Deep Dive - Infrastructure NSW · Web view2019/02/13 · The Strategic Business Case template, aligned with the NSW Treasury Business Case Guidelines (TPP 18-06), is specifically

DESIGNED FOR USE IN NSW GOVERNMENT CAPITAL PROJECTS

STRATEGIC BUSINESS CASE

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NOTES ON THE TEMPLATEGeneral CommentsThe Strategic Business Case template, aligned with the NSW Treasury Business Case Guidelines (TPP 18-06), is specifically designed to communicate the underlying information required to inform the decision to proceed to final business case.

The Strategic Business Case template forms part of a suite of documents to assist with the development of best practice business cases within NSW. Please ensure that this is the correct template to apply for your needs at this stage of the process.

The template is continually under development and will be improved over time. Check on the online business case portal before using this template to ensure that a more up-to-date version has not been developed.

The template should only be modified in conjunction with input from all relevant stakeholders.

Any reference to Practitioner’s Notes is subject to the following disclaimer: the views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any agency of the NSW government.

Structure of Template The template provides the document outline to provide the necessary information and analysis to support an investment decision and approval to proceed with the project. The document outline provides clear headings that should be followed in completing the development of a document.

Information is provided under each report section heading (in text boxes an example of which is presented below) that provides commentary and guidance for drafting purposes and should be deleted when no longer required.

Purpose:Outlining the information that is required to be presented as part of this section of the business case.

Supporting material: Reference to material that may support the delivery of this section of the business case including practitioner

notes and general table/figure templates etc.

Note: This section should be no more than XX page in length.To delete this guidance text box, right-mouse click within this box, select Delete Rows.

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DESIGNED FOR USE IN NSW GOVERNMENT CAPITAL PROJECTS Version 1: January 2019 1


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PURPOSE OF THE STRATEGIC BUSINESS CASE REPORT

Business cases are a critical element within the capital investment decision-making process for the NSW Government.

A business case is a documented proposal to meet the Government’s objectives that is used to inform an investment and/or policy decision. It contains analyses of the costs, benefits, risks and assumptions associated with various investment and policy options linked to policy or program outcomes and informs future implementation, monitoring and evaluation.

In practice, a business case is a management tool and a living document which is developed over time and reflects the priorities of investment stages – from determining there is a problem/need for investment through to refining the project options to final investment decision process.

Gate 0 Gate 1 Gate 2

Report requirements

INSW Gateway review process

Need/process Project Initiation Project shortlisting/refinement Investment Decision

Needs Confirmation Report Strategic Business Case Final Business Case**

Tiers 1, 2 & 3* Tiers 1 & 2* Tier 1INSW IIAF Project Tier

* Unless otherwise nominated for further reviews** Final Business Case is referred to in the Treasury Guidelines as the Detailed Business Case

The Strategic Business Case is the second component/deliverable within the NSW Government capital expenditure process as defined in the Infrastructure NSW Gateway review process (i.e. Gate 1 – Strategic Options) as highlighted in the red box above. All work undertaken and presented within this template should be undertaken in consideration of the NSW Treasury Business Case Guidelines (TPP18-06) and align with the Stage 1: Strategic Business Case.

The Strategic Business Case should provide decision makers with sufficient detail to make an initial determination on whether there is an underlying need of strategic value that requires a capital solution and an analysis that outlines which option is most suitable for further development.

It provides a preliminary justification for the program or project based on an initial assessment of business needs, strategic alignment and overall project benefit(s).

Furthermore, this document should provide an outline of the management processes in place to ensure that the agency has the processes, resources and funding available to take any subsequent project evaluations through the Final Business Case process.

The output of the Strategic Business Case is a clear understanding of the project option(s) that should be developed and analysed further through the Final Business Case process.

The document should explain as clearly as possible to the non-specialist: The problem – what is the service need and why is further capital expenditure required Why this problem is of strategic importance (i.e. alignment with Government objectives and/or policy) What options have been considered? What are the relative net benefits of each project option?



How much will each option cost? What are the risks to be considered for each option and how will the risks be managed? Stakeholders to be included when developing options further (i.e. Final Business Case) How will the department plan to take this project evaluation process forward?

The Infrastructure NSW Strategic Options Gateway Review (Gate 1) will assess: The options to determine if a robust solution can be developed through to Final Business Case. The delivery agency’s readiness to proceed to preparing the Final Business Case. If clear evidence is provided to support the service need. That a robust options analysis has been undertaken to address the service need on a value for money basis.

A Cost-Benefit Analysis is required for the options being considered. The Treasury’s NSW Government Business Case Guidelines (TPP18-06) and the NSW Government Guide to Cost-Benefit Analysis (TPP17-03) should guide the options analysis to define the benefits sought, risk management, impacts and affordability assessment.

Infrastructure NSW’s Gateway Workbook Gate 1 Strategic Options should be referred to throughout the development of the Strategic Business Case.



Strategic Business CaseDESIGNED FOR USE IN NSW GOVERNMENT CAPITAL PROJECTS

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[DRAFTING NOTE: ADD NAME OF NSW GOVERNMENT AGENCY HERE]

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Document Information

PositionProject Name:

Senior Responsible Officer:

Agency Head:

Delivery Agency:

Gateway Review Process: INSW Strategic Options Review (Gate 1)

Document Version Control

Project specific document history

Version Amendment Amendment Date Amended by

Supporting Documentation

Project-specific documentation (other than this report)

Version Title Amendment Date Amended by



CONTENTS1. Executive Summary....................................................................................................................... 82. Description of Problem, Service Need or Opportunity...............................................................92.1 Background...................................................................................................................................... 92.2 Description of Problem, Service Need or Opportunity.....................................................................92.3 Existing Level of Service................................................................................................................102.4 Consequences of Deferral.............................................................................................................10

3. Policy and Strategic Alignment..................................................................................................123.1 Policy Context................................................................................................................................ 123.2 Principles, Objectives and Critical Success Factors......................................................................123.3 Project Alignment with Principles, Objectives and Critical Success Factors..................................13

4. Project Options............................................................................................................................ 154.1 Description of Proposed Project....................................................................................................154.2 Related Projects and Decisions.....................................................................................................154.3 Impact and Integration with other Government Assets and Services.............................................164.4 Disruption Management.................................................................................................................16

5. Cost Inputs................................................................................................................................... 185.1 Cost Planning, Contingency and Management..............................................................................185.2 Commercial Off-set........................................................................................................................ 185.3 Ongoing Maintenance, Operating and Service Costs....................................................................19

6. Strategic Assessment of Options..............................................................................................206.1 Planning Assumptions................................................................................................................... 206.2 Strategic Demand Assessment......................................................................................................206.3 Stage 1 Cost Benefit Analysis........................................................................................................216.4 Value Management........................................................................................................................ 216.5 Financial Appraisal........................................................................................................................ 226.6 Financial Impact Statement...........................................................................................................226.7 Short List of Options......................................................................................................................23

7. Project Management.................................................................................................................... 247.1 Asset Ownership and Governance................................................................................................247.2 Stakeholder Management Plan......................................................................................................257.3 Project Risk Management..............................................................................................................257.4 Procurement and Delivery Strategy...............................................................................................26

8. Project Planning.......................................................................................................................... 288.1 Funding Strategy........................................................................................................................... 288.2 Actions to Progress to Final Business Case..................................................................................288.3 Stakeholder Endorsement.............................................................................................................298.4 Decision to Proceed.......................................................................................................................29



1. EXECUTIVE SUMMARY

Purpose:Cover all high-level issues that would be presented in an Executive Director’s briefing. Clear, succinct summary of the service delivery requirement to be addressed. Project objectives and alignment with government, departmental, and program strategic directions. Project status including options to be explored further in next phase. Commercial off-set opportunities to be explored further in the next phase. Next steps in progressing project.

If it is written well, the Executive Summary can be used as the main source of briefing material.

The approach would benefit from a more detailed description of why the project is needed including policy drivers, project objectives and the concepts behind the project. At this stage of a project, one couldn't be confident that the project can delivered as stated. Risks should be covered in more detail and the next steps should be more explicit as to what is required in the next phase.

Supporting material: Practitioner Notes: Strategic business case

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2. DESCRIPTION OF PROBLEM, SERVICE NEED OR OPPORTUNITY

2.1 Background

Purpose:This section is to inform the reader with important background or historical information that outlines the process and direction that has been undertaken by government to date and the purpose of this document.

Supporting material: TPP18-06 NSW Government Business Case Guidelines Section 5 Step 8 Practitioner Notes: First principles approach to problem definition

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2.2 Description of Problem, Service Need or Opportunity

Purpose:This section is to describe the service needs, opportunity or requirement relevant to what the government is required to address and the reason for government intervention. It should highlight what the underlying problem is based on the current status of the asset/service (supply) and the current and future nature of customer/constituents needs (demand). This should be a succinct definition of the problem in which all future work on the project will be based.

The focus should be on government’s service delivery requirements, priorities, commitments and outcomes rather than focusing on the outputs, activities or solutions. This section should clearly answer the questions "Why is this project needed?" and “what is the direct outcome(s) of this project?” and/or what are the risks arising from the intervention?

For example: The service requirement is to provide 24-hour access to secondary level emergency department services for patients within the primary catchment area of the ABC Hospital.

Rather than: The service requirement is for a new 20 cubicle purpose built state-of-the-art emergency department as directed by the Minister.

Generally, this will include key points on: Underlying drivers of service need Future demand of service need (i.e. demographic trends, utilisation, access) Current and future customer needs and base/desirable levels of service Service deficiencies Service model Operational or organisational efficiency Maintenance and operations Capacity of asset to sustain service delivery Risks including what may impact the delivery of the project/government intervention and how these may be

mitigated.

Summarise the section with a tabular presentation of the services to be provided within the development. Try to convey a sense of volume, scope and complexity.

Check that services needs are consistent with policy objectives and scope of project.



Supporting material: T TPP18-06 NSW Government Business Case Guidelines Section 4.2 Steps 1, 2 and 8 Practitioner Notes: First principles approach to problem definition Practitioner Notes: Alignment of business case outcomes to Government policy

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2.3 Existing Level of Service

Purpose:Some projects will benefit from a brief description of the conditions and limitations under which services are currently provided from.

It is important to note that this section is both current and forward looking in nature to take into account the likely impact on the asset/service with projected future demand levels.

The section will be particularly useful where the project involves relocation, rebuilding or refurbishing existing facilities.

Where existing conditions are well described in supporting documentation (e.g. condition surveys) it may be sufficient to quote the major finding and reference the report in the Appendices.

Where not relevant (i.e. greenfield development project) this section can be omitted.

Supporting material: Practitioner Notes: First principles approach to problem definition


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2.4 Consequences of Deferral

Purpose:This section should highlight the risks that exist or would emerge in the future if the project does not proceed or is deferred.

For example, within a transport context the deferral of a project would most likely relate to increased levels of congestion, accidents and/or additional operational related costs.

This section should summarise the ‘base case’ under this heading, including the expenditure that would be needed ‘no matter what’ so that operations could continue as they are (i.e. do minimum investment scenario).

Supporting material: Practitioner Notes: Modelling

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3. POLICY AND STRATEGIC ALIGNMENT

3.1 Policy Context

Purpose:The policy context should briefly demonstrate how the proposal strategically aligns with the key policy directions, government priorities/outcomes and documents relevant to the project. Consider: State government (State outcomes, Financial statements, Cabinet endorsed strategies, Cabinet or ERC

decisions) Departmental (Departmental Plan, Published Departmental Strategies, Divisional funding strategies or

programs. Check for policy documents in other departments, divisions, regions or local bodies that might impact or interface with the project’s scope)

Regional (Consider policy decisions in related areas that may impact on project, particularly if recently funded) Agency (Consider current agency strategic planning) Federal Government

Identify any related projects that might need consideration within the project (i.e. a proceeding announcement of the project and/or other projects that shift demand/need onto this project).

All documents should refer to: INSW State Infrastructure Strategy Department of Planning – Sydney Metropolitan Plan Greater Sydney Commission – Strategy and district plans Future Transport 2056 strategy

Supporting material: TPP18-06 NSW Government Business Case Guidelines Section 4.2 Step 3 Practitioner Notes: Alignment of business case outcomes to Government policy


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3.2 Principles, Objectives and Critical Success Factors

Purpose:This section should summarise the primary project objectives, KPIs and principles of the project and how these will be managed going forward. Principles drive the actions in which the stakeholders will develop the project Objectives should outline the desired outcomes of the project KPI should outline the measurable benefits that the project will provide to the wider community.

The objectives will be used extensively throughout the project – including briefings, summary documents, budget papers and communications – It is difficult to justify and support a project without clear objectives, so it is of great value to have these agreed at this early point of the project.

The principles and objectives should be: Focused on the key messages for the project Provide clear principles as to how the Department will manage and deliver this project Clearly state what the Department will achieve from the project Be short, precise, measurable and free of jargon



Be able to be used to judge the success of the project Be able to be used as evaluation criteria for the project options to be assessed through this process.

This section could include in addition, statements of Vision, commitment, partnership or other less tangible objectives that will contribute to the project’s success.

Supporting material: Practitioner Notes: Scoping a business case


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3.3 Project Alignment with Principles, Objectives and Critical Success Factors

Purpose:The purpose of this section is to document how the project objectives fit with or contribute to strategic objectives of the government, department, program or agency.

The strategic objectives will probably be identified within the policy directions identified within section 3.1.

It is important to have a critical view point of the alignment, and to provide quantitative measures if they are available.

The section should also detail and/or cross reference links with other capital plans. Particularly important is ranking on the strategy lists, Asset planning lists and Departmental/Divisional/Regional/Agency priorities.

The Strategic Objectives should be aligned to: Departmental Statements of Objectives INSW State Infrastructure Strategy State Outcomes.

The KPIs and benefits identified in 3.2 should be aligned to State Programs and Program KPIs.

An example of the table form output that could be included within this section of the report is presented below:a. Align project objectives to state outcomes and other government priorities

Project objective Relevant state outcome/s

Relevant State outcome indicator/s

Other Government priorities, regulations or policies

12

b. Align project benefits and KPIs to State Programs and Program KPIs

Project objective Project benefit Relevant program Relevant program KPI12

Supporting material: Practitioner Notes: Alignment of business case outcomes to Government policy


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4. PROJECT OPTIONS

4.1 Description of Proposed Project

Purpose:This section should document the solutions that have been considered for further evaluation. It is important to demonstrate that all feasible options have been identified and considered and provide a logical argument for pursuing or discarding the option.

This section should provide a detailed account of each of the options including the engineering and design works that have been undertaken to date.

The solutions must include, but not be limited to: Base Case – what are the consequences and issues related to not proceeding with any action and continuing

on a path of business as usual. Do the minimum – what is the smallest/least intrusive amount of work that would have to be undertaken to

bring the service up to standards for the following 5 to 10 years. Non-asset solutions – what options are open to progress the project objectives with minor or no capital

investment. There should be enough detail to confirm that all feasible options have been considered and there are sound reasons for not pursuing the option further. Examples of non-asset solutions might include: ceasing to provide the service, providing the service from an alternative location, changing the service model to suit the current conditions, substitution of services, contracting out services.

Potential solutions achievable within a constrained budgetary environment. Any non-budgetary constrained optimal customer service solution(s)

Within this section the author should take into consideration and a brief description (within that of the description of the project) of the foreseeable benefits and/or risks associated with each option.

Supporting material: TPP18-06 NSW Government Business Case Guidelines Section 5 Step 9 Practitioner Notes: First principles approach to developing and defining options Practitioner Notes: Options identification process

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4.2 Related Projects and Decisions

Purpose:This section should outline all inter-related government decisions and projects that are proposed and/or being progressed that would have a material impact on the operation and benefits associated with this project.

An example would be the development of an east coast high speed rail network and a proposed airport expansion

This section should express: The relationship between the projects The extent that the decisions will impact each project What work has been undertaken by the project team to ensure consistency of analysis and determine whether

the decisions/projects can co-exist and if applicable amplify the benefits How the investment decision of related projects can be coordinated to ensure an efficient and optimal decision

by government.



Supporting material: N/A

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4.3 Impact and Integration with other Government Assets and Services

Purpose:This section must detail the impact of the new assets on all existing government assets and services.

Provide details of other works or projects in proximity or otherwise related to the proposed project which do not constitute part of the proposed scope of works. This may include works related to the project or other projects which fall near or adjoin the proposed project.

Supporting material: Practitioner Notes: Integrated land-use and transport planning – place-based Practitioner Notes: Land use and transport demand impacts


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4.4 Disruption Management

Purpose:This section should outline all feasible impacts to current government assets, services and the wider community (including but not limited to, local businesses, residents and sensitive user groups) as a result of the construction of the proposed project.

This section should reference both the risk and stakeholder analysis to determine what are the major risks and their impact on specific groups, with particular reference to direct financial impacts that are foreseeable to local businesses through the construction period and the risks associated with failing to deliver the project to program.

This section should also present the relevant stakeholder communication and construction management strategies that will be in place to reduce the cost of disruption through the construction phase of the project, including: Phasing project construction Time of day of operations Site management Provision of access and other related services Temporary assistance/mitigation works/services Compensation if required

At the Strategic Business Case phase all analysis should be undertaken based on desktop research and relevant government information and IP.

Reference should be made within the cost analysis for provision of compensation and associated contingencies if applicable.





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5. COST INPUTS

5.1 Cost Planning, Contingency and Management

Purpose:Outlining the information that is required to be presented as part of this section of the business case.

The applicant should report the total cost of their proposals and outline how they arrived at their cost estimates. It should be clear what works the cost estimate includes, how it was derived, and whether any contingency and inflation have been included.

The build-up of costs will usually be done by a suitably qualified cost estimator although cost estimates may use actual quotes. The cost build-up should include: Base cost rates Quantities Contractor margins Project management margins Contingency Direct financial costs to government as a result of disruption.

Applicants should report capital costs in two ways: On non-escalated basis (i.e. without inflation) to inform the cost benefit assessment On a nominal basis (i.e. with inflation) to inform funding and affordability assessment.

The assumed inflation rate(s) and its basis should be reported with all cost estimates should be exclusive of GST.

Supporting material: TPP17-03 NSW Government Guide to Cost-Benefit Analysis Practitioner Notes: Costings


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5.2 Commercial Off-set

Purpose:This section should document potential opportunities to offset the cost of the project with returns from urban development activity. It is important to demonstrate that the requirements to achieve State outcomes are documented and understood. Commercial and planning risks should be documented including market-dependent and time-dependent risks.



Supporting material: INSW Business Requirements Specification


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5.3 Ongoing Maintenance, Operating and Service Costs

Purpose:To inform the value for money and affordability assessment over the life of the service, applicants should disclose all ongoing costs associated with their proposal. These ongoing costs may include: Operating costs Maintenance costs Repair costs Asset renewal and replacement costs.

In some instances, the proposal may realise cost savings or revenues. These cashflows should be identified separately to allow an assessment of the net change in costs over the life of the proposal.

Supporting material: Practitioner Notes: Costings Practitioner Notes: Asset management


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6. STRATEGIC ASSESSMENT OF OPTIONS

6.1 Planning Assumptions

Purpose:This section should provide a confirmation statement that the supporting analysis are based on the agreed Common Planning Assumptions as at [insert date]. Common Planning Assumptions are used across agencies to ensure alignment and understanding of the relevant data, policies and assumptions to underpin planning decisions and policy analysis for government strategies and investment decisions. This supports consistency in the advice provided to Government and the community.

The Common Planning Assumptions represent a consistent baseline, or a starting point, and are developed based on current and past trends and agreed policies and plans. They are not targets or scenarios.

Example of the confirmation statement (short version):

The [proposal/plan/strategy] and supporting analysis are based on the agreed Common Planning Assumptions as at [insert date]. Details of the Common Planning Assumptions used are set out in [relevant attachment(s)], and the additional data and assumptions used, including deviations from the Common Planning Assumptions, are set out in [relevant attachment(s)].



Supporting material: Practitioner Notes: Common Planning Assumptions


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6.2 Strategic Demand Assessment

Purpose:This section should present an assessment of the number of persons and metrics that are anticipated to directly change as a result of the project.

For example, a transport project will include vehicle numbers, hours travelled, and vehicle kilometres travelled.

It is important to note what form of demand analysis was undertaken, the underlying assumptions, where the information was sourced and what guidelines were applied.

Supporting material: Practitioner Notes: Land use and transport demand impacts Practitioner Notes: Integrated land use and transport planning – place-base


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6.3 Stage 1 Cost Benefit Analysis

Purpose:This section should present an economic cost benefit analysis to determine whether a proposal will deliver value for money. Cost benefit analysis seeks to assess the economic, social and environmental benefits and costs over the lifetime of the service. In doing so, cost benefit analysis goes beyond just considering the direct effects, financial effects or effects on one party, to considering all impacts on the wellbeing of the State of NSW.

It involves a systematic approach to assessing the gains and losses of a proposal, emphasising to the maximum extent possible, the monetary value of these gains and losses. It assists decision makers in: Identifying options that deliver net benefits (i.e. BCR and NPV) Allowing different options to be compared Ensuring that all impacts on all parties are considered (i.e. scenario and sensitivity analysis) Valuing costs and benefits incurred or accrued at different points in time.

The Stage 1 CBA is applied to the Long List of options generated above which includes the same steps and principles as the full CBA but may be conducted using preliminary information on costs, benefits and risks.

Supporting material: TPP18-06 NSW Government Business Case Guidelines Section 5 Step 10 TPP17-03 NSW Government Guide to Cost-Benefit Analysis Practitioner Notes: Economic evaluation




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6.4 Value Management

Purpose:This section can include other forms of analysis to determine the economic and wider social, environmental and community benefits of each of the proposed options.

Non-quantitative forms of economic analysis that could be incorporated within a strategic business case including, multi criteria analysis and cost comparison analysis.

Forms of impacts that could be incorporated within this analysis could include but not limited to: Number of persons positively and negatively affected Number of sensitive user groups impacted Quantity of benefits to different user groups Land and property related impacts Measurable environmental and emission impacts.

Supporting material: Practitioner Notes: Value management and value engineering


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6.5 Financial Appraisal

Purpose:In this section, applicants are requested to evaluate the financial and budget impact of the options from the applicant’s perspective. Its focus is on whether the projected revenues will cover the whole-of-life costs of the proposal.

For most proposals, the following cashflow projections are sufficient: Revenue or cost savings Capital expenditure Ongoing operating and maintenance expenditure Renewals or major repairs.

The Department will need to assess whether the applicant has the means to continue operating and maintaining the asset after the investment is made. In these instances, applicants should provide projected revenue estimates or outline proposed funding arrangements.

The input assumptions in the financial appraisal should be consistent with the data provided for the cost benefit analysis e.g. anticipated usage of new swimming pool.

The Financial Appraisal should be conducted on the Long List of options developed above.



Supporting material: TPP18-06 NSW Government Business Case Guidelines Section 5 Step 11 Practitioner Notes: Financial analysis


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6.6 Financial Impact Statement

Purpose:From the financial analysis highlight the net impact expenditure to the NSW Government.

A Financial Impact Statement (FIS) should be prepared and submitted for all longlisted options requiring budget funding as part of the Strategic Business Case.

The purpose of the Financial Impact Statement is to provide a view of how each option will impact key financial measures in the future on both the entity’s budget and the Whole of Government (WoG) budget. The FIS should include estimates of: expenditure required to meet the projected level of demand, while optimising efficiency revenue (if applicable) based on the approved forward budget capital expenditure funding sources, including appropriations impact on key financial metrics.

The FIS should also address projected budget growth, efficiency gains, revenue from compensable activity and other sources of income, and/or internal redistributions.

Supporting material: TPP18-06 NSW Government Business Case Guidelines Section 5 Step 12 Practitioner Notes: Financial analysis


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6.7 Short List of Options

Purpose:Following the cost benefit analysis (CBA), financial appraisal and financial impact statement analysis, a short list of options should be selected based on indicators such as Benefit Cost Ratio and Net Present Value (NPV) from the CBA and NPV and Profitability Index from the financial appraisal. The shortlist of options should always include the base case.

Other factors for consideration when shortlisting proposed projects might include: achievability supplier capacity and capability reputational risks environmental impacts qualitative factors, including their importance and the reasons they could not be quantified



how the options meet the objectives of the business case and contribute to State Outcomes.

Supporting material: TPP18-06 NSW Government Business Case Guidelines Section 5 page 35.


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7. PROJECT MANAGEMENT

7.1 Asset Ownership and Governance

Purpose:The governance arrangements should address: Who owns the proposal? Who is responsible for the proposal outcomes? Who is responsible for approving key decisions? Who will manage the proposal? How it will be resourced? Who is responsible for monitoring the costs, benefits and risks?

Applicants should demonstrate that the nominated personnel have the relevant experience and skills to deliver and manage the proposal. These personnel may change as the proposal transitions from planning to delivery and then to operations.

Governance arrangements should also include detail on what team and processes are in place to control and manage the proposal. The team should be of sufficient size to deliver as well as manage the proposal. The role of each individual in the team should be well defined with clear lines of reporting and delegations.

Typical project roles are outlined as follows but may vary based on the size and complexity of a project. For smaller proposals, some of these roles may not be required: Project Sponsor: Holds ultimate responsibility for the outcomes of the proposal. Project Manager: Is responsible for the delivery of the project and management of the project team. Project Team: Is responsible for developing and delivering the proposal. May contain a mix of specialist skills

made up of internal and external resources. Steering Committee: Provides senior management oversight of the proposal and advice on critical issues.

Generally, such a committee is in place for complex proposal and/or where multiple stakeholders have a major interest in the proposal.

Central Agency Assistance: Depending on the size and complexity of the proposal, the applicant may need assistance from other agencies such as the Department of Premier & Cabinet, Infrastructure NSW and Treasury.

While this is usually included as part of the Final Business Case once a preferred option is decided, this section may be included as part of the Strategic Business Case for larger projects where governance arrangements can be planned prior to deciding the preferred option.

Supporting material: TPP18-06 NSW Government Business Case Guidelines Section 6 Steps 22 and 23 Practitioner Notes: Asset management




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7.2 Stakeholder Management Plan

Purpose:The following overview identifies key stakeholders, issues for each stakeholder (including potential stakeholder interests, objectives, conflicts and opportunities for synergies) and the action planned to resolve conflicts or maximise opportunities.

At this phase of the analysis it is important to first focus on government related stakeholders that should be incorporated into the project development, planning and implementation.

The following factors should be taken into consideration: How have stakeholders (including end users and the community) been identified and their likely areas of

interest captured and addressed? What engagement has been undertaken with key stakeholders in the development of the options and is this

appropriate? How has intra- and inter-agency consultation resulted in the identification of opportunities to enhance the

outcomes of the options considered? How have the views of stakeholders been incorporated into, and informed of, the selection of the preferred

option(s) to take through to Final Business Case? How will engagement with stakeholders be undertaken in the development of the Final Business Case? How is the stakeholder engagement plan for the development of the Final Business Case resourced and

reflected in the project’s current or future governance structure? What are the stakeholder issues that may prevent the project from maximising benefits and optimising cost,

and how will these be addressed through the Final Business Case? How has the market engagement and community stakeholder activity been coordinated with other relevant

projects to mitigate communications/stakeholder fatigue as the project progresses?

Supporting material: Practitioner Notes: Stakeholder consultation


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7.3 Project Risk Management

Purpose:This section documents how the risks were identified and assessed and how they will be managed throughout the proposal lifecycle. The purpose of this section is three-fold: To alert decision makers to any risks in the project that might be material to the decision making at this point,

or need to be resolved prior to a later decision. Confirm to decision makers that a thorough process has evaluated all risks relevant to the stage of the project. To ensure that a program of work is in place to address the major risks identified.

The following factors should be taken into consideration in the completion of a risk analysis and management plan within the Strategic Business Case phase:



What has been the formal risk management approach in-place for the development of the options? What formal risk management approach will be adopted for the development of the Final Business Case? What evidence demonstrates the list of the project’s key risks is appropriate to the stage of the project,

complete and robust? How have the key project risks influenced the options development, analysis and evaluation? How have the specific risks for each option been developed and assessed within the context of selecting the

preferred option(s) and realising the benefits of the project?

The identification of risks may be undertaken as a desktop exercise for a relatively straightforward proposal. For a more complex proposal, key risks may need to be determined through workshops and stakeholder interviews.

For larger, more complex projects, this section might include a risk management plan and/ or risk register. The major project risks identified to date include: Scope Construction Financing Planning and approvals Legal Property acquisitions Utility relocation and adjustments Procurement Project management Stakeholder and communication Change management Sustainability (social, economic and environmental impacts).

Ideally, the risk register will tie in with the proposal’s schedule (in terms of time contingency) and the proposal’s cost estimates (in terms of cost contingency). Planned mitigations and monitoring activities will need to be embedded in the proposal’s scope and governance/management arrangements.

This section documents how the risks were identified and assessed and how they will be managed throughout the proposal lifecycle.

Note that while this section is usually included as part of the Final Business Case once a preferred option is decided, this section may be included as part of the Strategic Business Case for larger, complex projects. The level of detail included will depend on the size and complexity of the project.

Supporting material: TPP18-06 NSW Government Business Case Guidelines Section 6 Step 26 Practitioner Notes: Risk analysis: Role and key areas of focus through the business case process TPP15-03 Internal Audit and Risk Management Policy TPP12-03b Risk Management toolkit for the NSW Public Sector Volume 1 – Guidelines for Agencies

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7.4 Procurement and Delivery Strategy

Purpose:The delivery strategy is a necessary input to the development of both the program and cashflow for the project through the development and delivery phases.



The delivery strategy will be informed by and must be compatible with any project constraints such as committed milestones and available funding profiles.

It is important to consider the effects of the delivery strategy on the project development and delivery as decisions made at each Gateway will establish the pathway for the project and are difficult to change without risking significant time and cost impacts on the project.

The Strategic Business Case is generally prepared at the end of the Strategic investigation phase. By this stage in the project development you would normally have a strategic design/s and estimate.

The key considerations for a Delivery Strategy at this stage are: Understanding the project constraints such as the available funding profiles and any existing commitments on

timing and milestones. Understanding the available procurement models including the key steps and timing of each activity and

including these in your project program. Understanding the key project risks and consider how they will be best addressed by the proposed

procurement model as each model has benefits and challenges. Seek input from the Delivery Phase project managers in your organisation as they will be able to provide

current advice on the expected timeframes and processes for the various procurement models. Document the delivery strategy in the Project Management Plan. Select the procurement model that best addresses the above. It is noted that the model may need to be

modified as the project further develops. Commitments, funding and risk profiles are all subject to change.

Note that while this this section is usually included as part of the Final Business Case once a preferred option is decided, this section may be included as part of the Strategic Business Case for larger, complex projects. As the preferred option has not been decided at this stage, the analysis should be limited to the delivery strategy for the broader project. More detailed analysis on the preferred option will be undertaken in the Final Business Case.

Supporting material: TPP18-06 NSW Government Business Case Guidelines Section 6 Steps 19, 21 & 22 NSW Public Private Partnerships Guidelines (TPP17-07) NSW Government Procurement Policy Framework (July 2015) Practitioners Note: Delivery Strategy

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8. PROJECT PLANNING

Purpose:This section of the report should outline the means in which the Department, in conjunction with other relevant stakeholders, will continue the development of the project through Strategic and Final Business Cases to a final government investment decision.

This section is solely focused on the planning phase of the project and not that of delivery.

This section is important to ensure that the Department establishes a best practice approach to the development of this analysis to be undertaken in the most efficient and effective means possible.



Supporting material: Practitioners Notes: Factors to consider when scoping a business case to reduce delivery risk Practitioner Notes: Strategic business case Practitioner Notes: Final business case and Government investment – role of FBC and how to leverage

learnings from SBC and other projects

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8.1 Funding Strategy

Purpose:Indicate what funding has been assigned to the delivery of future business cases for this project and where the project sits in the Department budget, Asset Management Plan and Multi-Year Strategy.

Supporting material: Practitioner Notes: Funding analysis


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8.2 Actions to Progress to Final Business Case

Purpose:Detail the actions required to progress the Problem Definition Assessment to the Strategic and Final Business Case phases, including but not limited to: Engineering design Cost and risk analysis Demand and land use assessments Market analysis and delivery Economic and financial analysis Project management Timeline to delivery Project brief.

Supporting material: TPP18-06 NSW Government Business Case Guidelines Sections 6.1 and 6.2 Practitioner Notes: Strategic business case Practitioner Notes: Final business case and Government investment – role of FBC and how to leverage

learnings from SBC and other projects


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8.3 Stakeholder Endorsement

Purpose:Identify outcome owners and indicate support for the proposal to proceed.

Supporting material: Stakeholder endorsement sheet Practitioner Notes: Stakeholder consultation Practitioner Notes: Stakeholder management

Note: This section should be no more than two to three sentences in length, or presented in a table, with an endorsement sheet.

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8.4 Decision to Proceed

Purpose:Indicate the agency, role position, steering committee or governance body that will make the decision to proceed to strategic options analysis.


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Documents

Deep Dive - Infrastructure NSW · Web view2019/02/13 · The Strategic Business Case template, aligned with the NSW Treasury Business Case Guidelines (TPP 18-06), is specifically