Better Business Cases Guide to Developing the Strategic Assessment 28 February 2014
Acknowledgements This document was created using material provided by Her Majesty s (HM) Treasury in the United Kingdom, the Welsh Government (Llywodraeth Cymru) and the State of Victoria Department of Treasury and Finance. Accordingly, ownership of any copyright in the information contained in this document belongs to the original copyright owners. Other than as provided by the applicable copyright laws in each jurisdiction, permission to copy, distribute, adapt or otherwise use the information contained in this document, must be sought from the original copyright owner. The New Zealand Treasury wishes to acknowledge that the following documents were used and adapted for the purpose of creating this guidance: The Five Case Model is the best practice standard recommended by the HM Treasury for the preparation of business cases. Refer to Making Sense of Public Sector investments (2001) by Courtney A Smith and Joe Flanagan, the Green Book at www.gov.uk/government/publications/the-green-book-appraisal-and-evaluation-in-centralgovernment, and Delivering Public Value from Spending Proposals: Green Book Guidance on Public Sector Business Cases using the Five Case Model at wales.gov.uk/funding/wiipindex/5cmodel/?lang=en. The State of Victoria Department of Treasury and Finance Investment Management Standard provides a set of tools, including the Investment Logic Map (ILM) adopted in this guidance. Refer to www.dtf.vic.gov.au/investmentmanagement. This material is reproduced with permission and that copyright belongs to the State of Victoria. The State of Victoria is released from any liability associated with the subsequent use of the intellectual property associated with the material. The New Zealand Treasury also wishes to acknowledge the assistance of the following agencies who contributed to the preparation of this guidance material: Internal Affairs, Department of Labour, Housing New Zealand Corporation, Inland Revenue, Ministry of Economic Development, Ministry of Education, Ministry of Health, New Zealand Defence Force, State Services Commission and the Tertiary Education Commission. Crown Copyright This work is licensed under the Creative Commons Attribution 3.0 New Zealand licence. In essence, you are free to copy, distribute and adapt the work, as long as you attribute the work to the Crown and abide by the other licence terms. To view a copy of this licence, visit http://creativecommons.org/licenses/by/3.0/nz/. Please note that no departmental or governmental emblem, logo or Coat of Arms may be used in any way which infringes any provision of the Flags, Emblems, and Names Protection Act 1981. Attribution to the Crown should be in written form and not by reproduction of any such emblem, logo or Coat of Arms. ISBN 978-0-478-42125-5 (Online) The URL for this document on the Treasury s National Infrastructure Unit website at February 2014 is http://www.infrastructure.govt.nz/publications/betterbusinesscases The Persistent URL for this document is http://purl.oclc.org/nzt/g-bbco
Contents About this Guidance... 2 What this Guidance is not... 2 Questions and Feedback... 2 Further information... 2 The Strategic Assessment... 3 Purpose of the Strategic Assessment... 3 When should a Strategic Assessment be Developed?... 4 How to Develop the Strategic Assessment?... 7 Outlining the Strategic Context... 8 Organisational overview... 8 Alignment to existing strategies... 9 Confirming the Need for Investment... 9 Key Investment Drivers... 10 Using a Facilitated Workshop Approach... 10 Investment Logic Mapping Tool... 11 Next Steps... 12 References... 13 Appendix One: Reviewer Questions... 14 Appendix Two: Stakeholder Analysis... 15 Better Business Cases: Guide to Developing the Strategic Assessment 1
About this Guidance This guidance is intended to assist developers and reviewers to build better business cases using the Five Case Model, the New Zealand Government s accepted good practice standard. This guidance document provides an overview of how to develop a Strategic Assessment. This document has been written as part of the suite of Better Business Case guidance. It is part of a comprehensive and structured tool-kit of guides and templates to assist you at every stage of the business case development. This guidance can assist you whether you are considering an investment in change at the portfolio, programme or project level in either the wider Public or the private sectors. This guidance also provides a useful reference for business managers, project or programme managers, and other stakeholders who can either influence investment decisions or have an interest in the successful delivery of change. The guidance outlined in this document applies until this document is updated or replaced. What this Guidance is not This guidance is not intended to comprehensively cover all the related aspects of business case development. These may include regulatory impact, economic assessment, procurement, risk management, Public Private Partnership (PPP), Treaty, programme/project management or assurance processes. You should refer to any relevant policies, rules, expectations and practices that apply to your specific organisation or sector. Questions and Feedback General enquiries about the information contained in this guidance, not addressed in this guidance, can be directed to betterbusinesscases@treasury.govt.nz. For Government agencies, any agency-specific questions should be addressed to your Treasury Vote team. Any comments as to how we could improve this guidance can be directed to guidance@treasury.govt.nz. Further information This document is part of the Better Business Cases suite of guidance available at the Treasury National Infrastructure Unit website http://www.infrastructure.govt.nz/publications/betterbusinesscases 2 Better Business Cases: Guide to Developing the Strategic Assessment
The Strategic Assessment The Strategic Assessment outlines the initial justification for the need to invest in change and is used to support a recommendation to proceed to further business case development. This guidance is intended to assist investors, senior responsible owners, workshop facilitators and business case developers to prepare the Strategic Assessment as part of applying the Better Business Cases process. Purpose of the Strategic Assessment The Strategic Assessment is intended to provide stakeholders with a high degree of confidence that the investment they are considering aligns with the organisation s strategic priorities and responds to a true business need. Stakeholders can consider the rationale for a proposed investment at an early stage, and determine if the proposal warrants the development of a business case. Alternatively, it can provide the documentary basis for avoiding further wasted analytical effort (a fast fail test). The key purposes of the Strategic Assessment are to: identify the strategic context and fit of the proposed investment (either at programme or project level) outline the case for change and consider the need for investment provide an early opportunity for the organisation and key stakeholders to influence the direction and structure of the proposed programme or project, and avoid too much effort being put into developing proposals that should not proceed to the development of a business case. The key questions that are answered as part of the Strategic Assessment are: 1 How does the proposal further the objectives of the organisation and fit within the wider strategic context in which the organisation operates? Who are the main stakeholders and do we have their support? What are the drivers that are causing the organisation to consider an investment in change? 1 Refer to Appendix One of this guide for a more detailed set of reviewer questions. Better Business Cases: Guide to Developing the Strategic Assessment 3
When should a Strategic Assessment be Developed? The Strategic Assessment is the first significant deliverable of the strategic case of the Better Business Cases process. The Better Business Cases process develops five cases that provide assurance that an investment proposal: is supported by a compelling case for change, the strategic case optimises value for money, the economic case is commercially viable, the commercial case is financially affordable, the financial case, and is achievable, the management case. Better Business Cases is designed to ensure that there are no surprises and that the analytical effort is fit for purpose. These two goals are achieved by adopting a staged approval process with appropriate business case deliverables that support the decisions sought. This ensures early engagement with decision-makers and means development effort is not wasted on options that can be ruled out early. The Strategic Assessment is the first key deliverable of a staged approval process for either a programme or project, as outlined in figures 1 and 2 below. Figure 1: Overview of a staged Better Business Cases process for developing a Programme Business Case Initiate proposal (Programme) Strategic Assessment Risk Profile Assessment Stakeholder assessment Scoping Document Outline fit with strategy and need to invest Assurance requirements Decision to proceed Programme Business Case Scoping Document Make case for change Determine preferred programme and project mix Assurance requirements Programme Delivery 4 Better Business Cases: Guide to Developing the Strategic Assessment
Figure 2: Overview of a two-stage Better Business Cases process (for a sample project, either stand alone or as a consequence of a Programme Business Case decision). Initiate proposal (Project) Strategic Assessment Decision to proceed Indicative Business Case Decision to assess short list Detailed Business Case Decision to invest Implementation Business Case Decision to sign contract Risk Profile Assessment Stakeholder assessment Scoping Document Outline fit with strategy and need to invest Assurance requirements Scoping Document Make case for change Explore the preferred way forward and short list options Assurance requirements Scoping Document Determine preferred solution Plan for delivery Assurance requirements Scoping Document Confirm best value for money supplier offer Prepare for delivery Assurance requirements Prior to commencing work on the development of the Strategic Assessment, the process to be followed and the amount of analytical effort needed to meet the expectations of decisionmakers should be agreed. Typically this requires a discussion with the appropriate monitoring agency or review team and is documented in the relevant Scoping Document. 2 Senior responsible owners of significant proposals in the State sector should ensure the relevant Treasury vote team (or monitoring agency) officials are fully engaged in developing and agreeing the Scoping Document. Single stage process A simpler, fit-for-purpose single stage business case development process may be used for investment proposals that are assessed as lower risk and small scale. For a single stage process, the Indicative and Detailed business case content requirements are combined into a Single Stage Business Case, with a lower level of analytical effort required to meet decisionmaker expectations. 3 For certain investment decisions that are subject to lower levels of delegated authority, that are of very small scale and/or very low risk, the use of a Single Stage (Light) Business Case may be agreed as being fit for purpose. This could include compressing the three deliverables above into a single business case deliverable. In this case a separate Strategic Assessment process may not be required. 4 2 3 4 The Scoping Document facilitates discussion and agreement between the senior responsible owner and the reviewer on how the Better Business Cases process is applied. The aim is to align the expectations of both parties to be fit for purpose for the risk and scale of the proposal. The Scoping Document templates for each business case deliverable are available at http://www.infrastructure.govt.nz/publications/betterbusinesscases/guidance Refer to the relevant Better Business Cases Guide to Developing the Single Stage Business Case at http://www.infrastructure.govt.nz/publications/betterbusinesscases/guidance Refer to the Single Stage (Light) Business Case template available at http://www.infrastructure.govt.nz/publications/betterbusinesscases/guidance Better Business Cases: Guide to Developing the Strategic Assessment 5
Agreement on the process to be applied should be negotiated with the monitoring agency or review team and documented in the relevant Scoping Document. Gateway review Gateway is an assurance methodology for major investments. It is a review process that examines programmes and projects at key decision points in their lifecycle to provide assurance that they can progress successfully to the next stage. Gateway is Cabinet mandated for high risk capital projects in government departments and Crown Agents, irrespective of scale or funding source. Agencies determine if their projects are high risk by completing the Risk Profile Assessment. The Gateway Unit determines whether a project or programme is high risk, based on its assessment of the initial Risk Profile Assessment provided by the agency, and other factors. 5 If the capital proposal is subject to Gateway review, the draft Strategic Assessment will assist to inform the Gate 0 (Strategic Assessment) review. Feedback from the review is incorporated into the document prior to final sign-off. Regulatory Impact Analysis requirements In addition to the requirements of this Better Business Cases guidance, certain proposals may also require a Regulatory Impact Statement to be completed. The Regulatory Impact Analysis (RIA) requirements apply to any policy initiative or review that ultimately: considers options that would involve creating, amending or repealing legislation (either primary legislation or disallowable instruments for the purposes of the Legislation Act 2012), and is expected to result in a paper being submitted to Cabinet for approval. 6 5 6 For guidance material, the Risk Profile Assessment spread-sheet and contact details, refer to the Gateway Review website at http://www.ssc.govt.nz/gateway For more detail on the Regulatory Impact Analysis requirements, refer to the guidance at http://www.treasury.govt.nz/publications/guidance/regulatory/impactanalysis 6 Better Business Cases: Guide to Developing the Strategic Assessment
How to Develop the Strategic Assessment? A typical process for developing the Strategic Assessment for either a potential project or programme is as follows: 1. Initiate the investment proposal and appoint the Senior Responsible Owner to take the leadership role in engaging stakeholders, arranging workshops and developing the Strategic Assessment documentation. 2. Complete the Risk Profile Assessment (RPA) 7 to determine the risk profile of the investment proposal and to inform the level of effort and analysis likely to be required. 3. If required, submit the completed RPA to the Gateway Unit for assessment and to arrange a Gate 0 (Strategic Assessment) review. 4. Identify key stakeholders, analyse their interest and influence and complete a stakeholder management plan 8. This will inform the choice of attendees for the initial stakeholder workshops required to identify investment drivers. 5. Draft the Scoping Document 9 and arrange a meeting with the business case reviewer (or monitoring team) to agree the process, the level effort and any additional assurance requirements (including Gateway review, regulatory impact analysis, any functional agency lead reviews and independent quality assurance). 6. Describe the proposal and draft the strategic context 10. Use this as the basis for briefing workshop attendees. 7. Arrange facilitated workshops with key stakeholders to identify and agree investment drivers (problems/ opportunities). 8. Finalise the workshop outputs and draft the Strategic Assessment document. 9. Present the final draft Strategic Assessment (and any supporting documentation required) for review, including Gateway review panel where required. Incorporate feedback. 10. Finalise the Strategic Assessment, seek final sign-off from the sponsor and submit for approval to proceed to further business case development. The above process may vary depending on the nature of the organisation, the decision being sought and the expectations agreed in the Scoping Document. 7 8 9 The Risk Profile Assessment (RPA) is a self-assessment tool that provides an indicative risk rating for the investment proposal. The RPA spread-sheet, guidance material and contact details are available at the Gateway Review website at http://www.ssc.govt.nz/gateway Refer to Appendix Two of this guide for stakeholder analysis tools. The Scoping Document template is available at http://www.infrastructure.govt.nz/publications/betterbusinesscases/guidance 10 The Strategic Assessment template is available at http://www.infrastructure.govt.nz/publications/betterbusinesscases/guidance Better Business Cases: Guide to Developing the Strategic Assessment 7
Outlining the Strategic Context The strategic context provides an overview of the sponsoring organisation and the outcomes that the organisation is seeking to achieve or contribute to through its operations 11. It also demonstrates alignment of the proposed investment with wider national or sectoral priorities and goals, policy decisions, other multi-agency programmes (if relevant) and linkages with organisational business strategies. A brief summary is expected at this stage. More detail is required when this strategic context is revisited as part of confirming the case for change as part of a subsequent Programme, Indicative or Single Stage business case. Organisational overview Provide a brief profile of the organisation, together with a statement of what it is seeking to achieve and evidence of the nature and level of resources currently at its disposal. The key areas of focus include: What are the main outcomes, impacts and objectives that the organisation is trying to achieve and why? What is the nature and scope of the organisations activities and services (outputs), key stakeholders and customers (including the public)? Is the investment proposal consistent with core activities? What resources are available to the organisation, including existing financial and funding arrangements, organisational structure and staffing, and how does it intend to manage this capability over time? What is the current environment in which the organisation operates, including how it intends to respond to changes and possible risks? This summary should consider external drivers for considering the investment proposal. It is expected that much of this information will be available in existing strategic planning documents, including the latest Statement of Intent (where relevant), annual reports and other reporting to stakeholders. Any recent and significant changes should be noted. The expectation is that a brief summary is provided rather than repeating the content of readily available documents. 11 An organisation can be a single agency or it can encompass multiple agencies, business units or groups of people structured and managed to meet a need or to achieve common goals. 8 Better Business Cases: Guide to Developing the Strategic Assessment
Alignment to existing strategies Explain how the proposed investment fits within, supports and promotes the agreed strategy and work programme of which the proposal is an integral part. Key areas of focus include: Is the investment proposal aligned with all relevant strategies? Is there a good strategic fit with wider organisational, sectoral, regional, and Government strategies? Is there a good strategic fit with other projects or programmes planned or underway? All relevant strategies should be referenced including those at international (if any), national, sectoral, regional and local levels. Alignment of the investment proposal with Government priorities and policy decisions should be demonstrated, where these are relevant. Where an investment proposal is intended to contribute to shared outcomes across multiple organisations, or where expected outcomes contribute to other related projects or programmes, these linkages and inter-dependencies should be clearly demonstrated. Summarise how the investment proposal will help to achieve the business goals, strategic aims and plans of the organisation? The proposed investment should contribute to, and be consistent with strategic business planning. Highlight the high level policy aims and business goals of the organisation, which can then be used as the basis for considering the need for investment. Confirming the Need for Investment Having demonstrated the strategic context for the investment proposal, the next step is to determine if there is a compelling need to invest in change. If there is no compelling rationale or evidence of the need for the investment, then the proposal should not proceed further to the development of a business case. If the benefits of investing are unlikely to be significant in relation to the scale of the proposed investment, again the proposal should not be considered further. This part of the Strategic Assessment seeks to answer the following questions: What are the key drivers for considering an investment in change? Are the potential gains of successful change likely to be worthwhile? A key aspect is that drivers are not always problems to be fixed, but can also be opportunities for change that can provide significant outcomes compared to the status quo. Undertaking a project or programme to deliver successful change should result in improved outcomes for the organisation, users and/or the wider society. The resulting net benefits to stakeholders (as there are likely to be both winners and losers) from investing in change should be significant enough to warrant the costs and risks of investing 12. Early estimates of the costs and risks of not investing should be considered, and should be supported by available evidence. 12 Note that an organisation may choose to invest to achieve desirable economic, social or environmental outcomes for society, even if it does not benefit directly from the change. Better Business Cases: Guide to Developing the Strategic Assessment 9
The Strategic Assessment should demonstrate: Whether or not the investment proposal a good idea, and strong evidence of support from management and other key stakeholders. Key Investment Drivers An investment driver is a rationale for changing some aspect of the organisation or what it does. The proposed change can be: vision-led - because the organisation wants to change direction emergent - because the organisation needs to improve its performance, and/or compliance-based - because the organisation has to change to maintain service delivery or comply with regulatory requirements. Drivers for change can be statements of problems or opportunities for change. They can result from changing political priorities or regulatory requirements, new technologies and work practices, increasing competition, changing trends for the demand for goods and services or limited access to resources or inputs. Drivers for change can be both external and internal. External drivers can arise from existing or expected opportunities or threats. Sources can be political, economic, social/demographic, technological, legislative, environmental or commercial. Internal drivers may be strengths or weaknesses, both existing or expected. Strengths provide opportunities for leverage. Weaknesses may have to be addressed. Further analysis is needed to describe the nature, cause, size and effect of the identified problems, opportunities or issues. The root causes should be identified and evidenced. the focus should be on the key underlying issues, not just the presenting symptoms. Using a Facilitated Workshop Approach A facilitated workshop process is recommended for engaging early with key stakeholders to identify and agree the investment drivers and to develop a shared view of the need for investment. The objective is to provide clarity, challenge and consensus. A facilitated workshop process can enable: early engagement with key stakeholders and encourages them to be active participants in the decision-making process participants to think about and agree the investment drivers, rather than focussing on detailed solutions too early, and the development of a collective agreement and shared understanding of the need for the investment. 10 Better Business Cases: Guide to Developing the Strategic Assessment
These initial facilitated workshops are more effective if: an experienced and expert facilitator is employed to help extract the investment story the sponsor (investor) attends as a key participant to provide direction and shape the proposal a focussed group (say 12 or less) of key stakeholders with authority to act are invited the duration of the workshop is limited (say to two hours) to both obtain commitment from senior people and enable a focussed and strategic discussion, and a structured process is used that helps to ensure a successful outcome. The use of the first two Investment Logic Mapping (problems and benefits) workshops is mandatory for those State Sector capital expenditure, lease and asset disposal proposals that require Cabinet approval under the terms of Cabinet Office circular CO(10)2 13. An accredited ILM facilitator must be engaged to run the workshops and develop the outputs for large scale, high risk proposals. 14 Alternative workshop tools have been successfully applied for certain investment proposals, particularly those involving vision-led or transformational change or where the ILM approach is not fit for purpose given the scale or effort required. 15 The appropriate workshop approach should be agreed as part of finalising the Scoping Document. Investment Logic Mapping Tool The Victoria Department of Treasury and Finance Investment Management Standard (2013) provides a series of workshop based tools to aid the development of the investment story into separate, logical components. 16 The investment logic mapping (ILM) approach can help to provide a clear understanding of why an investment is being considered. One of the useful outputs of the ILM workshops is a graphic representation of the relationship between the problems, and the benefits that are expected if the problems are successfully addressed. 13 Refer to Cabinet Office circular CO(10)2 Capital Asset Management in Departments and Crown Entities: Expectations at http://www.dpmc.govt.nz/cabinet/circulars/co10/2 14 There are a limited number of accredited ILM facilitators in New Zealand, although expert, nonaccredited facilitators can be used for proposals that are not both high risk and large scale. Refer to the list of NZ accredited facilitators at http://www.dtf.vic.gov.au/investment-planning-and- Evaluation/Investment-professionals-toolkit/Book-an-investment-management-standard-facilitator 15 Other strategy tools that may be useful in stakeholder workshops to identify and agree investment drivers include PESTLE(C), SWOT analysis, Porters Five Forces (refer to http://www.mindtools.com/index.html) and Results-based Accountability (refer to http://www.familyservices.govt.nz/working-with-us/programmes-services/connected-services/ngocapacity-building/results-based-accountability.html ). 16 Department of Treasury and Finance (Victoria, 2010), Investment Management Standard, edition 5, published 2013, available at the Victorian Department of Treasury and Finance website at http://www.dtf.vic.gov.au/investment-planning-and-evaluation/understanding-investment-planningand-review/guide-to-the-investment-planning-process Better Business Cases: Guide to Developing the Strategic Assessment 11
This Investment Logic Map is developed in a series of two-hour workshops with key stakeholders, including the investor and senior responsible owner. These workshops enable stakeholders to identify the need for a potential investment and validate that the potential investment aligns with key organisational outcomes. Questions answered are i) what is the problem and ii) what benefits does any investment need to deliver? For both projects and programmes, the second workshop validates and confirms the problem definitions identified as part of the initial ILM discussion. This second workshop focuses on identifying and agreeing the key, high-level benefits and key performance indicators (KPIs). KPIs help us to measure if we have been successful in delivering change. The KPI analysis is not essential at this early stage, and may be undertaken as part of the later business case development. For programmes, the ILM process is slightly different. The standard workshop process produces an Investment Logic Map, a Benefits Summary (rather than a detailed benefits analysis), and an Investment Prioritisation Document, all contained within a Service Logic and Investment Prioritisation (SLIP) document. For both programmes and projects, the Strategic Assessment should focus on identifying key problems and potential benefits only, not the subsequent ILM strategic responses or solutions. This can help to prevent stakeholders focussing on solutions too early, potentially inhibiting the later identification and analysis of a wider range of potential options as part of any later, more fully analysed, Programme, Indicative or Single Stage business cases. Next Steps Once stakeholders have formed a shared view of the need for investment and the workshop outputs are agreed, the Strategic Assessment can be drafted. If the Strategic Assessment is subject to Gateway review, the final draft Strategic Assessment (and any supporting documentation required) should be submitted to the Gateway review panel for a Gate 0 (Strategic Assessment) review. Where review recommendations are actioned, these changes should be incorporated into the final Strategic Assessment and supporting documentation. The final stage of the development process is to seek approval to proceed (or not) to further business case development of the investment proposal. Decision-makers can use the Strategic Assessment to help consider the rationale for a proposed investment and determine if it warrants the development of a business case. Alternatively, it can support a decision to not proceed and to avoid further wasted effort. The decision-making process should be fit for purpose and should have been agreed as part of finalising the Scoping Document. 12 Better Business Cases: Guide to Developing the Strategic Assessment
References Department of Prime Minister and Cabinet (2001), Cabinet Office Circular CO(10)2, Capital Asset Management in Departments and Crown Entities: Expectations, available at the Cabinet Office website at http://www.dpmc.govt.nz/cabinet/circulars/co10/2 Department of Treasury and Finance (Victoria), Investment Management Standard (version 5), available at the Victorian Department of Treasury and Finance website at http://www.dtf.vic.gov.au/publications/investment-planning-and-evaluationpublications/investment-management/investment-management-standard-version-5 Flanagan, Joe and Nicholls, Paul (2003), Public Sector Business Cases using the Five Case Model: a Toolkit, updated July 2011 and available from https://www.gov.uk/government/publications/the-green-book-appraisal-and-evaluation-incentral-governent Smith, Courtney A and Flanagan, Joe (2001), Making Sense of Public Sector Investments: the five case model in decision-making, Radcliffe Publishing Limited, (ISBN 1 85775 432 8) State Services Commission (2011), Guidance for Monitoring Major Projects and Programmes, August 2011, and available from the SSC website at http://www.ssc.govt.nz/monitoring-guidance The Office of Government Commerce (OGC), Managing Successful Programmes, 2011 Edition, The Stationary Office (TSO) Publisher. The Treasury (2013), Better Business Cases, guides and templates available at the National Infrastructure Unit website at http://www.infrastructure.govt.nz/publications/betterbusinesscases The Treasury (2013), Regulatory Impact Analysis Handbook, published 2 August 2013, available at http://www.treasury.govt.nz/publications/guidance/regulatory/impactanalysis Welsh Government (2012), Delivering Public Value from Spending Proposals, Green Book guidance on Public Sector Business Cases using the Five Case Model, October 2012, available at http://wales.gov.uk/funding/wiipindex/5cmodel/?lang=en Better Business Cases: Guide to Developing the Strategic Assessment 13
Appendix One: Reviewer Questions The following sample questions can be used as prompts for testing the process and content of the Strategic Assessment. How does the proposal further the objectives of the organisation and fit with the wider strategic context in which the organisation operates? What is the nature and scope of the organisation s activities and services (outputs), key stakeholders and customers (including the public)? What resources are available to the organisation, including existing financial and funding arrangements, organisational structure and staffing, and how does it intend to manage this capability over time? What is the current environment in which the organisation operates, including how it intends to respond to changes and possible risks? What are the main outcomes, impacts and objectives that the organisation is trying to achieve and why? What are the key drivers (problems/ opportunities) for considering an investment in change? Are the potential gains of successful change likely to be worthwhile? Is the investment proposal a good idea? Is there strong evidence of support from management and other key stakeholders? 14 Better Business Cases: Guide to Developing the Strategic Assessment
Appendix Two: Stakeholder Analysis There are three stages in managing the stakeholder engagement: Identifying stakeholders (Who): Who are they? Stakeholders can include business managers, co-workers, governance groups, partners, ministers, investors, funders, suppliers, users, customers, the public, the community, industry groups, media and other interest groups. The monitoring agency and decision-makers are key stakeholders. Analysing stakeholders (Why and What): Which stakeholders should you focus your effort on and why? What do they care about? What motivates them? What is their current level of power, interest and influence? Where do you want them to be? Planning the stakeholder engagement (How): How do you build support? How do you win over sceptics or blockers? How do you engage and maintain the interest of supporters and advocates? How to address emerging concerns? Changing levels of interest? How do you ensure effective communications (i.e. the right amount of timely information)? Key messages and channels? A useful tool to help identify different categories of stakeholder is RASCI: R = responsible A = accountable S = supportive C = consulted I = informed The person who is ultimately responsible for delivering the project and/or task successfully The person who has ultimate accountability and authority; they are the person to whom R is accountable. The person or team of individuals who are needed to do the real work Someone whose input adds value and is essential for successful implementation, or from whom you need to gain buy-in The person or group who need to be notified of results or action taken or results achieved but don t need to be involved in the decision-making or delivery. Better Business Cases: Guide to Developing the Strategic Assessment 15
An influence and interest grid approach can also be used to analyse stakeholders and to inform the engagement actions required. High influence/ high interest: High influence/ low interest: Low influence/ high interest: Low influence/ low interest: These people are the key focus and must be fully engaged and satisfied, including more face-to-face communications. Consider these as participants for the initial facilitated workshops. Enough active consultation effort is required to keep them satisfied without over-communicating. Keep these people adequately informed and address any major emerging issues. These are useful contributors for more detailed analysis and brainstorming. Monitor these people, but do not over-communicate. Figure 3: A sample influence/ interest grid for analysing key stakeholders for a Government department investment proposal. The smaller arrows can be used to indicate planned changes in interest or influence. 16 Better Business Cases: Guide to Developing the Strategic Assessment