particularly useful tool to relatively quickly identify and assess a large number of potential
options across the five dimensions.
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Action 8: Recommended Preferred Way Forward

Purpose
The purpose of this action is to recommend a preferred programme option and determine the
programme tranches and initial projects.
This action identifies the preferred way forward for the programme – scope, solution, service
delivery, implementation and funding – together with the short-listed options (those carried
forward) against which the preferred way forward will be appraised.
Note: the preferred way forward is NOT the preferred option at this stage. The preferred
option is identified from the appraisal of the short-listed options.
What’s expected?
The programme option that optimises costs, benefits and risks should be recommended as
the preferred option.
For the preferred option the programme’s tranches should be identified. By their very nature
programmes will progressively deliver the identified investment objectives over time.
Typically, programmes are planned as a series of sequential tranches which elements of the
business needs at several defined points in the future. The recommended programme
tranches show intermediate future states and outline which of the programme outcomes will
be realised at the end of each tranche.
 A programme schedule or roadmap should be developed that identifies the programme
tranches together contributions to investment objectives, costs and benefits at the end
of each tranche.
 There is no need to identify all projects across all tranches. However, all key activities
or work packages should be identified. For the first tranche, projects should be
identified because the programme business case is seeking approval to commence
business case development for these projects.
Short-listing options
From the long-list, the Programme Business Case should filter to identify a minimum of three
to four shortlisted options for further appraisal. These should include:
 ‘Do nothing’ or ‘Status quo’ or ‘BAU’ option – the benchmark for considering the relative
value for money of alternative options
 The ‘Do minimum’ option – a realistic way forward that also acts as a further
benchmark for value, in terms of cost justifying further intervention
 The ‘recommended’ preferred way forward at this stage
 One or more possible options based on realistic ‘more ambitious’ and ‘less ambitious’
choices that were not rejected at the long-list stage.
Avoid going into ‘solution mode’ – that is, take care to avoid ‘rigging’ and ‘retro-fitting’ options
that have been pre-determined. The programme should seek guidance from its reviewers if it
finds itself in this position.
Using the options framework to develop the short-list

The options framework can then be used to filter the options considered at the long-list stage
to generate the potential short-list for the programme, as shown below:
Case study: the options workshop for the service improvement programme generated the following
short-list of options on the basis of the long-list, using the options framework for further consideration
and appraisal.
Drafting the short-list

The short-listed options should be described and a further assessment of their strengths,
weaknesses, opportunities and threats undertaken, as described. The format used for
drafting the long-list can be used for this purpose – see action 7.
A summary of the short-listed options case usefully be provided and colour-coded:
 Red- does not meet
 Yellow- partially meets
 Green- fully meets.
Figure XX: Summary assessment of options
Reference to: Option … Option Other options Other options Option
Description of option: Do Do minimum Intermediate Intermediate Maximum
nothing/BAU 1 2
Investment Objectives
1… ꭗ ? √ √ √
2 ꭗ ? √ √ √
3 ꭗ ? √ √ √
4 ? ? √ √ √
5 ꭗ ? ? √ √
Critical success factors
Business need * ꭗ ? ? √ √
Strategic fit * ꭗ ꭗ ꭗ √ √
Benefits optimisation ꭗ ? ꭗ √ ?
Potential achievability √ √ ? ? ?
Supplier capacity & capability √ √ √ √ ?
Potential affordability ꭗ √ √ ? ꭗ
Summary Rejected Possible Possible Preferred Rejected
[Note: ‘Business need’ and ‘strategic fit’ may be considered together, as assessed earlier in
the document. Be pragmatic – together or separate, whichever better meets your needs.]
Indicative costs and delivery arrangements

Indicative costs and benefits for each of the above short-listed options that are carried
forward should be developed at this stage to test the affordability of the programme.
Describe the approach used to develop the rough order cost benefit analysis, and the key
financial assumptions. Refer to the Treasury’s wellbeing approach to cost benefit analysis:
https://treasury.govt.nz/information-and-services/nz-economy/living-standards/our-living-
standards-framework/wellbeing-approach-cost-benefit-analysis
The costs should include some allowance for the uncertainty of cost and risk (‘optimism bias’
and the ‘cost of risk’) and together with the benefits should be rejected to provide indicative
net present values for the short-listed options.
Suggested evidence
Engagement with key stakeholders on the process to determine the shortlist should be
described.
The approach to developing the programme schedule and roadmap should be described.
The approach used to develop the rough order cost benefit analysis should be described
together with key assumptions.
Methods and tools to gather the evidence

We recommend a facilitated workshop with key stakeholders to analyse the long-list options
and develop the short-list.
Outline the Commercial Case

Step 5: Preparing for the potential deal
Completing the commercial case requires the following actions for the preferred programme
option identified in the economic case:
Step 5 Preparing for the potential deal
Action 14 Determine procurement strategy
Action 15 Determine service streams and required outputs
Action 16 Outline potential risk apportionment (Infrastructure programmes only)
Action 17 Outline potential payment mechanisms
Action 18 Ascertain contractual issues and accountancy treatment
The level of detail at this stage will be high level: sufficient to provide decision-makers with
an early view of key factors that may affect the commercial viability of the proposal.
Purpose of the Commercial Case

The purpose of the commercial case is to set out the procurement arrangements for
programme’s projects and key activities. These arrangements need to be considered from
the outset, to secure long-term social value during the operational phase of the programme.
If you need more detailed information see the Detailed Business Case guidance, actions 14-
18: www.treasury.govt.nz/statesector/investmentmanagement/plan/bbc/guidance
The commercial case requires a solid understanding of procurement and contracts;
organisations should engage a commercial specialist to assist in this part of the
business case development if internal expertise is not available.
 For infrastructure programmes, engage early with the New Zealand Infrastructure Commission
(NZIC): https://treasury.govt.nz/information-and-services/nz-economy/infrastructure/nz-
infrastructure-commission
 For state sector agencies, engage early with the Ministry of Business Innovation & Employment
(MBIE): www.procurement.govt.nz/procurement/ for advice and guidance.
 MBIE also provides guidance on when and how to approach the market, including the use of a
competitive dialogue approach to formally approach the market before issuing tender
documents. Check this guidance first, subject to any other Government Rules of Sourcing
obligations and expectations that may apply to your sector or organisation
The detailed commercial case is completed in the Detailed Business Cases for major
projects (or for tranches) within the programme.
We recommend at least one facilitated workshop with key commercial staff and potentially
with MBIE or NZIC at the Programme Business Case stage, to discuss options and
approaches.
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Action 14: Determine procurement strategy

What’s expected?
Outline the organisation’s procurement strategy and attach it to the PBC as an Annex.
For the preferred option, outline the intended procurement strategy, which should include
required needs (scope), the intended outcomes, market analysis and capability (supplier
market engagement and ability of the market to deliver the best value for money (commercial
viability) and level of complexity and risk. Consider how the required services, supplies or
works can best be procured in accordance with established rules and regulations and the
commercial strategy for the organisation. Key considerations are:
 The choice of procurement method and the degree to which early consultation with the
market is required. Early market engagement and procurement planning is particularly
important for innovative or more complex services where there may be little market
depth and experience (Public Private Partnerships in particular).
 The extent to which the organisation should be acting as a single procurement entity or
procuring more collaboratively with other organisations to secure economies of scale
and improved social value.
Provide an initial assessment of the commercial viability of the programme, in terms of
attractiveness to potential suppliers and in terms of providing long-term value for money to
the organisation and New Zealand.
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Action 15: Determine service streams and required outputs

Identify the programme’s service streams and required projects and outputs, and the scope
and content of potential deals to be made with public and private sector service providers.
This should be done on a project-by-project basis, for significant projects. Consider the
following approaches:
 Framing the programme’s requirements in terms of the outcomes and outputs to be
produced, so as to enhance innovation.
 Specifying the quality attributes of the services and outputs required, together with the
performance measures against which they will be assessed.
 Scoping the potential deals in such a way as to permit potential service providers to
suggest innovative ways of meeting the programme’s project requirements.
Services and required outputs

Summarise the services and outputs the programme proposes to procure, by project, and the
potential implementation timescales required.
These may be clear for early tranches but not so clear for later tranches, as the best way to
deliver the outcomes may change over the lift of the programme.
Focus on the major and early procurements, and keep it high-level, as procurement could be
extremely complex, depending on the scale and scope of the programme. For example, a
hospital infrastructure programme lasting 10 years and costing (indicatively) $1bn would
have multiple tranches and within that, hundreds of projects all with their own procurements.
Consider capturing the following details for the programme and its projects:
 The business areas affected by the procurement(s)
 The business environment and related activities
 The business objectives relevant to the procurement(s)
 The scope of the procurement(s)
 The required service streams
 The required outputs, including phases, performance measures and quality attributes
 The stakeholders and customers for the outputs
 The options for variation in the existing and future scope for services
 The potential developments and further phases that may be required.
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Procurement plan and proposed implementation timescales

Outline, and/or attach to the Programme Business Case, the high-level programme plan for
the procurement of key projects, outputs and activities.
This should include indicative timescales for the procurement of key projects.
Action 16: Outline potential risk apportionment

Be wary regarding ‘risk sharing’. Ultimately, the agency and its CEO is still accountable. ‘Risk
sharing’ doesn’t protect the agency in the event of an adverse occurrence (eg a privacy
breach by a 3rd party software company).
Note also that moving risk to a supplier comes at a cost and will be reflected in the
contract(s) as a risk premium.
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Action 17: Outline potential payment mechanisms

Identify, at a high level, how the programme intends to make payment for its key projects and
services over the lifespan of any contracts. Note that this will be developed further in
subsequent detailed/tranche business cases.
Consider how best to incentivise the service provider(s) to provide value for money over the
lifespan of the programme and its operational phase. This will help the organisation to deal
with the inevitable need for change to services and operations in the future and to embed risk
transfer and allocation within the charging mechanism for the programme.
The charging mechanism is the formula against which payment for the contracted services
will be made. The underlying aim of the payment mechanism and pricing structure is to
reflect the optimum balance between risk and return in the contract. As a general principle,
the approach should be to relate the payment to the delivery of service outputs and the
performance of the service provider.
Properly constructed payment mechanisms incentivise the service provider to deliver
services in accordance with the business imperatives of the public sector in the following key
phases of the service:
 Pre-delivery phase: up to the acceptable delivery of the service and start of the
payment stream
 Operational phase: following acceptable delivery of the service up to the close of the
primary contractual period
 Extension phase: post primary contract period.
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Action 18: Ascertain contractual issues and accountancy

treatment
Outline the contractual arrangements for the procurement of the programme’s projects,
including the use of a particular contract, the key contractual issues for the deal and its
accountancy treatment and personnel implications (if any).
This section should focus on the overall approach, rather than the detail. For example, it is
unlikely at this stage that you will know the form of contract to be used, unless the
programme includes a single large procurement. Many programmes will have multiple
procurements and multiple forms of contracts; state the principles and approach to be used
in determining the contract forms.
 For example: standard contracts will be used wherever possible; bespoke contracts will
not be used unless there is a clear advantage to doing so.
Outline any known contractual issues, if any have been identified to date.
The detailed business case for each tranche, or project within the programme, will provide
further detail for specific contracts. These will vary from project to project, but in most
instances the main areas of the contract to be categorised are:
 The duration of the contract(s) and any break clauses
 The service provider’s and procuring authority’s respective roles and responsibilities in
relation to the proposed deal
 The payment/charging mechanism, including prices, tariffs, incentive payments etc
 Change control (for new requirements and updated services)
 The organisation’s remedies in the event of failure on the part of the service provider to
deliver the contracted services – on time, to specification and price
 The treatment of intellectual property rights
 Compliance with appropriate regulations etc
 The operational and contact administration elements of the terms and conditions of
service
 Arrangements for the resolution of disputes and disagreements between the parties
 The agreed allocation of risk
 Any options at the end of the contract.
Don’t document these here unless there is a single large procurement and consideration of
these issues has started. Allow time in planning to discuss and consider these in
procurement planning.
Accountancy treatment
Provide details of the intended accountancy treatment for the programme’s potential deals by
stating on whose balance sheet – public or private sector, or both – the assets underpinning
the service will be accounted for; and the relevant accountancy standard(s).
A letter supporting the balance sheet conclusion should be provided by the organisation’s
Finance Director or by an external auditor.
Personnel implications
Identify any personnel implications for the programme. Public sector organisations are often
obliged to involve their staff and their representatives in a process of continuous dialogue
during significant projects involving considerable internal change. This is also best practice in
terms of human resources policies.
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Financial Case
Completing the financial case requires the following actions for the preferred option identified
in the economic case:
Step 6 Ascertaining affordability and funding requirement
Action 19 Prepare financial model and the financial appraisals
an early view of key factors that may affect the financial viability of the proposal.
Purpose of the Financial Case

The purpose of the financial case is to ascertain the affordability and funding requirements of
the preferred option, and to demonstrate that the recommended programme and its
supporting projects are affordable.
This involves determining the funding and affordability of the proposed programme and its
supporting projects on the organisation’s income and expenditure accounts, baseline, and
balance sheet.
The costs and benefits appraised in the financial case reflect an accountancy-based
perspective; organisations should fully involve their finance team in this part of the
business case development.
Step 6: Ascertaining affordability and funding requirements

Action 19: Prepare funding model & the financial appraisals
The focus of the financial and economic appraisals are completely different. The economic
appraisals focus on the value for money of the overall programme; the financial appraisals
focus on the affordability and fundability of the programme and its constituent projects and
activities.
Both resource and non-resource costs and benefits are factored into the analysis; so, for
example, while transfer payments and depreciation are excluded from the economic
appraisals, these costs are included in the financial appraisals, because they have a direct
bearing on the affordability of the programme.
What’s expected?
Decision-makers will expect a best-possible indication of the funding envelope and its
affordability, based on the information available, to provide an early indication of key factors
that may affect the affordability of the proposal. Identify the primary funding sources for the
programme, including mixes between different organisations, fees recovery and other
sources. Identify funding gaps and areas where decision-makers will need to make further
funding decisions.
Provide an initial assessment of the overall affordability of the preferred programme option
and possible funding sources and requirements. This can include:
 the current financial situation of the organisation
 an overview of resources available for implementing the proposal, including an
assessment of the ability of the organisation to provide on-going support
 any capital and revenue constraints
 statements of strategic or in-principle support from stakeholders.
For more detail refer to the Detailed Business Case guidance, Action 19:
http://www.treasury.govt.nz/statesector/investmentmanagement/plan/bbc/guidance
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Management Case
Step 7: Planning for successful delivery
Completing the management case requires the following actions:
Step 7 Planning for successful delivery
Action 20 Plan programme management – strategy, framework & plans
Action 21 Plan change management – strategy, framework & plans
Action 22 Plan benefits realisation – strategy, framework & plans
Action 23 Plan risk management – strategy, framework & plans
Action 24 Plan programme assurance and post-project evaluation – strategy, framework &
plans
an early view of the organisation’s capability to deliver the programme.
Purpose of the Management Case

The purpose of the management case is to describe the arrangements that will be put in
place for the successful delivery of the programme and its constituent projects, both to
ensure successful delivery and to manage programme risks.
Action 20: Plan programme management – strategy, framework

& outline plans
Describe the strategy, framework and plans for successful programme delivery using a
proven methodology for guiding investments through a controlled, well managed and visible
set of activities to achieve the desired results and benefits.
If the organisation has an (Enterprise) Programme Management Office in place, plan to
leverage it, and reference its resources here – skills, processes and documents.
Programme and project methodology (PPM) strategy

The implementation strategy of most organisations for the successful delivery of initiatives is
to adopt programme and project management methodologies which are based on proven
standards and quality management. Recognised international or national standards should
be adopted for both programme and project management.
State the methodology adopted and the organisation’s experience in its use.
 Note that introduction of a new methodology (eg moving to Agile methods) carries risks
and should itself be managed as a project.
Programme and project framework

Summarise key aspects including:
 programme structure (including an organisation chart)
 programme reporting arrangements
 governance arrangements
The Senior Responsible Owner (SRO), programme manager and business change
manager(s) should be members of the programme board. The following roles should
be considered as optional attendees to provide advice and expertise, as required:
 Project executives for current or relevant projects in the programme
 Representatives of corporate functions – finance, risk, procurement, etc.

 Lead supplier – if there are different suppliers across the projects in the programme,
it may be advisable to appoint a lead supplier with whom the team will work at the
programme level.
 key roles and responsibilities
 appointed personnel and any vacancies
Appointment of the Senior Responsible Owner (SRO)
The SRO is accountable for the programme, and for ensuring that it meets its objectives and
delivers the expected benefits. The individual who fills this role must be able to lead and
champion the programme, and must be empowered to direct the programme and take
decisions; for example, whether to delay or stop any part of the programme. SROs must
have sufficient seniority and authority to provide leadership to the programme and to take on
accountability for delivery.
The day-to-day leadership of the programme may be undertaken by a Programme Director,
but this is not an alternative to the SRO role.
Programme plan
The programme plan is used to control and track the progress and delivery of the programme
and resulting outcomes. It describes how, when and by whom a specific project, milestone or
set of targets will be achieved. It is the detailed analysis of how identified programme targets,
milestones, deliverables and products will be delivered to timescales, costs and quality.
The most up-to-date version of the programme plan should be summarised and attached to
the Programme Business Case as an Annex.
The programme plan should typically include:
 overall programme schedule showing the relative sequencing of tranches and projects
 content of tranches
 dependency network illustrating project input and output relationships
 cross-reference to the risk register to explain any planned risk register activities
 an explanation of the grouping of projects and major activities into tranches and the
points at which end-of-tranche reviews will take place
 risks and issues referenced during planning
 transition planning information and schedules
 programme level management activities required to implement the monitoring and
control strategy
 estimated effort and costs associated with the programme
 when business cases for key projects in the programme (or tranches) will be delivered.
Use of special advisors
The use of specialist advisors is encouraged where the necessary capabilities and
competencies are in short supply for large, significant, complex and novel programmes, and
where an independent and impartial role is required to achieve the best results. This includes
facilitating workshops.
The requirement for specialist advisors usually falls into five key categories in the programme
plan: financial, legal, commercial, technical and project/programme management (including
eg Agile coaches). The Programme Business Case should indicate how and when this
advice will be used along with expected costs.
Ownership of the Programme Business Case and responsibility for its development must be
retained by the Programme Board. Organisations may outsource to get specialist skills for its
completion, but must retain intellectual ownership of the thinking.
Evidence required
There must be evidence that:
 Programme management processes and arrangements are already in place within the
organisation (eg through an Enterprise Programme Management Office) and plans are
in place to apply these arrangements to the programme - or -
 The organisation has considered the requirement to introduce a programme
management methodology and has plans that show how this will be done.
Action 21: Plan change management – strategy, framework &

outline plans
Design and put in place to the extent required (given that the PBC has not yet been
approved) the strategy, framework and plans for managing organisational change.
Programmes are about delivering change. This can range from service improvement,
business process re-engineering to implementation of a new capability for the organisation or
a transformation in what and the way services are delivered. Even where change is not seen
as the primary driver for investment, as in the case of a replacement programme, every effort
should be taken to seize the opportunities for improving the efficiency of the service and
social value.
Change needs to be managed and embraced by individuals within the organisation, hence
the need for a change management strategy (linked to benefits realisation); a change
management framework (to manage anticipated and unexpected change) and a plan (to
explain what will be delivered, by whom and when in terms of underlying activities).
There are various management strategies for implementing change depending on the degree
and pace of change required. The programme’s change management strategy should be
summarised and attached in full as an annex, together with its communication and
development (training) strategies.
The responsibility for the delivery of service change belongs to the Programme Board and
must remain under its control. If the programme change is part of a broader strategy of
change, the governance and reporting requirements must be clearly explained.
Action 22: Plan benefits realisation – strategy, framework &

outline plans
approved) the management arrangements required to ensure that the programme delivers its
anticipated benefits.
Treasury provides detailed guidance for benefits realisation for programmes and projects:
www.treasury.govt.nz/information-and-services/state-sector-leadership/investment-
Benefits realisation strategy

The responsibility for benefits realisation lies with senior management, who must ensure that
the benefits delivery arrangements are outlined within the Programme Business Case.
The benefits realisation strategy should set out arrangements for the identification of
potential benefits, their planning, modelling and tracking. It should also assign responsibility
for the actual realisation of those benefits throughout the key phases of the programme.
At the Programme Business Case stage of a programme the following should be available
for the PBC to reference; if these were created earlier (eg as part of the Strategic
Assessment process) revisit and update to reflect any changes and additional information
available:
 Benefits map: identifies benefits and relationships and linkages to intended outcomes.
All anticipated benefits identified in the strategic case and appraised in the economic
case sections of the Indicative Business Case must be accounted for in the register.
This is also a good time for a workshop to identify emerging benefits (or disbenefits)
 Strategic alignment: how outcomes and benefits align to strategy.
 Initial benefits profiles, including (preliminary) identification of measures
 Benefits Realisation Plan, including:
o business ownership agreed with the owners
o identification of key risks to each benefit’s delivery
o likely delivery dates
o monitoring and reporting plans
Evidence required
There must be evidence that planning for benefits realisation is underway and benefits
delivery arrangements are outlined.
All benefits identified in the strategic case and appraised in the economic case sections of
the Programme Business Case must be accounted for in the register.
Action 23: Plan risk management – strategy, framework & outline

plans
approved) the arrangements for managing and mitigating risks during the programme.
Risk management is a structured approach to identifying, assessing and controlling lists that
emerge during the course of the policy, programme or project lifecycle. Its purpose is to
support better decision-making through understanding the risks inherent in a proposal and
their likely impact. By managing risk, the expected costs of a proposal are lowered or the
expected benefits increased; risk and benefit are two sides of the same coin, and successful
delivery depends on the effective identification, management and mitigation of risk.
Risk management strategy

Strategies for the proactive and effective management of risk involve:
 identifying possible risk in advance and putting mechanisms in place to minimise the
likelihood of them materialising with adverse effects
 having processes in place to monitor risks, and access to reliable, up-to-date
information about risks
 the right balance of control to mitigate against the adverse consequences of risks, if
they should materialise
 decision-making processes supported by a framework for risk analysis and evaluation.
Programmes must capture all identified risks within a register that indicates how they will be
managed and mitigated. The register should be regularly and frequently reviewed and
updated throughout the programme; all the risks identified in the strategic and economic
case sections of the Programme Business Case must be accounted for in the register.
Action 24: Plan programme assurance and post-programme

evaluation
Design and put in place the necessary arrangements for programme assurance, quality
assurance and post evaluation.
Programme Assurance
Gateway Reviews are mandated for significant projects and programmes in organisations in
scope for Cabinet Office Circular CO(19)6 10which have been assessed as High Risk (through
completion and review of a Risk Profile Assessment) and thus require Gateway reviews.
 Engage with the Treasury’s Investment Reviews team early, to ensure that Gateway or
other Investment Reviews can be scheduled for appropriate points in the programme:
investmentreviews@treasury.govt.nz
Programme assurance provides independent and impartial assessment that the
programme’s investment objectives can be delivered successfully, and improves the
prospects of achieving intended outcomes and benefits.
These programmes also require an Operational & Benefits Realisation review, and must
report to Cabinet on the achievement of benefits one year after go-live (refer CO(19)6).
Quality Assurance
Other forms of assurance include: Independent Quality Assurance; Independent Technical
Assurance; security assurance.
ICT-enabled programmes and projects must develop an Assurance Plan and agree this with
the Government Chief Digital Officer (GCDO).
 Engage with the GCDO early to ensure that the programme meets its requirements in
terms of assurance: GCDO@dia.govt.nz
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The Chief Executive letter

A letter should be provided by the programme commissioner(s)/Chief Executive(s) and
included as an annex to the Programme Business Case. This letter should:
 demonstrate that the commissioner has been actively involved in the development of
the investment proposal through its various stages
 confirm acceptance of the strategic aims and investment objectives of the investment
proposal, its functional content, size and services
 confirm that the indicative cost and benefit estimates of the proposal are sound and
based on best available information
 state the margins of leeway beyond which any support must be revalidated
 demonstrate that suitable contingency arrangements are in place to address any
current or unforeseen affordability pressures.
10
https://dpmc.govt.nz/publications/co-19-6-investment-management-and-asset-performance-state-services-
html
Annex 1: Considering PPP and alternative procurement

options
The New Zealand PPP Model
In the New Zealand context, a Public Private Partnership (PPP) refers to a form of
procurement based on a long-term contract for the delivery of a service, where the service
involves the construction of a new asset or enhancing an existing asset. The project is
privately financed on a non-recourse basis and full legal ownership is retained by the Crown.
On 1 October 2019 a new independent infrastructure body, the New Zealand Infrastructure
Commission – Te Waihanga, is being established to help improve how New Zealand
coordinates and plans our infrastructure, make the most of the infrastructure we already
have, and plan long-term to ensure investment delivers what we need, where and when we
need it. IT will also have procurement and delivery support functions. In the interim, an
Infrastructure Transactions Unit (ITU) has been established in Treasury; this team will be
incorporated into NZIC from October 2019.
PPP guidance: https://treasury.govt.nz/information-and-services/nz-
economy/infrastructure/nz-infrastructure-commission/infrastructure-
transactions-unit/public-private-partnerships/guidance
Contact the ITU itu@treasury.govt.nz.
Cabinet Mandated Consideration of PPP Procurement

For infrastructure projects agencies must evaluate all procurement options, including
innovative and non-traditional approaches to procurement and alternative financing
arrangements, including PPP procurement, and should select the procurement approach that
best delivers the investment objectives while optimising whole of life costs.
 Note that current government policy precludes initiating the use of new Public Private
Partnerships (PPPs) in the education, health and corrections sectors.
Cabinet approval is also required for investment proposals that have significant fiscal and
policy implications and can affect the government’s reputation in the marketplace. In
particular:
 Cabinet approval is required for any innovative or non-traditional approaches to
procurement, alternative financing arrangements or public private partnership (PPP)
investment proposals.
Agencies must also apply the Government Procurement Rules:
https://www.procurement.govt.nz/procurement/principles-and-rules/government-
procurement-rules. These Rules are supported by a set of guidance which agencies should
use where appropriate.
Considering PPP Procurement within the Programme Business

Case
At an early stage, procuring entities should engage with the Treasury ITU Team and consider
the potential suitability of PPP procurement for proposed projects. For procuring entities
applying the Better Business Case framework, formal consideration of PPP procurement is
required through the development of the Programme Business Case and has implications for
the process of developing subsequent business cases (Single Stage or Indicative then
Detailed or direct to Detailed, as appropriate and agreed).
The consideration of procurement options is carried out at Action 7 of the PBC where
evaluation of a wide range of realistic options for meeting the identified service needs is
required. The suggested approach is to consider possible options against five dimensions:
scale, service solution, service delivery, implementation and funding. The resulting options
for implementing the preferred solution may range from the procuring agency self-performing
the delivery of all required assets and services to the provision of all services by a private
sector provider through assets developed and owned by that provider.
An initial qualitative assessment of PPP procurement is required. This should consider the
characteristics of the project and assess whether PPP procurement is likely to be suitable
and offer greater value for money. Further detail of those characteristics which should be
considered at a minimum are set out below.
If PPP procurement is to be included as a short-list option, additional consideration is
required as part of the Detailed/Tranche Business Case before PPP procurement is
presented to Cabinet. This additional consideration includes consultation with joint Ministers
(the Minister of Finance and Minister responsible for the procuring entity) and engagement
with potential interested parties through market sounding.
Two additional components (Actions 8a and 8b) are required to be added to Action 8 to
provide for this additional analysis.
Action 8a: Market Sounding
Early market engagement and procurement planning is particularly important for innovative
or more complex services where there may be little market depth and experience (eg PPPs).
Engaging with a representative sample of potential private sector partners (the market) early
in the planning process for a project can provide real value to a procuring entity as it can help
inform the opportunity for all parties – both in terms of readying the market for the project as
well as helping the procuring entity resolve the optimal scope and scale of the project.
While care must be taken to ensure that appropriate probity processes are observed, market
sounding provides the procuring entity an opportunity to gain a better understanding of the
appetite of the market for the project as well as any preferences or challenges the market
may have with certain scope and scale permutations.
The procuring entity must ensure that it is well prepared for the market sounding process and
that it presents a coherent and considered opportunity to the market. If the procuring entity is
not well prepared and has not considered a range of options or attempts to use the market
sounding process to ‘crowdsource’ innovation or intellectual property then it is likely to
damage the market’s appetite for the project.
Action 8b: Endorsement by joint Ministers
If, on the basis of the initial qualitative assessment and market sounding, PPP procurement
is considered a short-list option then joint Ministers should be consulted prior to submission
of the Programme Business Case to Cabinet. This provides Ministers with full visibility of the
analysis and assumptions which underpin the project and allow them to consider whether
there are any project or external factors which may also impact the likely success of PPP
procurement. For example, if the timing of another project, for which a different agency is
considering PPP procurement, may clash then Ministers may consider intervening.
If joint Ministers agree that PPP procurement is an appropriate option, further analysis will be
required as part of the preparation of the DBC. The IBC or PBC should short-list two
procurement options for further evaluation in the DBC which include PPP procurement and
the preferred form of conventional procurement. This is important as the preferred form of
conventional procurement will form the basis for the calculation of the Public Sector
Comparator (PSC) and will ensure a second option is available if further analysis as part of
the DBC results in PPP procurement being discarded.
PPP in the Detailed Business Case

Where PPP procurement is endorsed by Cabinet, the DBC will build on the analysis
completed as part of the PBC/IBC and Cabinet directive. Further qualitative analysis will be
required as well as quantitative analysis in the form of compiling a PSC. Ideally, the scope of
service provision to be included within the PPP will be confirmed at this time together with
finalisation of the project’s key outcomes and an indicative performance regime and risk
allocation.
Further guidance on the development of a PSC and quantitative value for money analysis:
http://www.treasury.govt.nz/statesector/ppp/guidance/public-sector-comparator
<back to guidance>
Annex 2: Worked Example of a Long-list Options Assessment

Scoping Options Service Solution Options Service Delivery Options Implem entation Options
Reference to SCO1 SCO2 SCO3 SCO4 SOL1 SOL2 SOL3 SOL4 SDO1 SDO2 SDO3 SDO4 IMP1 IMP2 IMP3 IMP4
Description of option Do Nothing Minimum Intermediate Maximum Discrete Integrated Integrated Regional In house Partially Partially Fully Phased System System National
Regionally Nationally and managed managed outsourced nationally phased by phased by implementa
National (led by (led by to by site region tion
Network [MINISTRY]) commercia commercia discipline
l supplier) l suppliers
Investm ent Objectives
Full supported netw ork MIMS No No Yes Yes No Partial Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
available for implementation by
X
Support improved clinical data No No Yes Yes No Partial Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
and management information
flow s
Improve the functionality and No Partial Yes Yes No Partial Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
flexibility of the Pathology IT
system to meet current and
future needs
Critical Success Factors
Business Need No No Yes Yes No Partial Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Strategic Fit No No Yes Yes No Partial Yes Yes Yes Yes Yes Partial Yes Yes Yes Yes
Benefits Optimisation No No Yes Yes No Partial Yes Yes Yes Partial Yes Partial Yes Yes Yes Yes
Potential Achievability Partial Yes Yes Partial Partial Yes Yes No Partial Partial Yes Partial No Yes No No
Supply-side capability and Partial Yes Yes Partial Yes Yes Yes Partial Partial Partial Yes Partial Yes Yes Yes Yes
capability
Potential Affordability No No Yes Partial Partial Yes Yes No No Yes Yes No Yes Yes Yes Yes
Summary Continued Discounted Preferred Possible Discounted Possible Preferred Discounted Discounted Possible Preferred Discounted Discounted Preferred Discounted Discounted
for VFM
Options progressed to the

shortlist
As the CSFs are crucial (not
desirable) any options that Refer
Note
had a CSF scoring a "No" are
below
discounted
Option Title
Option 0 Do Nothing SCO1 Do Nothing
Option 1 Intermediate SCO3 Intermediate SOL2 Integrated Regionally SDO3 Partially managed (led by commercial IMP2 Phased by site
Scope - Regional supplier)*
Option 2 Intermediate SCO3 Intermediate SOL3 Integrated Nationally SDO3 Partially managed (led by commercial IMP2 Phased by site
Scope - National supplier)*
Integration
Option 3 Maxim um Scope - SCO4 Maximum SOL2 Integrated Regionally SDO3 Partially managed (led by commercial IMP2 Phased by site
Regional Integration supplier)*
Option 4 Maxim um Scope - SCO4 Maximum SOL3 Integrated Nationally SDO3 Partially managed (led by commercial IMP2 Phased by site
National Integration supplier)*
* A capability analysis of the [MINISTRY} will be
conducted to see if SDO4 Partially managed (led
by [MINISTRY]) is a possibility. Based on present
incomplete information this does not appear to be
a viable option.
Annex 3: The 34 Better Business CasesTM actions
Annex 4: References
Department of Prime Minister and Cabinet (2001), Cabinet Office Circular CO (15) 05, Investment
Management and Asset Performance in the State Services: https://dpmc.govt.nz/news/new-cabinet-office-
circular-published-co-15-5-investment-management-and-asset-performance-state
HM Treasury (2003), Green Book: Appraisal and Evaluation in Central Government, Treasury Guidance
updated July 2011: https://www.gov.uk/government/publications/the-green-book-appraisal-and-evaluation-
in-central-governent
Ministry of Business, innovation and Employment (2011), Mastering Procurement: A Structured Approach
to Strategic Procurement, March 2011: https://www.procurement.govt.nz/procurement/guide-to-
procurement/
Ministry of Business, Innovation and Employment (2019), The Government Rules of Sourcing, October
2019: https://www.procurement.govt.nz/procurement/principles-and-rules/government-procurement-rules/
Smith, Courtney A and Flanagan, Joe (2001), Making Sense of Public Sector Investments: the five case
model in decision-making, Radcliffe Publishing Limited, (ISBN 1 85775 432 8)
The Treasury (2013) Better Business Case guidance, templates and supporting documents:
http://www.treasury.govt.nz/statesector/investmentmanagement/plan/bbc/guidance
The Treasury (2018) The Treasury’s CBAx tool: https://treasury.govt.nz/information-and-services/state-
sector-leadership/investment-management/plan-investment-choices/cost-benefit-analysis-including-public-
sector-discount-rates/treasurys-cbax-tool
The Treasury (2018) Cost benefit analysis including public sector discount rates:
https://treasury.govt.nz/information-and-services/state-sector-leadership/investment-management/plan-
investment-choices/cost-benefit-analysis-including-public-sector-discount-rates
The Treasury (2013) Regulatory Impact Assessments (2019):
 https://treasury.govt.nz/publications/legislation/regulatory-impact-assessments
 https://treasury.govt.nz/publications/guide/guide-cabinets-impact-analysis-requirements
The Treasury (2018) Living Standards: https://treasury.govt.nz/information-and-services/nz-economy/living-

standards
The Treasury (2018) Public Private Partnerships (PPPs) Guidance updated November 2018:
https://treasury.govt.nz/information-and-services/nz-economy/infrastructure/nz-infrastructure-
commission/infrastructure-transactions-unit/public-private-partnerships/guidance
The Treasury (2018) A wellbeing approach to cost benefit analysis: https://treasury.govt.nz/information-
and-services/nz-economy/living-standards/our-living-standards-framework/wellbeing-approach-cost-
benefit-analysis
Acknowledgements
This document was created using material provided by HM Treasury in the United Kingdom and the Welsh
Government (Llywodraeth Cymru), licensed under the terms of the Open Government Licence v3.0
(http://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/).
The Five Case Model is the best practice standard recommended by HM Treasury for the preparation of business
cases, published as The Green Book:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/685903/The_Green
_Book.pdf.
© Crown Copyright
This work is licensed under the Creative Commons Attribution 4.0 International licence. In essence, you
are free to copy, distribute and adapt the work, as long as you attribute the work to the Crown and abide by the other
licence terms.
To view a copy of this licence, visit https://creativecommons.org/licenses/by/4.0/. Please note that no departmental or
governmental emblem, logo or Coat of Arms may be used in any way which infringes any provision of the Flags,
Emblems, and Names Protection Act 1981.
Attribution to the Crown should be in written form and not by reproduction of any such emblem, logo or Coat of Arms.
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<Agency logo>

Template and Guidance

Programme Business Case (PBC)

Template Version: October 2019 (check Treasury website for updates)

Commercial Case <go to guidance>.........................................................................24

Financial Case <go to guidance>..............................................................................26

Management Case <go to guidance>.......................................................................28

Annex 1: Commissioner’s Letter...............................................................................31

Better Business CasesTM – Programme Business Case – Guidance.......................35

The Strategic Case – Making the Case for Change.................................................39

Economic Case – Exploring the Preferred Way Forward.........................................50

Annex 1: Considering PPP and alternative procurement options.............................73

Annex 2: Worked Example of a Long-list Options Assessment................................76

Annex 3: The 34 Better Business CasesTM actions...................................................77

Programme Business Case | 1

Before you start: Programme Business Case (PBC)

2 | Programme Business Case

The business case development process is organised around a ‘five-case’ structure

Programme Business Case | 3

State what decision-makers are being asked to consider or decide.

The purpose of this programme business case is to:

4 | Programme Business Case

The case for change

Potential programme options

Programme Business Case | 5

The preferred way forward

The project mix

Indicative costs and benefits

6 | Programme Business Case

Programme Business Case | 7

The Strategic Case – making the Case for Change <go to

The key aims of the organisation are to describe

Contribution to existing strategies

8 | Programme Business Case

The investment proposal aligns to the following Government/sectoral/ regional/organisational

Investment Objectives, Existing Arrangements & Business Needs

Investment Objectives <go to guidance>

Programme Business Case | 9

 Investment objective one:

Existing Arrangements and Business Needs

Table xx: Summary of the existing arrangements and business needs

10 | Programme Business Case

Potential Business Scope and Key Service Requirements <go to

Main Benefits <go to guidance>

Programme Business Case | 11

Health (primary) Safer and more efficient use of resources: text

Increased employment opportunities: text

Māori and Pacific cultural needs are recognised: text

Table xx: Analysis of primary potential disbenefits , eg (example

Health (primary) text

12 | Programme Business Case

Main Risks <go to guidance>

Optimism bias <go to guidance>

Programme Business Case | 13

Key constraints, dependencies and assumptions<go to guidance>

The proposal is subject to the following constraints, dependencies, and assumptions.

14 | Programme Business Case

The Economic Case – Exploring the Preferred Way

Critical Success Factors (CSFs) <go to guidance>

Programme Business Case | 15

Programme Options Identification <go to guidance>

16 | Programme Business Case

Programme Options Assessment <go to detailed Options