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Better Business Case: Efficient decision making

This paper ‘Better Business Case: Efficient decision making‘ was presented at the 28th annual WasteMINZ conference in Wellington. By Chris Purchas, senior consultant, Tonkin + Taylor.

If you are involved in any type of public infrastructure development in New Zealand you have probably come across the Better Business Case framework advocated by the NZ Treasury. One of the leading proponents of this approach is the NZ Transport Agency with all programmes of work and individual projects working through the business case process.
Put simply, the business case approach starts with identification of the ‘problem’ to be addressed before identifying desired benefits and then, only then, considering potential solutions. This avoids the common trap of solutions seeking a problem to solve or options being considered without a clear understanding of the benefits that will be achieved.
Public infrastructure managers are using Better Business Case concepts and language for many of their investment decisions – to secure government funding and to ensure they are making the right decisions for infrastructure investments and renewal.
Much of my work involves considering options for infrastructure – waste collection, processing and / or disposal or other public infrastructure development / upgrade.
The business case approach provides a useful framework for determining the best way forward and proactively planning for success. Importantly, business case practitioners apply the framework in a fit for purpose way – targeting data collection and analysis on material issues to a level of detail appropriate for the issue being examined.
This is important in the context of the waste management sector because many of the funders of waste infrastructure are looking for Better Business Case assessments of potential projects. It makes sense to talk the right language.
The Better Business Case approach is structured around the proven five case model (see visual). This provides a disciplined, step-by-step approach that helps to ensure that each of the key aspects of a robust investment proposal is explicitly and systematically addressed as part of the business case development process.
The framework also encourages a robust, fit for purpose assessment of a proposed project – ensuring the early assessment sets the project up for long-term success. My full paper outlines the business case framework and comments on how this applies to our waste world.
At the simplest level the Better Business Case process involves:

  1. Defining a problem or opportunity and potential benefits;
  2. Identifying options for achieving the desired benefits;
  3. Evaluation of the identified options to increasing levels of detail; and
  4. Planning for successful implementation including proactive risk management.

As for any approach there is a real risk that Better Business Case is treated as a recipe rather than a way of thinking. For the waste sector projects vary in size and complexity, from multifaceted education programmes to major processing facilities or a long-term waste collection contract.
This means there is no recipe. Instead, we need to focus on defining problems or opportunities, setting out desired benefits and then completing robust analysis of options to position each project or programme for success.

This article was first published in the April 2017 issue of NZ Local Government Magazine.

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