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As part of the business case approach, it has been noted that more consistency is needed around project benefits and investment objectives, leading to benefit realisation and monitoring.

Benefits are set at the beginning of a business case, SMART investment objectives are defined, but this has to continue right through to monitoring after project completion to ensure that the benefits have been achieved.

There are significant gains from having a robust benefit realisation monitoring programme such as increased investor confidence and demonstration of public value. In some instances monitoring of an intervention can demonstrate greater value than has been previously estimated, in these cases we may be able to re-evaluate past proposals and evaluate if they do warrant investment based on revised estimates of the benefits.

Benefit realisation framework

A framework has been set to guide business cases [PDF, 112 KB] in how to ensure benefits are realised as required in each phase.

There is also an example project [PDF, 110 KB] to ensure understanding of the process. 

Important points to note

Investment objective formula

Take: [the effect of the problem] + [the wording of the benefit] + [the baseline/ estimated outcome from investment of the KPI] = SMART investment objective

(The outcome is not the investment objective. The outcome is ultimately the benefit in less detail.)

Consider working the customer into objectives rather than producing a ‘customer objective’

The Customer Experience and Behaviour team may be able to help with some sort of ‘customer satisfaction’ survey/objective if needed.

  • Consider your customer
  • Position the measure to customer 
    • Eg why are you seeking to achieve the benefit? 
    • Eg improved efficiency so the customer can get to school/ work on time, etc.

Trade-offs

Consider the rationale and reason for investment – benefit vs cost and what is the best outcome(s), direction, or option for the project.

Ensure the following are all set and covered off (SMART)

  • Benefit (statement)
  • Investment benefit
  • Measure / Description
  • Baseline
  • Estimated outcome from investment (target)

This is a reason for knowing percentage weighting of problems/ benefits is worthwhile and gives certainty of what the project is trying to achieve. This means that if trade-offs need to be considered, where appropriate, it can be tested against the outcomes and the appropriate objective can be ‘weighted higher’.

Performance measures

Performance measures don’t always have to come straight from the ‘performance measures’ table. Atypical measures are fine to use, as long as they are measureable (SMART) and have baseline data available.

Scale of monitoring

Scale of monitoring is important to take into consideration. For example, monitoring at a corridor level, rather than a project scale, can help to account for crash migration along an end to end trip, and helps account for the random nature of safety and some types of resilience events. This can make benefits monitoring particularly complex where a project has been developed in relative isolation from the rest of the network. System thinking in business case development, of benefits and objectives, will also help to mitigate this.

Timing of monitoring

Timing of monitoring and evaluation of project benefits is important. Good practice is to set the monitoring date at 3 and/or 5 years following construction rather than a long time after project completion. Increasing the time lapse between project completion and monitoring reduces attributability and certainty as external factors accumulate. Many factors can contribute towards this, including

  • Changes in transport policy
  • Land use changes
  • Changes in driver behaviour
  • Crashes have a long term downward trend (Economic evaluation manual 2016 section A6.5)
  • Changes in average daily traffic
  • Mode/vehicle composition changes
  • Population and other growth occurring at different rates and types to transport model assumptions

Benefit realisation process

Consider these points at each phase of the business case to ensure best practice in your project.

Point of entry

High level description/rationale of the problem or opportunity and the benefits the organisation can expect to gain from successfully addressing the issue. This may include identifying the primary class of outcomes being sought, ie safety, environment.

Strategic case

Agree the problems, opportunities and benefits of investment, identify and agree the strategic alignment of the benefits and complete ILM/benefit map. This can be done within an investment logic mapping workshop where relevant to the size of the business case. This may also lead to an indication of the KPIs to come from the project in some cases.

Programme business case

Confirm the benefits of investment identified in the strategic case and identify KPIs.

Develop SMART investment objectives, including measures and baseline data, at a programme level using any problems, benefits, measures and KPIs previously identified as a basis. Update the benefit map to reflect any changes and to account for evidence base findings.

Assess the preferred programme(s) against the objectives.

Create programme level (typically corridor level) monitoring plan based on investment objectives, KPIs and assessment of preferred programme(s). Align the expected results with monitoring timeframes, assign owners to measures and establish overlap with other related monitoring systems, eg activity management plans. Any minor improvements projects that arise from programme business cases are to be monitored separately as part of minor improvement project reporting.

Single stage / indicative / detailed business case

Where a project has gone from a strategic case to a single stage business case, there is a need to develop investment objectives and a monitoring plan that includes developing SMART investment objectives, including KPIs, measures and baseline data.

After confirming the investment objectives, assess the preferred option(s) against the investment objectives. This is typically done to a greater level of detail and at the more focused activity level than during a programme business case. 

Complete project benefit mapping to the activity level, which should create a clear line of sight between project problems, benefits, investment objectives, measures and KPIs.

Finalise the investment objectives and update the project monitoring plan to reflect any developments or improved evidence, using it as a base for completing the benefits realisation framework. Secure key stakeholder, project team and measure owner acceptance, as relevant (as part of the management case), then upload the completed benefits realisation framework to TIO.

If this is part of a wider programme business case, revisit the problems and benefits of the programme and determine the contribution made to the programme level investment objectives by the single stage or detailed business case. Document this in the monitoring plan. Update the programme business case if necessary to reflect benefit realisation.

Pre-implementation/ implementation

Document any scope changes or value engineering impact on outcomes.

Monitoring

Undergo monitoring, asset management plan reporting, NOC monitoring, post implementation reviews, etc as required. 

For further information contact designpracticesolutions@nzta.govt.nz.

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