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How to use the Business Case Approach

Because the Business Case Approach (BCA) has been designed to encourage fit-for-purpose effort, your path through the phases of the BCA will be different depending on the complexity and risk of your investment proposal.

  • If an investment is low complexity, low risk and low cost, then less work should be needed to complete a robust business case, as fewer options will need to be considered and there should be fewer risks to minimise.
  • If an investment is high complexity, high risk and high cost, then more business case phases will need to be worked through in more detail, to ensure a robust process.

Business Case Approach phases

Business Case Approach phases diagramClick for larger image [JPG, 207 KB]

A project’s business case is built progressively, and the work that needs to be done and the questions that need to be answered are gathered into phases. Not all projects will progress through all phases – applying fit-for-purpose effort will mean that sometimes phases can be skipped or combined, but the same investment decision questions will still need to be answered.

For example, you may find that the work that needs to be done in a particular BCA phase – the information that needs to be gathered and the questions that need to be answered – has already been done and can simply be incorporated or referenced. The amount of work that needs to be done should be fit for purpose relative to the complexity of the potential investment.

Based on past experience, the majority of investment proposals to the National Land Transport Fund (NLTF) are low to medium risk and complexity, and will likely be able to progress from the point of entry, to strategic case and then to a single-stage business case, as indicated in the diagram above.

There are investment decision gates along the way, where the problem owner and investor(s) assess the business case to consider whether the investment is worthwhile in relation to the desired outcome, and so whether or not to continue with the business case.

Find out more about effective and aligned business cases

Point of entry

The problem owner develops an initial view of the potential problem or opportunity, and reviews existing information so an informed decision can be made about whether there really is a problem that needs fixing, and, if so, what phase the business case should start at, and how it should progress through the BCA.

Find out more about point of entry

Strategic case

This phase is about defining and understanding the problem or opportunity, and showing there will be substantial enough benefits from doing something to justify investment. Workshops or other consultation will need to be undertaken to ensure agreement between stakeholders.

Find out more about the strategic case

Programme business case

This phase is about gathering new evidence and data to better understand the problem and its context, and identifying options and alternatives to address the problem. These could include a broad mix of activities that might be delivered by multiple parties over a period of time. Programme business cases are generally developed only for investments that have a higher risk and complexity, which could involve more than one transport mode or other interventions. It reduces risk and ensures all appropriate options are considered.

Find out more about the programme business case

Single-stage business case

The single-stage business case confirms and develops an activity, and details how it will be implemented. Because they are developed for each activity, one programme may have multiple single-stage business cases. It is a combination of the:

If the proposed investment is very high risk and complexity, you may choose to do a separate IBC before beginning a DBC.

Find out more about the single-stage business case

The investment decision questions your business case needs to answer

As you progress through the BCA, keep in mind the 16 investment decision questions that your business case needs to answer. These are the same questions that will also be used by decision makers to assess the strength of a completed strategic case, programme business case and single-stage business case (or indicative and detailed business case).

Read more about effective and aligned business cases

Roles and responsibilities

The roles and responsibilities of people involved in the Business Case Approach vary as the business case progresses through different phases. The main roles across the whole process are:

Problem owner – the person who has identified the business problem or opportunity, and who initiates the BCA.

Investors – are responsible for deciding whether to invest resources to address the problems identified. Investors may include the problem owner’s organisation, the NZ Transport Agency and any other co-investors.

Stakeholders – are the people who have the most knowledge of a subject and/or represent an interested or affected party, for example a local authority, community group or iwi. They will be consulted at various stages of the BCA.

NZ Transport Agency investment advisors – are available for support and guidance throughout the BCA process, and will need to approve the business case at each phase.

Workshop facilitators – are responsible for running the workshops that are usually required during the BCA process. Getting the right facilitator is beneficial in running an effective workshop, and it is worth considering hiring a professional.

Tools

Learning modules 

Online learning modules have been developed by the Transport Agency, and are available to our partner organisations. To request access to the modules, email nltp@nzta.govt.nz with your name, title, organisation and manager’s name.  

The introductory ‘Business Case Approach (BCA)’ course includes:

  • Business Case Approach (BCA) essentials
  • Business Case Approach (BCA) – the principles in action

Go to the Business Case Approach (BCA) learning modules (external link)

You will be prompted to enter your log in if you click the link above. Once you have logged in, you should be taken directly to the course. You can also find it by going to the catalogue and searching for ‘BCA’. 

Information sheets 

These information sheets are designed to accompany the training modules. 

Need BCA support? 

Use our contact form to send us a question, or get in touch with your NZ Transport Agency investment advisor. 

Go to the BCA contact form

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