A key principle of the Business Case Approach (BCA) is fit-for-purpose effort. This is fundamental when selecting the pathway for developing your business case, that is, the level of effort depends on its complexity, risk, uncertainty and cost.
In practical terms, that means that proposals with low to medium complexity, risk, uncertainty and cost will likely progress straight from the activity management plan (AMP) or a programme business case (PBC) to a single-stage business case (SSBC), or even implementation.
The SSBC is a phase that has a high degree of flexibility so it can be structured to suit the problem owner’s specific situation. Careful contemplation of ‘right-sizing the effort’ has real advantages, for example:
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The following criteria must be met in order to use the SSBC lite:
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Watch the video below to see how activities identified in a previous phase of the BCA can be advanced.
The following diagram shows some potential paths for business case development.
SSBCs, and indicative business cases (IBCs) and detailed business cases (DBCs) are sometimes called activity-level businesses cases, because they focus on the details of an activity.
Activities indicated in a previous phase of business case development will need to be developed further to demonstrate that:
At the end of the strategic case or PBC phase, you need to think through the levels of effort and detail involved in the investment proposal in terms of cost, risk and complexity to determine whether:
An SSBC may also be appropriate for an individual activity that has been identified:
Note that it is anticipated that the majority of business cases will be able to be developed through to implementation in a single stage. However, in some instances it is expected a business case will need to be progressed as separate IBC and DBC phases, for example because:
You can use the BCA Q&A tool to guide your critical thinking about the phase of the BCA you should progress to next.
The table below summarises the requirements for each phase.
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Low–medium risk and/or complexity proposals |
High risk and/or high complexity proposals |
Summary of requirements |
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Single-stage business case |
The purpose of the indicative business case (IBC) is to provide decision makers with early indication of the preferred option (activity level) by:
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Investment decision gate |
Required for high risk and/or high complexity activities. Optional for SSBC, for example, if the problem owner wishes to use the Investment Assessment Framework (IAF) to check alignment with the Government Policy Statement on Land Transport (GPS) and receive an investment signal from Waka Kotahi. |
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The purpose of the DBC is to confirm the preferred option through more detailed analysis of the costs, risks and benefits by:
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Waka Kotahi expects that, where risk levels show it is appropriate, most activities seeking National Land Transport Programme (NLTP) investment will follow the single-stage business case path, which applies the principle of fit-for-purpose effort to help keep development times and costs to a minimum. In these cases, a single NLTP funding decision will be made by Waka Kotahi to enable the activity level business case to be developed up to (but excluding) the implementation phase.
Although this is referred to as a single-stage business case, it effectively includes the same broad requirements that would typically be carried out as part of an IBC and a DBC (summarised above). However, in an SSBC, there is no formal NLTP funding decision requirement following identification of a preferred option.
Although funding for an SSBC will include work up to (but excluding) the implementation phase, a hold point will normally be required at the end of shortlisting. This is to enable the problem owner to check with Waka Kotahi, before further costs are incurred in developing detailed analysis of the preferred option(s), that:
In this sense, the hold point is being used as a tool to manage investment risk.
The hold point will not require an application via the Transport Investment Online (TIO) system, although Waka Kotahi may request specific information to accompany the proposal. Essentially, this information will need to address the requirements shown in the indicative business case section of the table above, and should be guided by the 16 business case assessment questions.
As a guide, use the ‘What does a good indicative business case include?’ document to ensure you have included the information required at the hold point.
Read ‘What does a good indicative business case include?’ [DOCX, 65 KB]
In some cases, for example where high levels of risk or complexity are associated with the activity, either the problem owner or Waka Kotahi may require a further investment decision before releasing funding to develop the DBC. This will normally be once options have been shortlisted and a preferred option (including a do-minimum option) has been identified at the end of the IBC.
In such cases, Waka Kotahi will have made an initial funding decision to cover the work needed to develop the IBC, but the decision regarding further release of funding to complete the DBC phase will be subject to the problem owner demonstrating that:
Think about how you will present your business case to investors, demonstrating that you have built the case for investment progressively. You need to tell the investment story in a clear, logical and compelling way so that investors understand the cause and consequence of the problem or opportunity, the benefits of addressing it, how alternatives and options have been evaluated and why the preferred option has been selected.
Find out more about the SSBC [DOCX, 1.2 MB]
Note that this is for guidance only, and should be adapted as necessary.
Online learning modules have been developed by Waka Kotahi, 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 ‘Activity-level business cases’ course covers single-stage, indicative and detailed business cases.
Go to the activity-level business cases learning module(external link)
To open the course, click the link above and then click ‘enrol’. You will be prompted to enter your log in. 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 ‘activity-level business cases’.
This information sheet is designed to accompany the learning module.
Other relevant information sheets:
![View larger image [JPG, 264 KB]](/assets/planning/business-case-approach/img/business-case-pathway-diagram.jpg){kind=link}