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A key element of the NZ Transport Agency’s Business Case Approach (BCA) is the use of informed discussions to ensure that the rationale for a potential investment is adequately understood.

One technique is investment logic mapping (ILM), which is included in the New Zealand Treasury’s guidelines for public sector business cases. ILM ensures ‘… that robust discussion and thinking is done up-front, resulting in a sound problem definition, before solutions are identified and before any investment decision is made.’ (NZ Treasury)

ILMs typically involve two facilitated workshops: 

  • a problem and consequences workshop
  • an outcomes and benefits workshop.

An investment logic map is developed through this informed discussion; its purpose is to communicate the investment story on a single page, using plain language.

Read more about ILM on The Treasury website(external link)

Why use an ILM?

Using ILM ensures the rationale for a proposed investment makes sense and is based on sound evidence.

While following the ILM process is not compulsory, it is highly recommended, particularly for complex, high-risk or multi-party proposals.

Even if you’re not using a formal ILM process, the format and technique provides an effective way of defining problems and benefits, and creating buy-in and consensus.

Relationship management

The relationship management capability is particularly important here. ILM is largely about getting alignment on the likely problems and benefits and testing the rationale for potential investment with key stakeholders.

Find out more about engagement and relationship management

BCA principles and behaviours

fit-for-purpose effortILM should incorporate the BCA principles and behaviours: investing for benefits, fit-for-purpose effort, clarity of intent, gathering information through informed discussion, and building the case for investment progressively.

Workshops or discussions should be fit for purpose. That is, they should match the level of effort anticipated to explore the potential investment.

Find out more about the BCA principles, behaviours and capabilities

What questions need to be answered?

Problem definition 

  • Is it clear what the problem is that needs to be addressed (both the cause and the consequence)?
  • Is there evidence to confirm the cause and consequence of the problem?
  • Does the problem need to be addressed at this time?
  • Is the problem specific to this investment (or should a broader perspective be taken)?

Benefits definition

  • Have the benefits that will result from fixing the problem been adequately defined?
  • Are the benefits of high value to the organisation(s), furthering its/their objectives?
  • Will the key performance indicators (KPIs) that have been specified provide reasonable evidence that the benefits have been delivered?
  • Are the KPIs both measurable and totally attributable to this investment?

These are the first eight questions of the 16 business case assessment questions that a completed business case needs to answer.

Find out more about the business case assessment questions
Read an information sheet about critical thinking and the importance of asking questions [PDF, 112 KB]

Who should be there?

It is important to get the right people in the room; only schedule workshops when you know those people are available. Problem owners, investors and stakeholders all need to participate fully in the workshop discussions.

Review the participants who have been identified in the point of entry discussions.

Key responsibilities

Problem owners

Problem owner can be a joint responsibility. They:

  • initiate the ILM workshop and provide enough information for participants to gather generic evidence
  • identify the stakeholders to be engaged
  • identify the available evidence to help determine the scale of the cause and consequence of the problem(s) identified
  • make the decision not to proceed further if the scale of the problem(s) determined is not significant.

Investors

Investors need to:

  • understand the case for change, including:
    • the scale of the problems, the trade-off between potential benefits and risks and where these sit in the wider strategic context
    • whether the investment is sufficiently aligned with the investors’ organisational goals and objectives
  • be accountable for decisions on whether to invest resources to address the problems identified and progress further through the BCA.

Each co-investor needs to understand why the problems need addressing and what outcomes they are ‘buying’. Recognising each other’s decision pathways and understanding the interdependencies are critical.

Investors’ representatives should have sufficient authority/delegation to confirm the necessary investment for the next phase, or signal the proposal’s viability through their interest in proceeding beyond the strategic case.

Key stakeholders

Stakeholders selected will have the most information on the topic and be significantly impacted by or able to influence the problem. They:

  • often represent members or constituents who use the transport system, such as the Road Transport Association or the Automobile Association, and have a responsibility to participate by sharing their knowledge and insight on behalf of their organisation and/or members
  • often hold senior roles and can contribute to identifying and understanding the problems and benefits at a strategic level, and can help define the problem statements, challenge the investor and contribute supporting evidence
  • are likely to have specific knowledge or interests that are worth sharing in the development of a strategic case and programme business case.

Where stakeholders are involved because of their knowledge of a subject area, they are expected to support informed discussions with evidence-based views of the problem.

Think about the context of the problem or opportunity when selecting stakeholder participants. A strategic issue could require a different set of participants than a more activity-related/operational problem.

Stakeholders can influence decisions throughout the process but are not the decision makers.

Facilitator

The facilitator:

  • has a dual role of extracting the best investment story from the participants and challenging the logic behind what participants say, particularly around the problems
  • needs to tell the investment story in a way that maximises the value to the organisation using plain English and simple concepts
  • helps create buy-in and consensus from all the participants at the workshop
  • supports clarification of benefits and draft indicators that provide the best evidence that the benefits sought have been delivered
  • typically runs workshops throughout all phases the business case approach.

Accredited ILM facilitators are recommended for complex multi-party issues.

View a list of accredited ILM facilitators on the the State of Victoria Department of Treasury and Finance website(external link)

Tip

Problem owners should ensure that facilitators have read this Transport Agency guidance when they are engaged and before the workshops. They should also be fully briefed about the topic, especially if there is likely to be disagreement among participants.

Observers

Project managers, business analysts or technical advisors may be invited to workshops to listen to the group discussion. They generally remain silent, but may provide technical clarification of evidence, as necessary.

What preparation is required?

How much preparation participants do is up to them, but they should come to an ILM ready to take part in discussions and offer their opinion and expertise. While it is not expected that new work is done in the lead up to the workshops, participants are expected to have given some thought to the potential problem or opportunity and bring any relevant existing work or data they have. That may involve canvassing others in their team or organisation before they come to the workshop.

What happens at the problem definition workshop?

Five to eight (with a maximum of 12) participants are ideal for the problem definition (investment logic mapping) workshop.

Problem owners set the scene and introduce what has led to the workshop and what they think the problem(s) might be. (They also need to be prepared to accept that the process may identify a different problem.) The identified problem (or opportunity) is explored through answering the questions above (see ‘What questions need to be answered’), from which problem statements (generally no more than four to five) are developed and presented in an investment logic map.

Download the investment logic map template [PPTX, 56 KB]

Each problem statement:

  • should capture the cause of the problem or opportunity and the consequence of addressing it
  • must be supported by agreement that the problem/opportunity exists and that there is evidence of a correlation between the problem/opportunity and the consequence – the link between cause and consequence is critical
  • should be compelling
  • is ranked with a percentage, demonstrating what is considered to be the largest problem (with all the percentages adding up to 100%). If any statement has a weighting of less than 10%, you need to consider if it really is a problem

For more information about defining problems and benefits, and developing problem statements:

What happens at the benefits definition workshop?

The benefits workshop usually happens one week after the problem definition workshop. Four to five participants (plus the facilitator and observers) is ideal. There should be some continuity from the previous workshops with problem owners and investors, but a change in other participants is usual.

Participants review the previously developed problem/ILM map to ensure that:

  • the problems are well articulated
  • the group still agrees that these are the right problems
  • the expected benefits are discussed and understood.

They then explore the benefits of addressing the problems by determining:

  • the value that the potential investment will provide to the organisation or its customers
  • one or two supporting KPIs that demonstrate the investment’s specific contribution to the identified benefit
  • an obvious connection between the benefits and outcomes in the context of their local impact.

KPIs are internal to your organisation, but it may be helpful to use the relevant Transport Agency performance measures to identify and develop your KPIs. These may be developed after the workshop.

View the Transport Agency’s list of investment performance measures

It is important that the potential investment benefits of addressing the problem are able to be measured and assessed to demonstrate the best possible programme development and activity/option selection, which in turn provide value to the organisation or its customers.

It is also important to be able to evaluate the success of addressing the problems or opportunities once an investment has been implemented.

The problems and benefits are then mapped on a benefits map.

Download the benefits map template [PPTX, 65 KB]

What happens after the workshops?

After the workshops have been held, the facilitator will typically:

  • create a plain-English story that summarises the workshop discussion
  • prepare updated versions of the ILM/problem definition and benefits maps
  • email version(s) directly to participants, asking for feedback
  • include observations of strengths and weaknesses in the email and, if possible, also include the list of issues.

When they have received participant feedback, the facilitator will, as relevant:

  • finalise the ILM/problem definition and establish next steps, for example a benefits definition workshop
  • finalise all the discussion and the ILM/problem definition and benefits maps within 48 hours of the final workshop.

The maps form a key input into developing a strategic case. If the result of the workshops is a decision to proceed to a strategic case, it should progress promptly.

What are the outputs?

The main outputs from problems and benefits definition workshops are simple, single-page flowcharts that tell the story of a possible investment and expose its underpinning logic. They are the start of the conversation about whether it is necessary to invest time and money into looking into the problems or opportunities for potential investment.

A map format is not always necessary, but the problems, opportunities and benefits must be clearly articulated however they are presented.

Tools and templates

Templates

Tools

Information sheets

These information sheets are designed to accompany learning modules about the strategic case.

Find out more about BCA online training

Other relevant information sheets:

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