Calls for improved business cases to inform infrastructure investment

Consult Australia, an association for consulting firms in the built environment sector, has identified ten factors for a successful business case for infrastructure projects.  

These have been outlined in Consult Australia’s Business Case Development in Australia report.

These critical success factors can help ensure that business cases are developed with the right skills through a collaborative project team, and are arriving at the right outcomes through an integrated and inquiry-based approach. 

The ten factors include: 

  • Strong procurement and management

The way a Business Case is procured and managed can influence the degree of coordination and ultimately the coherence of the Business Case. 

  • Early and continued engagement with the most senior project sponsor within Government

That is, the person who will support the Business Case through the government funding decision making approval process. Projects that dedicate time to this engagement/lobbying through the Business Case process, benefit from a more straight-forward approval process. 

  • Clear scope of each supporting consultant matched to the final Business Case requirements

There are some elements of the Business Case that commonly fall through the cracks and are left without clear owners. Identification and documentation of the benefits realisation plan is one example. 

  • Agree the story and obtain team buy-in

The scope for producing a Business Case is often split between a team of consultants. It can therefore be common to have many different views of the ‘story’ that a Business Case should tell. When chapters are written by different authors, or even when they are authored by the same writer, but that person is not the decision maker, the story can be mis-interpreted or confused.

  • Setting budgets and delivery timeframes

Project budgets are often set in advance of scopes being identified. This can set limitations for scope that may not align to decision maker’s expectations. The risk of this happening is greater where there is a large lag in time between the stages of a Business Case being completed.

  • Sufficient Options Analysis

Sufficient Options Analysis should be completed prior to the Detailed Business Case stage. Different jurisdictions call this process different things, but it always precedes the Business Case assessment. The Options Analysis stage is to ensure that all possible solutions to the problem or service need are considered early in the process. 

  • Reassessing the need

The purpose of the project assessment framework in each state is to identify those projects that are worthy of investment.

  • Peer Review

Peer reviews can often create conflicting views on fundamental project concepts relating to the reference project. Peer reviews are optimised to deliver the best value to the project when collaborative behaviours (rather than defensive behaviours) are extended to the peer consulting team.

  • Proactive management of data

In the age of “Big Data”, Business Case developers have increasing opportunity to utilise a range of data sets to assist with demonstrating the case for change. Access to data can come at considerable cost, therefore thoughtful consideration is required as to the best data to use, how it will be applied and what it is intended to demonstrate. In making decisions around data collection and purchase, Business Case managers must also consider how data can potentially be used to assist with future stages of the project.  

  • Inquiry-based approach

A genuine inquiry-based approach starts by posing questions, problems or scenarios – rather than simply presenting established facts or examining a particular solution. It begins with the premise that there are a range of potential ways to address a problem or challenge, and uses an evidence-based approach to weigh up strategic options, with a focus on maximising potential benefits, and minimising potential risks and constraints.

Chief Executive of Consult Australia, Matt Bolger, said that business cases are sometimes developed after a preferred solution has been identified. 

“In these circumstances, business cases may suffer from momentum bias where the focus is on ‘reverse justifying’ the pre-made decision.

“Consult Australia believes a business case should instead be viewed as a mechanism to define and truly understand a problem, and to then use this analysis to inform investment decisions.” 

“A business case justifying how a project can be delivered, rather than what project is required, can result in a business case that advocates an investment decision that does not represent good value for money.

“In some circumstances a “no go” decision can be the most appropriate response based on the problem identification and should not be considered a failure. The development of a business case is a process, and re-visiting the original assumptions throughout the process is good practice.” 

A copy of Consult Australia’s Business Case Development in Australia report is available here

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