Kia ora koutou, ka mahi atu ngā mahi nui ki a koutou. Naumai rā ki tēnei hui, naumai rā ki te whakanui o tēnei rā. Kua tāi mai au ki tēnei hui nō Alan rā wako Clark.
I come here today from Alan and Clark. He kai tohu tohu mātua ahau. I am a senior consultant in Alan and Clark and I'm really looking forward to supporting you with your business case writing.
So my name is Regan Hopkins. I have been consulting in strategy transformation and change in Wellington for about 15 years. Primarily setting up transformations and PMOs, writing business cases and really was, I fell into it I suppose by chance and just through that experience found it really enjoyable because there's so many dimensions to it, so many aspects to business case writing and they're a challenge and it's a challenge manoeuvring your way through your organisation and around the politics and the people and stakeholders and they can be very complicated and very complex.
Better Business Cases were originally developed in the United Kingdom and in Wales and they were adopted in New Zealand in the early 2000s from memory and it's really become the standard best practise here in New Zealand. If you are going through a process to obtain new money for your organisation or there's a level of risk associated with your project well then a better business case is required. It doesn't always have to be a better business case.
There are many other forms of business cases out there which we'll talk a little bit about in a moment. So business case writing at Adelman Clark, we essentially have a three step process where step one is the project initiation where we will engage with the client. We will define the requirements, the tasks, the activities, the key people within the project and roles and responsibilities in undertaking the project.
We will be very clear about what the scope of the projects are, the benefits and establish the project management and importantly the governance of the project or the decision making group. It's critical that they are identified and they are across at the very early stages. We'll also look to establish the reporting processes and how frequently progress updates will be incurred.
So the key outputs of this stage is really establish the team, set the team up for success and we will go away and produce the project plan. The second stage in the process is developing of the business case components. So we'll engage initially in the strategic case once an investment logic map has been established where the key benefits have been identified and also what the problem statements are.
What are the opportunities in preparing the business case. In going through this process we will look to compile the components of each of the cases. So within the strategic case we will look to establish the strategic context, how it ties into the organisation priorities and governmental priorities as well and the broader benefits which we're going to work towards.
We'll establish a long set of options and we'll assess those options against an agreed assessment criteria. So the outcome sought from the development of the business case components really are your nuts and bolts. You've got your series of options that you're going to establish.
You're going to establish your project organisation and your governance arrangements and then you'll get into things like your risk analysis, your risk identification, you're quantifying and qualify your risks, risk allocation and risk mitigation. You look at your financial and economic analysis and really to determine the financial impacts of the government, the economic cost benefit analysis and how we're going to service the benefits which are going to come out of it. Once the shortlist has been established and we've assessed those options we will then come up with a preferred option.
But not only the preferred option, also an explanation as to why the other options have been dismissed. We'll look at the financial impact and the financial viability. We'll look at the economic impact and whether it's realistic that the benefits will be realised.
Through this stage we will establish the procurement process and the procurement strategy and we'll look to establish contractual arrangements after undertaking market sounding. The third step in our process is drafting and finalising the business case. So in this stage we will compile all the components of the other five cases into a format of which we will bring to a final draft.
The drafting aspect of the business case will be undertaken in a close collaboration working with the client, the stakeholders as required and as agreed and also working alongside Treasury throughout the process. We'll have gone through reviews, gateway reviews. We would have been working very closely with our Treasury analysts and it will be at the stage where it's able to be submitted to either the programme board the senior leadership team of your organisation and then through to Treasury.
And Alan and Clark are happy to be involved at any stage of this process attend the review meetings and support the organisation in obtaining a successful outcome. So what we have in front of us here is for illustrative purposes is an indicative timeline of how we would systematically go about the five cases in developing the business case. You'll see that we've got a period of time across the top in terms of months.
Some business cases, depending on the complexity of them after they've undertaken a risk profile assessment if it's deemed to be very high risk, if we're talking about multiple millions of dollars business cases can take a substantial period of time to complete. It can be five, six months plus. We always start off with the strategic case.
So you build up a strategic overview and then you look how does it actually feed into other strategies that the organisation are trying to achieve or is it government strategies that we need to hook into and we need to be able to tell that story about where the benefit is going to come from and how it's going to support the organisation and government strategy moving forward. It's a good idea at the very start of undertaking the business case you'll undertake what's called an investment logic map process which is an ILM. Many of you will be familiar with an ILM and they're designed and developed really over two facilitated workshops and I really recommend investing in a qualified ILM facilitator to take you through the process and for those that aren't overly familiar what you're really doing is articulating at the start what the problems are, the problem statements and of which there may be only three or four, potentially five real problems and then you describe and articulate in very clear and plain language what the problem is.
You then move on to your benefits and at this stage you're saying well here are our problems what would we like to see, what are the opportunities, the problems and opportunities what are the benefits that we're really wanting to achieve through this project, through this process and I've seen before that too often people try and articulate too many benefits but it's always good to have it concise and maybe limited to three or four and if you need to go more than four try and keep it to a minimum. I've pulled off an example of an ILM and this is for the project Let's Get Wellington Moving, some of you may be familiar with it and they've come up with three key problem statements so they've very simply said that slow and unpredictable bus travel times reduce the effectiveness of travel by bus inadequate provision for pedestrians along and across the Golden Mile reduces convenience of walking and the third problem that they've articulated is street layout limits the effectiveness of the Golden Mile as a place in which to spend time and move through so they've really anchored it on these three key problems and also opportunities that they're trying to address. On the completion of the project they would like to be able to realise benefits which is the inverse essentially of your problems and what their benefits are is saying that they'd like to have a faster, more reliable bus system is one benefit.
They've come up with some KPIs to measure against that. They're then saying that they'd like improved pedestrian safety is the second, improved pedestrian convenience is the third and increase amenity value and amenity in this context is the fewer spending time in that area, you are enjoying your amenity so they've really taken it through a very simple process to come up with their problems and what their key benefits are and these will remain unchanged throughout the process and time and time again throughout the process and once the business case is completed and the project is handed over to the organisation, benefits will live on because it may be some years before benefits are actually truly realised. So once an investment logic map has been established where you've articulated the problem statements and articulated the key benefits of the programme you then go and undertake a process to build the case for change and what's the strategic context of this business case how does it align to the goals and priorities of your organisation or the goals and priorities of the government at the time then we'll talk about what the investment objectives are for the business case and what the key risks are for achieving a successful outcome for this business case we will describe the benefits in more detail through the strategic case and also identify what the key constraints are and the dependencies halfway through the strategic case we will initiate the economic case where we identify and articulate a long list of options what are all the possibilities there's workshopping, imagineering and coming up with a very big range of all the possibilities some of them are going to be realistic, others are not so realistic and then we'll assess those against our investment objectives and see whether there is an alignment with them and shorten down the long list and then when you get to your short list of options you undertake an economic assessment against each of those are they viable, are they achievable and is there an appetite within the organisation is there desirability really the economic assessment of the short list of options is a systematic process to come up with a preferred option and really support you in being able to describe and explain why you have dismissed certain options within the short list and taken one over the others and it's very important to be able to do that as you go through the process and you have external reviews you go through gateways and you're working with treasury analysts they're going to challenge you through the process as to why you've selected this one versus why you haven't selected these options this preferred option is then used in the financial case and it's important to note that as a business case writer you're not and you don't have to be the expert in all of these things but you need to really understand the process of establishing the business case and taking it from end to end and ensuring that you're systematic and you follow a process and then you're working with the right people along the way when you come to the financial case many organisations have experts in finance they have chartered accountants and they are the people to work with and your role is to oversee this being compiled together so for me I prefer to use people who are specialists in this area I've done it in the past, I'm able to do it and we've been successful so you're really looking through the financial case we're looking at the financial cost model how is it going to be paid for and over what period of time what's the level of capital expenditure for this programme and also what is the level of operational expenditure and confirmation that you've got support to actually undertake the project quite often a deal breaker quite often have to become very creative in terms of how things can be paid for where the money is coming from whether it's going to be a viable option again once the financial case is completed that gets handed to the client and we incorporate their feedback once that's received we then move on to the commercial case the commercial case doesn't normally take as long as the other cases and it's very important to work with your procurement teams in your organisation and also to follow all the government guidelines when it comes to procurement so you need to define and develop your procurement strategy you'll undertake some market sounding to see what the options are out there what's available for whatever relates to your programme you'll develop the commercial aspect to any purchases that may take place and go through a process to find a preferred provider that meet the requirements of the initiative and engage then in the commercial arrangements and contracts and finally the management case which is dear to my heart having spent quite a lot of time in PMOs this is where you describe how it's going to happen how are you going to implement and stand up this initiative so you'll come up with a programme plan you'll articulate the risks and the issues you'll develop project plans for the work streams or the projects within your programme how are you going to manage benefits because benefits and benefit management becomes a bit of an industry of its own in managing and realising the benefits of which we're set out to achieve right from the start and as mentioned earlier this can go on for a period of years it's critical that somebody within an organisation relatively senior is identified as being the benefits owner and there are regular benefit management meetings that take place there is the assurance and risk there is contract management and of course post project evaluation I think it's important to just sort of call out that when we were thinking about undertaking a webinar it's quite different to a training programme and we don't see this as being a training programme we thought it was an opportunity to share what we see as being good practise and successful practise and maybe you might pick up a couple of tips or tricks in terms of what it is that you're encountering yourself ok so history shows that business cases for large projects have systematic errors how can business cases be prepared better to overcome these errors that's a good question and I think it really highlights the importance of independent reviews throughout the process and also the gateway process it's very important to have external assurance and a fresh set of eyes to look across the work that you've undertaken I always find it very important to find out who your treasury analysts are right from the start, have regular catch ups and meetings with them tell them what you're up to and describe why you're doing what it is you're doing and how you're doing it so when it comes time for a formal review nothing is going to be a surprise, nothing is going to be a secret humans are inherently biassed and just always have an awareness to this and the integrity is going to be in the words and the findings so trust the data, trust the information that you have and ensure that there is impartial neutrality to what it is that you're presenting and finally, trust the process don't get too caught up on the template the strength and assurance is in the process so how do we demonstrate the value of business case development it's important that senior leaders and governance are involved in the development of the business case right from the start you need to also involve multiple people many people throughout your organisation who feel that they're going to contribute to it and come from a broad range of backgrounds it's important that you get more senior staff across the process as well make sure that there's plenty of reviews and that risks are managed and that risks are also communicated up to senior management and governance they always like to hear all the good news but it's equally as important for them to hear the not so good news so that all risks are known and managed and mitigated and reported up to the decision makers so when a business case leads to a project being cancelled why is this looked at as being a failure that's actually a success of a business case what you've done is you've taken an organisation through a process and come up with an answer to say well actually this project isn't viable if we did go down this line the chances are highly likely that it won't succeed or it will fail so you've done the organisation some favours and treated it as a success because you've prevented them from spending a lot of money and time and energy into something which didn't stack up and there was no case for it to be taken forward so in this instance the business case process has supported the organisation what is a simple tip for improving a business case and is there one thing I can do to improve the business case well simply there are many things that you can do to improve the business case I don't think there's a silver bullet there's not one thing that you can do I think the cornerstones of a business case is really understanding your strategic drivers and understanding the economic impact and the benefits that you're trying to realise business cases really need to be sort of hung off the viability, achievability and the desirability of an organisation so if it's not there if you don't have the desirability of the senior leaders well then it's going to be quite a challenge to get it through the process another tip would be to just be conscious of the information sources that you are getting your information from people are inherently biassed and quite often the people who are telling you what the benefits are going to be are not always the same people who are going to be responsible for implementing those benefits don't be over formulaic in your process sure have a process and the process is very important but try and be a little bit flexible and agile and get creative involve many people in the process but be clear about what it is that you're engaging for and have purpose in behind what it is that you are doing whether you're holding workshops or interviews make sure that you leave with the right information that you are seeking but also work out whether you've got the right people in the room and the right information is being obtained through those interviews and workshops thank you for taking the time to watch the videos on business case writing here at Allen & Clark I hope some of the tips and tricks are going to be of some use to you in your work and their application always happy to take questions if there's anything out there that you may want support with or you have some questions don't hesitate to either give me a call or email ka kite anō, see you again
