BusinessCaseTitle

Subtitle
DepartmentTitle
[Thisshouldbethepublicationtitlefortheinitiative,
ifitweretobefundedinthebudgetprocess.]

[Pleasenote:
1. Thistemplatecanbeusedforbothcapitalandoutputproposalswith
modificationforoutputinitiativesasappropriate.
2. Whencompletingthistemplateyoushouldrefertotheinvestment
lifecycleandhighvalue/highriskguidelinesandassociatedtechnical
guidelinesformoredetailedexplanations.
3. Theextentofdetailshouldbescaledtotherelativecomplexityofthe
proposalandsomeareasmaynotberelevantforallproposals.
4. Theprojectoptionsanalysis(Section4)requiresaconsistent
methodologyappliedtoanalysisofoptionswithalevelofaccuracy
consistentwithconceptestimateataminimum.Theanalysisshould
beevidencebasedanddefensiblewithestimatesofcapitalcosts,cash
flowsandongoingoutputoroperatingcostssufficienttorobustly
compareoptions.
5. Therecommendedsolution(Section5)requiresadetailedcostbuild
upwithsignificantrigorbasedonadesignbrieforprojectscope
statement.Accuracyofinformationinrelationtotherecommended
solutionshouldbeatalevelofaccuracyconsistentwiththatofa
preliminarydesignestimate.
6. Anytextincludedin[]isforguidanceonlyandshouldbedeleted.
7. Forwardanycommentstoinvestment.matters@dtf.vic.gov.au]

Contents

Executivesummary..............................................................................................1
1.
Part1Problem..........................................................................................2
1.1
1.2
1.3
1.4
1.5

2.

Part2Benefits...........................................................................................4
2.1
2.2
2.3
2.4

3.

Background........................................................................................................................2
Definitionoftheproblem..................................................................................................2
Evidenceoftheproblem....................................................................................................2
Timingconsiderations........................................................................................................2
Considerationofthebroadercontext...............................................................................3

Benefitstobedelivered.....................................................................................................4
ImportanceofthebenefitstoGovernment......................................................................4
Evidenceofbenefitdelivery..............................................................................................4
Interdependencies.............................................................................................................4

Part3Strategicresponse..........................................................................5
3.1 Methodandcriteria...........................................................................................................5
3.2 Strategicoptionsanalysis..................................................................................................5
3.3 Recommendedstrategicoption........................................................................................8

4.

Part4Projectoptionsanalysis..................................................................9
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9

5.

Projectoptionsconsidered................................................................................................9
Stakeholderidentificationandconsultation.....................................................................9
Socialimpacts..................................................................................................................10
Environmentalimpacts....................................................................................................10
Economicimpacts............................................................................................................10
Overallevaluationofsocioeconomicandenvironmentalimpacts................................10
Financialanalysis.............................................................................................................11
Riskcomparison...............................................................................................................11
Integratedanalysisandoptionsranking..........................................................................11

Part5:Deliverabilityofrecommendedsolution.....................................14
5.1
5.2
5.3
5.4

Detailsofrecommendedsolution...................................................................................14
Commercialandfinancial................................................................................................14
Management...................................................................................................................17
Delivery17

AppendixA:BenefitManagementPlan.............................................................19
AppendixB:Financialdatapresentation............................................................20
AppendixC:Signoffchecklist............................................................................22

Executivesummary

[TheExecutiveSummaryisanessentialstandalonepartofafullbusinesscasehighlightingthe
overallstoryandkeypointsoftheFullBusinessCase.WhiletheExecutiveSummaryisthefirst
sectionofthefullbusinesscase,itisoftenthelastareacompleted.
ItshouldbeaclearandconciseplainEnglishoutlineofthewholeproposalandasaguidelessthan
10pageslong.Includesummarytablesifappropriatee.g.toestablishcontext.
TheExecutiveSummaryshould:

Describetheinvestmentproposalinonetotwosentences.
Thisdetailedbusinesscaseseeksformalapprovaltoinvest$[xxx]millionin[20yy/yy]to.....
(Thisshouldincludebothcapitalandoutputfactorsincludingongoingresourcingandexpected
outcomes.)(Note:Thisdescriptionshouldserveasthesummarydescriptionrequiredforbudget
publications.)

Statewhatdecisionmakersarebeingaskedtoconsiderordecideand,ifrelevant,anyrecent
historyofconsiderationsuchasthestrategiccase.

Identifyanyoverarchingcontextualfactors
Forexamplespecifyiftheproposalisrelatedtoanelectioncommitmentandprovideabrief
overviewofhowtheproposalrelatestothatcommitment.Iftheproposalisextensionor
subsequentstageofanexistinginvestmentoutlinethepreviousfundingorcommitmentandits
impacttodate.

Brieflyidentifythedifferentoptionsconsideredandasummaryoftheevaluationofthoseoptions
(includingasummarisedoptionsrankingtable).
TheExecutiveSummaryneedstoconveythattheinvestmentproposal:

meetsanimportantneed
issupportedbystrongstrategicandpolicymerit;
optimisesvalueformoneyfromawholeoflifeperspective;and
isachievablei.e.itcanbedeliveredontimeandonbudgetandwillrealisetheintendedbenefits
itsetsouttoachieve.

Whereaproposalfacesconsiderableuncertaintytheexecutivesummaryandbusinesscaseshould
conveyoptionstoflexiblydealwiththatuncertaintyratherthanlockinacompletesolutiontoosoon.
AttheendoftheExecutiveSummary,insertupdatedInvestmentConceptBrief(includingInvestment
LogicMap)ifavailable.
Providereferencetokeysupportingdocumentation.Addanykeydocumentsorextractstothe
Appendixofthefullbusinesscase.]

BusinessCaseTitle
Subtitle

1.

Part1 Problem

[Foroutputproposalsthefullbusinesscaseislikelytobethefirstpresentationoftheproposalto
government.Giventhis,theStage1:Conceptualiseguidelinemayassistincharacterisingthe
problemforthepurposeofthisPart.
ForassetproposalsthisPartshouldrevisitandconfirmthecurrencyoftheanalysisoftheproblemin
theearlierstrategicbusinesscase(strategicassessmentorpreliminarybusinesscase).Thiswill
involverepresentingtheinformationfromthestrategicbusinesscase,reassessingitsvalidityand
furthersubstantiatingtheexistenceoftheproblemwithevidencewhereappropriate.Theintentis
tostrengthenthecasefortheproblem,andbrieflyoutlineanysignificantchangessincethestrategic
businesscase.
Rememberthataproblemcanincludeaserviceneed,issue,orlostopportunity.Forfurther
informationonpopulatingthisPartforassetsubmissionsseetheStage2:Proveguideline.]

1.1

Background
[Describethecontextandbackgroundnecessarytosetthescenetointroducetheproblemand
benefitsfromaddressingtheproblem.Outlinetheexistingservicerelatedoutputs,existingasset
baseandresourcecommitmentsincludinglapsingstatus.Thismightincludeadiscussionontheneed
forgovernmentinterventionandroleofgovernment,currentservicefunding,servicedistribution
andlevels,andunderlyingdriversofthoseservices.Thissectionmayalsointroduceprovidersand
stakeholdersrelevanttotheproblem.]

1.2

Definitionoftheproblem
[ExplaininplainEnglishandinlessthanonepagetheproblem(s)needingtobesolved.Presentthe
causeofeachproblem,whoisaffected,andhowtheyareaffected.Describethenatureofthe
problemforexamplewhetheritisimmediate,transitory,ongoingorescalating.]

1.3

Evidenceoftheproblem
[Providetheevidenceofboththecauseandeffectoftheproblem.Evidencemightinclude:

demandforecastswithassumptions;
keyperformanceindicators(KPIs)oncurrentperformancelevels;and/or
facts/examplesoftheproblem.]

1.4

Timingconsiderations
[Describewhytheproblemneedstobesolvedbygovernmentatthistime,notinganyconnectionsto
longtermplanningdocuments.Explorewhethertheproblemissuitedtoastagedresponse.Explain
theimplicationsofdelayingaresponsetothedefinedproblemsuchas:

physicalorcapacitylimitswillbereached
significantreductionsinthelevelofservice(quality/quantity)willbeexperienced
failuretomeetspecificgovernmentcommitmentsorlegislativerequirements
requirementforurgentactionatadditionalcostduetoassetfailure,systemoverloadetc;
leadtimeforinvestmenttobecomeoperational;and
anycriticaldependencieswithrelatedservicerequirements.]

DepartmentTitle

1.5

Considerationofthebroadercontext
[Explainwhethersimilarneedsoropportunitiesexisteitherinsideoroutsideyourorganisationthat
mightbeaddressedtogetherwiththisproposal.Forexample,benefitsofawidersectoralapproach,
integrationopportunities,pilotstudiesinothersectorsthatmayimpactthetypeofresponse.]

BusinessCaseTitle
Subtitle

2.

Part2 Benefits

[ForassetproposalsthisPartshouldrevisitandconfirmthecurrencyoftheanalysisofthebenefitsin
theearlierstrategicbusinesscase(strategicassessmentorpreliminarybusinesscase).Thiswill
involverepresentingtheinformationfromthestrategicbusinesscase,reassessingitsvalidityand
furthersubstantiatingtheevidenceofbenefitdeliverywhereappropriate.Theintentisto
strengthenthecaseforthebenefits,andbrieflyoutlineanysignificantchangessincethestrategic
businesscase.
ForagenciesusingtheInvestmentManagementStandardtomapbenefits,notethatnotallbenefits
identifiedaspartofaninvestmentlogicmappingprocesswillbesuitableforinclusioninaneconomic
evaluationofaninvestmentproposal.Economicevaluationsfocusonwelfareimpactsonsociety
ratherthanagencyspecificimpactsandtransferbenefits.Economicbenefitswhichwouldbesuitable
forinclusionineconomicevaluationsaretypicallyspecific,tangible,andabletobemonetisedand
canbelinkedunambiguouslytoaninvestmentoractivity.DTFcanprovidecasebycaseguidanceto
agenciesonthisissueasneeded.]

2.1

Benefitstobedelivered
[Explainthekeybenefitsthatflowiftheproblemissolved.(Thesecanbedrawnfromtheinvestment
logicmapandbenefitmapifavailable.)
Listkeyhighleveleconomic,socialandenvironmentalbenefitstheinitiativewilldeliver.Anydis
benefitsornegativeconsequencesresultingfromaddressingtheproblemmustbeoutlined
clearly.]

2.2

ImportanceofthebenefitstoGovernment
[Showhowthisinvestmentwillhelptoadvancethegovernmentand/ororganisationtomeetits
objectives.Thismightincludereferencetothesizeandtimingofthosebenefits.
Describehowthisinitiativeconnectstogovernmentprioritiesandthedepartmentscorporate,
strategicandlongtermplanningdocuments.]

2.3

Evidenceofbenefitdelivery
[Definethemeasuresandkeyperformanceindicatorsthatwillshowwhetherthebenefitshavebeen
delivered.Thesebenefitsprovideevaluationcriteriaandobjectivesforthedevelopmentand
selectionofinterventionsandoptions.
Detailsofbaseline,interimandtargetmeasures,datesfortheKPIsandtheperson/position
responsiblefordeliveringthebenefitsshouldbeincludedinanappendedbenefitmanagementplan
orequivalent,whichhasbeenupdatedtoreflecttherecommendedoption.Referenceorincludethe
benefitsmanagementmap.
Whereappropriate(asanalternativetoaBenefitManagementPlan)anevaluation
strategy/frameworkshouldbeincludedorattached.]

2.4

Interdependencies
[Identifykeyinterdependenciescriticaltobenefitdelivery.Forexamplerelianceonotherprojectsor
decisions.Theseinterdependenciesmayrequirealevelofflexibilitytobebuiltintotheproposal.]

DepartmentTitle

3.

Part3 Strategicresponse

[ForassetproposalsthisPartshouldrevisitandconfirmthecurrencyoftheanalysisintheearlier
strategicbusinesscase.Thiswillinvolverepresentingtheinformationfromthestrategicbusiness
case,reassessingitsvalidityandfurthersubstantiatingtheevidence,feasibilityandassessmentof
thestrategicoptionsanalysisprocess.Theintentistostrengthenthecaseforthepreferred
strategicresponse,andbrieflyoutlineanysignificantchangessincethestrategicbusinesscase.

3.1

Methodandcriteria
[Outlinethemethodandcriteriausedtoselectthestrategicresponse.Criteriashouldincludethe
extenttowhichinterventionswillachievetheproposedbenefitsandoffervalueformoney.Identify
assumptionsandconstraintsusedtoinformthedevelopmentofstrategicoptions.]

3.2

Strategicoptionsanalysis

3.2.1

Strategicinterventions
[Explainthepotentialstrategicinterventions.
Describeandprovideevidenceorreasoningastowhytheseinterventionsmighthaveanimpact.
Thetablemaybeusedtooutlinestrategicinterventions.Noteitisnotmandatory.]
StrategicInterventions
Intervention1
Intervention2
Intervention3
Intervention4
Intervention5
Intervention6
Intervention7
Intervention8
Intervention9
Intervention10
TableXSummaryofpotentialstrategicinterventions

[Thenumberofstrategicinterventionsthatshouldbeconsidereddependsonthescaleand
complexityoftheproblem/investment.]

BusinessCaseTitle
Subtitle

3.2.2

Strategicoptions
[Explainhowthestrategicinterventionscanbepackagedintostrategicoptions.Thiscanbeimportedfromthepreliminarybusinesscase,providedthatongoingcurrencyof
informationhasbeenrevalidated.Thetablemaybeusedtooutlinestrategicinterventions.Noteitisnotmandatory.]

Strategicoptions

Option1

Option2

Option3

Option4

Option5

Option6

<Insertdescription>

<Insertdescription>

<Insertdescription>

<Insertdescription>

<Insertdescription>

<Insertdescription>

Intervention1

Intervention2

Intervention3

Intervention4

Intervention5

Intervention6

Intervention7

Intervention8

Intervention9

Intervention10

StrategicInterventions

TableX:Strategicoptions

[Listedinthelefthandcolumnsarestrategicinterventionsthatcouldrespondtotheidentifiedproblemanddelivertheexpectedbenefits(andtheirKPIs).Againstthelisted
strategicinterventions,aspreadofstrategicoptionsshouldbestructuredtoprovidegenuinealternativestrategicresponsestotheproblem.Theseareintherighthand
columns.Shadeboxesandallocatepercentagestoshadedboxestoindicatetherelativeimportanceofeachspecificinterventionwithintheoption.Todecideonthe
importanceofeachspecificinterventionwithintheoption,balancetwofactors:theimportanceoftheinterventionindevelopingtheKPIsandthelikelycost/effortinvolved.]

DepartmentTitle

3.2.3

Rankingofstrategicoptions
[Evaluatethestrategicoptionstodeterminetheproposedstrategicresponse.Thiscanbeimportedfromthepreliminarybusinesscase,providedthatongoingcurrencyof
informationhasbeenrevalidated.Provideevidencetosupportthishighlevelassessment.Thetablemaybeusedtooutlinestrategicinterventions.Noteitisnotmandatory]

Strategicoptions

Benefits
Percentageoffullbenefittobedelivered
Benefit1
<Insertdescription>
Benefit2
<Insertdescription>
Benefit3
<Insertdescription>
Cost

Estimatedcapitalinvestmentcost(Range)
Estimatedoperationalcosts(Range)
Time
(Range)
Risks
Risk1
Risk2
Disbenefits
Disbenefit1
Disbenefit2
Ranking
13

%
%
%

Option1

Option2

Option3

Option4

Option5

Option6

<Insertdescription>

<Insertdescription>

<Insertdescription>

<Insertdescription>

<Insertdescription>

<Insertdescription>

0%

$nmil$nmil
$nmil$nmilpa

0%

$nmil$nmil
$nmil$nmilpa

0%

$nmil$nmil
$nmil$nmilpa

0%

$nmil$nmil
$nmil$nmilpa

0%

$nmil$nmil
$nmil$nmilpa

0%

$nmil$nmil
$nmil$nmilpa

mmmm

mmmm

mmmm

mmmm

mmmm

mmmm

TableX:Evaluationofstrategicoptions

[Costshereareindicative/orderofmagnitudeanddonotneedtobepreciselycalculated,butneedtobereasonableestimateoflikelyfinancialimpactofeachoption.]

BusinessCaseTitle
Subtitle

3.3

Recommendedstrategicoption
[Presenttherecommendedstrategicoption,summarisingtheresponseandtherationalebehindits
selection.Forexample,therecommendedoptionmayhavebeenselectedbecauseitprovidesalevel
offlexibilityrequiredtodealwithuncertaintysurroundingtheproblem.]

DepartmentTitle

4.

Part4 Projectoptionsanalysis

[Accuracyofdatausedtocompareprojectoptionsshouldbesufficienttorobustlycompareoptions.
Analysisofprojectoptionsrequiresalevelofaccuracyconsistentwithconceptestimates(ata
minimum)ofcapitalcosts,cashflowsandongoingoutputoroperatingcosts.Aconceptestimateis
anapproximationoftheprobablecostofaprogramorprojectbasedonavailableverifiable
information.Thelevelofaccuracyusedtopresentestimatesshouldreflectthescaleandcomplexity
oftheinvestment.Thelevelofanalysisshouldprovidesufficientinformationforaneffective
comparisonoftheprojectoptionsandtodemonstratethatanadequaterangeofoptionshavebeen
considered.Themethodologyusedshouldbeconsistentacrossalloptions.Indicativecostsshouldbe
supportedbyevidenceanddefensible.
Thetablesinthissectionareaguideonlyandshouldbeused,modifiedornotusedasappropriate.
ProjectswhichareHVHRshouldprovidemoredetailedinformationtosupportassessmentof
robustness.
Incharacterisingtheprojectoptionsandconsideringtheirimpacts,agenciesshouldaddress
sustainabilityinvestmentopportunitiesofprojectoptions.Forexamplewheresignificant
operationalsavingscanbederivedthroughspecificapproaches.Thefocusshouldbetoidentifyup
frontsustainabilityinvestmentsinareasofneedandwhicharelikelytodeliveragoodinvestment
return.

Furtherinformation
Formoreinformationoncompletingthissectionseethe:

Stage2:Proveguideline.
Technicalguideline:SustainabilityinvestmentguidelinesforVictoriaspublicassets.]

4.1

Projectoptionsconsidered
[Expandeachofthestrategicinterventionsincludedinthestrategicresponseintoseveralmore
detailedpotentialprojectoptions,includingabasecaseandatleastonemarketbasedsolution.
Aimforamaximumofaroundfive.RefertotheStage2:Proveguidelineforanexplanationofthe
basecaseandmarketbasedsolutions.
Describethemethodandrationaleusedtoselecttheprojectoptions
Describeprojectoptions,including:

scope
assetandoutputoptions(orcombinations);
atleastonemarketbasedsolutionwherepossible;
potentialfor3rdpartyrevenues;
criticalassumptionsorconstraints(orwindowsofopportunity)ofeachoption;
outlineanyprojectoptionsconsideredbutnotevaluatedandstaterationalefornon
consideration;and

atahighlevel,theextenttowhicheachofthefeasibleoptionsconformstoGovernmentand
relevantagencylegislation,policies,standardsandstrategies.]

4.2

Stakeholderidentificationandconsultation
[Atabroadlevel,provideanoverviewofthelikelyrelativeimpactonkeystakeholdersofthevarious
projectoptions,andoutlinetheirpositioninrelationtotheproject.]
BusinessCaseTitle
Subtitle

4.3

Socialimpacts
[Outlinethesocialimpactsandopportunitiesoftheproposalandidentifyanysignificantsocialissues
specificallyrelevanttoparticularprojectoptions(i.e.differentiatingbetweentheprojectoptions).]

4.4

Environmentalimpacts
[Provideahighleveloverviewoftherelativeenvironmentalimpactanalysisoftheoptionsincluding
specificactionsrequiredtomeetallrelevantlegislativerequirementsandidentifiedlikelycommunity
concerns.]

4.5

Economicimpacts
[Provideahighleveloverviewofallsignificanteconomicimpactsandopportunitiesoftheoptions.
Economicimpactsinthiscasereferstoimpactsonkeyeconomicvariables,suchasvalueadd,
productivity,workforceparticipation,unemploymentandothers.

Thiscouldbedoneinaqualitativemanner(e.g.bydescribingpossiblechangesandtheirlikelyorder
ofmagnitude),orthroughactualeconomicmodellingtocomeupwithrobustquantitativeestimates.
Thelatershouldonlybedonewherethemagnitudeoftheprojectwarrantsthisadditionaleffort.
ThereisawealthofdataavailablefromtheAustralianBureauofStatisticsandothersources,which
canassistinthisendeavourparticularlywhenprovidingqualitativedescriptionsofpossibleimpacts.

Wherethemagnitudeoftheprojectwarrantsprovidingquantitativeestimates,thenComputable
GeneralEquilibrium(CGE)modellingisrecommended.Likeallmodelling,thisneedstobebasedon
robustassumptions/inputsthataretransparentinorderforittobeseenasreliable.]

4.6

Overallevaluationofsocioeconomicandenvironmentalimpacts
[Theexpectedsocioeconomicandenvironmentalimpactsoftheprojectoptionsneedtobeassessed
andconsolidatedwithinarobustframeworkthatappropriatelycapturesandweighstheseimpacts.
Theassessmentofsocioeconomicandenvironmentalimpactsisveryimportantbecauseit
effectivelyoutlineswhattheGovernmentwouldbepurchasingforitsinvestment(intermsofthe
netbenefitstosociety).
Thepreferredmethodologyforintegratingsocial,economicandenvironmentalimpactsisacost
benefitanalysis(alsoknownasaneconomicevaluation).Thismaybecombinedwithamulticriteria
analysisforimpactsthatareunsuitedtothecostbenefitanalysisframework,suchaswherebenefits
aredifficulttomonetise,.Thesetoolsshouldenableallkeyimpactstobecapturedinthe
assessment.]

4.6.1

Costbenefitanalysis(economicevaluation)
[Identifywelfareimpactsonsociety,bothcostsandbenefits,foreachprojectoptiontheseimpacts
includebothmarketandnonmarketspecificimpactsintheareaspreviouslydescribedassocial,
environmentalandeconomic.Describethemethodologytobeused;ingeneralthiswillbeanet
presentvalueassessmentatanaggregatelevelrelativetothebasecase.Quantifyandmonetisecosts
andbenefitsatthelevelofaccuracyofconceptestimatetodevelopedconceptestimate.Note
thatthelevelofaccuracyshouldbedeterminedbasedonthescaleandcomplexityofthis
investment.Assumptionsshouldbeprovidedtojustifyestimatesused.
Oncecostsandbenefitshavebeenestimated,agenciesshoulddiscountimpactsbacktopresent
valuesandranktheprojectoptions.Notedistributionalimpacts,whileanimportantfactorfor
governmentdecisionmaking,arenotincludedintheheadlineresults(e.g.thenetpresentvalue)of
theeconomicevaluation(whichaddresseswelfareimpactstosocietyasawhole).
ForfurtherinformationoncompletingthispartseeStage2:Proveguideline.
Outlinetheoutcomeoftheeconomicanalysis.]

10

DepartmentTitle

4.7

Financialanalysis
[Provideanestimateofthecapitalandwholelife(output)costsoftheprojectoptionsanddescribe
theprocessbywhichtheestimatewasderived(e.g.workshop,previousproject).Costingsforthis
sectionofthefullbusinesscaseareatconceptestimatelevelataminimum,andnotextensively
detailed,butshouldconsiderwholeoflifedifferencesbetweenoptionsoveranappropriateperiod.
Theyneedtobeareasonableevidencebasedrealisticestimatesbutarenotintendedtobe
comprehensivelyconstructedfromfirstprinciple.Theyneedtoprovidesufficientdetailtoallowthe
NetPresentValue(NPV)comparisonofoptions.
Theanalysisshouldallowdecisionmakerstoconsidertheoptionthatwilldeliverthebestoutcomes
inlinewithgovernmentobjectives,includingBudgetconsiderations,andwillhaveademonstrable
effectonoutput/servicedeliveryperformance.]

4.8

Riskcomparison
[Riskassessmenthereishighlevelandneedstobesufficienttoenablerelativecomparisonof
options.
Describeriskassessmentprocessfortheprojectoptionsanalysis,whichmayincludeariskworkshop.
Risksidentifiedshouldconsiderthefinancial,economic,socialandenvironmentalanalyses.
Provideasummaryofkeyriskswhicharecriticaltodifferentiatethesuccessoftheinvestmentin
relationtotheprojectoptionsconsidered.Significantuncertaintiesmaywarrantadifferentapproach
totheinvestmenttoincorporateflexibilitytomanagetheuncertainty.
Toassistinidentifyingthekeyriskstoconsider,thefollowingisa(nonexhaustive)listofrisk
categories:Changeinlaw/policy;commercial;commissioning;completion/construction;contractual;
demand;economic;environmental;financial;implementation;investmentplanning;management;
obsolescence;operations;organisational;political;privatesector;regulatorytechnological;residual
value;upgrade.]

4.9

Integratedanalysisandoptionsranking
[Thissectionsummarisesatahighleveltherelativemeritsoftheoptionsconsidered.Detailsinthis
sectionareexpectedtobeataconceptuallevelonly.
Totheextentthatcosts,benefitsandriskshavebeenquantifiedandvaluedrobustly,thepreferred
optionistypicallytheonewiththehighest,riskadjusted,NPV.
Astheheadlineresultoftheeconomicevaluationdoesnotincludedistributionalimpactsorwherea
projectoptionhassignificantintangible(ornonmonetised)benefits,theseimpactscanoutweigh
thedifferenceinNPVbetweenalternativeoptions.Thiscanalterthechoiceofthepreferredoption
andthesetradeoffsneedtobeclarifiedfordecisionmakers.Multicriteriaanalysis(MCA)canbea
usefultooltodothis.
Selectionofoptionscanbeaffectedbytherisk/uncertaintyassessment.Further,wheretheNPVof
anoptionissubjecttosignificantuncertainty,itcanbedifficulttodistinguishbetweenalternatives.A
lowrisk,lowNPVoptionmaybepreferredtoanalternativewithhigherbutmoreuncertainnet
benefits.Thelevelofuncertaintymaysuggestthatflexibilityneedstobebuiltintotherecommended
approach,forexampleallowingdecisionstobemadeprogressivelyasmoreinformationbecomes
available.
Inasummarytable,provideanintegratedassessmentoffinancialandnonfinancialimpactstoarrive
atarankingofprojectoptions.Whereamulticriteriaanalysisisincludedintheintegrated
assessment,outlinetherelativeweightingofthefinancialandnonfinancialcomponents.
Seetwoalternativeexamplesofpossiblefinancialandsocioeconomicanalysissummarytables
below.Note,choosewhichtableofthesetwooptionsismostappropriatetoyourintegrated
analysis.Donotfilloutboth.]

BusinessCaseTitle
Subtitle

11

Tablexx:Presentingtheresultsoftheoptionsanalysis

Projectoption
1:DoNothing

Project
option2:

Projectoption
3:

Projectoption
4:

Projectoption
5:

AnalysisPeriod(years)
CapitalCosts($m)
OutputCosts($m)

CostBenefitAnalysis(ofmonetarycostsandbenefitsdiscountedattheappropriateDiscountRate)
PresentValueofBenefits
($m)
PresentValueofCosts
($m)
BenefitCostRatio
NetPresentValue($m)

Otherimportantconsiderations(seetheexamplesprovided)
Intangiblecosts/benefits
(e.g.small,med.,large)
Distributionalimpacts
(e.g.small,med.,large)

Preferredoption

Tablexx:Presentingtheresultsoftheoptionsanalysis,withmulticriteriaanalysis

Projectoption
1:DoNothing

Project
option2:

Projectoption
3:

Projectoption
4:

Projectoption
5:

AnalysisPeriod(years)
CapitalCosts($m)
OutputCosts($m)

CostBenefitAnalysis(ofmonetarycostsandbenefitsdiscountedattheappropriateDiscountRate)
PresentValueofBenefits
($m)
PresentValueofCosts
($m)
BenefitCostRatio
NetPresentValue($m)

MultiCriteriaAnalysis(rankingofintangiblecostsandbenefits,ifany)

4.9.1

Criteria1
Criteria2
Criteria3

Preferredoption

Testingtherobustnessoftheoptionsanalysis
[Conductingasensitivityanalysisisaformofquantitativeanalysistoexaminehownetpresent
values,benefits,costsorotheroutcomesvaryasindividualassumptionsorvariableschange.This
approachmaybeusedtotesttherobustnessoftheprojectoptionsanalysis,particularlyforlarger
investments.
Provideahighlevelsummaryofthekeyassumptionsfortheoptionsassessment.Providea
descriptionontherobustnessoftheoptionsanalysisinrelationtokeyassumptionsmade.
Thetablebelowisoptional.]

Tablexx:SensitivitytestingresultsScenarioOne:.

12

DepartmentTitle

Projectoption
1:DoNothing

Projectoption
2:

Projectoption
3:

Projectoption
4:

Projectoption
5:

AnalysisPeriod(years)
CapitalCosts($m)
OutputCosts($m)

CostBenefitAnalysis(ofmonetarycostsandbenefitsdiscountedattheappropriatediscountrate)
PresentValueof
Benefits($m)
PresentValueofCosts
($m)
BenefitCostRatio
NetPresentValue($m)

OtherimportantconsiderationsorMultiCriteriaAnalysis(rankingofintangiblecostsandbenefits,ifany)
Criteria1
Criteria2
Criteria3

Preferredoption

BusinessCaseTitle
Subtitle

13

5.

Part5:Deliverabilityofrecommendedsolution

[Thefullbusinesscaseisthefirsttimedepartmentsareaskedtoaddresstheinformationrequiredin
Part5andspeakstothequestion:Canthesolutionreallybedelivered?,thissectionisakeypartof
thefullbusinesscaseandshouldputforwardarigorouscaseclearlyjustifyingwhytherecommended
solutionisthemosteffectiveandactionablesolution.
Thissectionshouldincludeconfirmationoftheaboveanalysisinthelightofdetailedcostingand
scopingoftherecommendedsolutionaswellasadditionaldetailedinformationrelatingspecifically
tothedeliverabilityoftherecommendedsolution,asspecifiedbelow.
Toavoidduplication,refertoearliersectionswhereappropriate.
Thissectionshouldalsojustifywhytherecommendedsolutionispreferredinrelationtoeach
componentoftheanalysis.]

5.1

Detailsofrecommendedsolution
[Clearlystatewhichprojectoption(whichmaycompriseoneoranumberofprojects)isthe
RecommendedSolution,addressingtherationaleforitsselectioninlightoftheintegrated
assessment,statingitsdetails(includingobjectivesandaprojectscopestatement).
Ifamajorassetisrequired,provideabriefsummaryofthedesignandspecificationstotheextent
theyhavebeendeveloped.Note:detaileddesignsarenotexpectedatthisstage,however
departmentsmustprovideenoughinformationonscopetosupportarigorouscosting.
Providedetailsonoutputrequirementsassociatedwithchangesproposedtoservicedelivery
includingVPSandnonVPSstaffingimplications.
Whereappropriateincludeasummaryofkeyelementsofthedesignfeasibilitystudywhich
demonstratesthelongtermvisionforthepreferredoptioninthebroaderurban/environmental
context.ProvideaDesignIntentStatementtodemonstratetheintendedlevelofdesignqualityand
identifywhatdesignaspectsoftheprojectneedspecialconsideration.
Provideinformationonpreferredsequencingorstagingoftheprojectsolutionandjustifywhy
staging/sequencingisrequiredordesired.
DescribesignificantbroaderimpactsspecifictotheimplementationoftheRecommendedSolution.
Indicatelocationaldetailsandserviceareaimpacts.
Outlinehowthesolutionisconsistentwith,oraddresses,publicinterestissuessuchasequity,access
etc.]

5.2

Commercialandfinancial

5.2.1

Procurement
[Outlinetheprocurementoptionsanalysismethodandprocess,showingrankingofoptionsagainst
criteriausedtoselectedrecommendedprocurementstrategy.
Detailtherecommendedprocurementstrategyforthisinvestment,justifyingwhyitisthebestvalue
formoneyoption,forexampleduetoitscapacitytoincludeflexibilityorbettermanagerisk.This
shouldbebalancedwiththerelatedissuesoftime,cost,wholeoflifevalueandquality.
Outlinetheorganisationsexperienceandcapabilitytodeliverthepreferredprocurementmethodas
wellaskeyrisksandcontractualissues.(Includestrategytoaddressdeficiencieswhereappropriate
forexampleintentiontoengageexperthelp.)

14

DepartmentTitle

Formulateadaptationstothepreferredprocurementmethodtoensurethatqualityandgooddesign
areembeddedintheprocess.TheOfficeoftheVictorianGovernmentArchitectcanprovideadvice
ontheselectionofprocurementmodelsandpotentialadaptationsandthedesign,siteutilisationetc.
IfaPPPprocurementapproachisbeingproposedthePartnershipsVictoriaGroupatDTFcanadvise
ontheadditionaldetailsrequired.
Ifprojectalliancingisbeingconsidered,fullbusinesscaserequirementsaredifferent,pleasecontact
DTFCommercialDivisionforfurtheradviceorconsulttheNationalguidelines.]

5.2.2

Riskassessmentandmanagement
[Provideadetailedriskassessmentoftherecommendedsolution,outliningkeyrisksand
managementstrategies.]
Risk

Managementstrategy

[Describerisk]

[Outlinestrategyformanagement]

TableX:Keyriskstothesuccessofthisinvestment

[Therisksmayhighlighttheneedforaflexibleapproachtotheinvestment.Forexamplewherethe
uncertaintiesmayberesolvedatapointintime(e.g.successorfailureofapilotstudy)andflexibility
canbebuiltintoallowaninformeddecisionatthistime(whethertoproceedwiththefull
investment).Thissectionshoulddescribedesiredflexibilityandcircumstanceswhichmake
flexibilitydesirable.
Provideanoverviewofproposedarrangementsforongoingriskmonitoringandmanagement.
Includeappendixwithriskmanagementstrategyandriskregister.]

5.2.3

Detailedcostingandeconomicevaluation
[ProvideadetailedoverviewofthecostingfortheRecommendedSolution,includingcapitalTEIand
outputcosts.Includebudgetcashflowoverarelevantperiodforbothcapitalandoutputamounts.
Theprojectbudgetestimateincluding:basecostestimate,baseriskallocationandcontingency
shouldbebasedonaprojectscopestatementatthepreliminarydesignestimatelevel.
Identifytheimpactonoutputfundingandthebreakdownofoperatingcoststokeycomponentssuch
asstaffing,maintenance,depreciation,CACetc.Thisdetailshouldextendoverareasonableperiodof
yearstoallowawholeoflifecostingperspective.
Attachappropriatetablesintheappendices,referAppendixBforexampletables.
DepartmentsshouldconsultwithDTFtoagreecostingsbeforesubmittingthebusinesscasefor
Budgetfundingconsideration.
ForAssetprojects:
RefertotheInvestmentLifecyclesProjectBudgetGuidelinewhichprovidesspecificguidanceon
developmentoftheprojectbudget.Thetablesbelowarebasedonthatguidanceandmaybe
modifiedtoincorporateappropriatedetails.]

Element

Estimate

Tablereference

Basecostestimate
Baseriskallocation
Projectcostestimate
Contingency
Projectbudget

$XXXm
$XXm
$XXXm
$XXm
$XXXm

(Table2)
(Table3)

(Table3)

Table1:Headlineprojectcostelementsummary

BusinessCaseTitle
Subtitle

15

BASECOSTESTIMATE
EffectivedateofBCE:dd/mm/yy
Estimateddateofcommencementofconstruction:dd/mm/yy
1 DirectCosts

1.1
Materials

1.2
Labour

1.3
PlantHire

Subtotal

2 IndirectCosts

2.1
Recurrentoverheads

2.1.1
Sitefacilities

2.1.2
Plant&Equipmentsitemaintenance

2.1.3
Projectmanagementcosts

2.1.4
Commercial

2.1.5
QAandSafety

2.2
Nonrecurrentoverheads

2.2.1
Establishmentandmobilisation

2.2.2
Disestablishmentanddemobilisation

2.2.3
Projectinsurances

2.2.4
Professionalfeesdesign,legal,financial,etc

Subtotal

3 OwnersCost

3.1
Contractedprofessionalstaff

3.2
Investigations

3.3
Landcosts&resumptions

3.4
Authorityfees

3.5
Ownersuppliedplantandequipment

Subtotal

4 ContractorsFee

4.1
Profitmargin

4.2
CorporateOverheads

Subtotal

5 ProvisionalSums

5.1

Subtotal

TOTALOFBASECOSTESTIMATE

$
$

Table2:Basecostestimate
BASERISKALLOCATIONANDCONTINGENCY

6 BaseRiskAllocation

6.1
Escalation

6.2
ProjectRiskA

6.3
ProjectRiskBetc

Subtotal

7 Contingency

7.1

Subtotal

TOTALOFPROJECTRISKS

(periodbetweenBCEandconstruction)

$
$

Table3:Projectrisks

[TheNetPresentValueestimateshouldberecalculatedbasedontherefinedcostsandamore
developedassessmentofthebenefitsfortherecommendedsolution.Fortherecommendedsolution
agenciesmayneedtoinvestinvaluationtechniquessuchasmarketbasedvaluation,revealed
preferences,statedpreferenceorbenefittransfermethodtobetterassessthemonetaryvalueof
benefits.Note:thisshouldonlybeundertakeniftheadditionaleffortandexpenseincurredin
assigningmonetaryvaluesreflectsthelikelysizeofthoseimpacts.

16

DepartmentTitle

Basedonthedetailedcostingofcapital,outputsandbenefitsfortherecommendedsolution
formalisetheeconomicanalysis(e.g.NPVandBCR)todemonstratetheeconomicimpactofthe
investment.]

5.2.4

Fundingsources
[Discussproposedfundingsourcesincludingpotentialcontributionsfromotherlevelsofgovernment,
privatesector,saleofassetsetc.Thissectionshouldpresentasummaryofthesourcesoffunding
requirementforcapitalandoutputcostswhichwillberequiredforbudgetdeliberations.Thisshould
includeoffsetsortheconsequencesofadoptingamarketbasedsolution.Typicallythispresents
budgetandforwardestimateswithabalanceofTEIandongoingoutputfunding.ReferAppendixB
forexamplesofhowthisinformationmightbepresented.]

5.3

Management

5.3.1

Governance
[Fortherecommendedsolution,detailtheproposedprojectgovernancestructuredemonstratingits
appropriateness.Note:ForHVHRprojects,DTFmustbeincludedintheprojectgovernancestructure.
ASeniorResponsibleOwnerneedstobeidentified(orproposedforallinvestments.]

5.3.2

Stakeholderengagementandcommunicationsplan
[Providedetailedinformationaboutkeystakeholdersinrelationtotherecommendedsolution.
Provideanoutlineofkeyelementsofstakeholderandcommunicationsanalysisdescribing
stakeholders,theirlikelypositionontheprojectandplanstomanagethat.Ifavailableattachasan
appendixaproposedhighlevelstakeholderengagementandcommunicationsstrategycoveringthe
approachtodealingwithstakeholdersbothuponprojectannouncementandongoingduringproject.]

5.3.3

Projectmanagementstrategy
[Outlinetheproposedprojectmanagementstrategydemonstratingitssuitabilityandrobustness,
appendinganydetailedplansasanappendixifnecessary.
Describetheorganisationalcapabilityandgenericsystems,standardsandmethodologywhichwould
allowtheprojecttobedeliveredsuccessfully.
Demonstrateinthissectionthattheimplementingorganisationhasthecapacityandcapabilityto
mobiliseanddeliverthisinvestment.]

5.4

Delivery

5.4.1

Changemanagement
[Outlinethescopeoforganisational/processchangemanagementrequiredtoeffectivelydeliverthe
benefits.Thismayinvolveprocessreengineering,staffretrainingetc.requiredtotransitionfrom
existingarrangementstosupporttheoperationofthenewinvestment.Ifchangemanagement
requirementsaresignificantconsiderappendinganoutlineofthechangemanagementstrategy.
Notethisdoesnotincludemanagementofproposedscopechangesduringimplementation.]

5.4.2

Timelinesandmilestones
[Listthemajormilestonesanddeliverablesandtheirdeliverytimelinesandcontingencies.
Outlinethehighlevelprojectschedule,includingprocurementstepsandstatutoryapprovalsandkey
decisionpointsforprojectprogression,terminationorotherwise.
Provideinformationonpotentialcompetingpriorities,dependencyanalysis,skills,capabilities,
availabilityofagencystaffetc.
Provideadviceonpubliccommunicationofprojecttimelines(tobeconsistentwithcommunications
strategy).]
BusinessCaseTitle
Subtitle

17

5.4.3

Performancemeasures
[Provideastatementofinvestmentbenefits.Analysehowwelltherecommendedsolutionaddresses
theproblemandkeybenefits.Thissectionaddressestheeffectivenessandefficacyoftheproposal.
Providereferencestotheevidenceofbenefitdeliveryidentifiedinsection4andprovidefurther
specificinformationonperformancemeasurementfortheproposedproject,thisshouldbea
detaileddescriptionof:

howwelltherecommendedsolutiondeliversidentifiedbenefits;and
thespecificKPIsthatrelatetotherecommendedsolution.
Refertotheappendedupdatedbenefitmanagementplantoinformthissection.
Mostinvestmentswillaffectoutputperformancemeasures.Theimpactonexistingoutputsand
performancemeasuresshouldbespecifiedindicatingboththechangestooutputmetricsrelativeto
currentlevelsandthetimingofthatimpact.]

5.4.4

Outputname:

PerformanceMeasures

Unitof
measure

Changeintargetifproposalisendorsed
201213201314201415201516201617

Quantity
Quality
Timeliness

Readinessandnextsteps
[Explainplanstotransitiontheinvestmenttothenextstage(Stage3:Procure)
Explainthemainareasofuncertaintytoberesolvedinthenextstage,forexample,information
regardingstaffing,approvals,andlandacquisitionetc.]

5.4.5

Signoff
[Signoffsarerequiredby:

Primaryauthor
Theseniorresponsibleowner(ordepartmentalChiefFinancialOfficer)onGatewaysProject
ProfileModel(PPM)includedtoupdateproposalrisks.

Theseniorresponsibleowner(orChiefFinancialOfficer)andthedepartmentsSecretarythese
arerequiredforfullbusinesscasestobeconsideredbytheGovernment.
InestablishingtheprojectbudgetestimatetheSROshouldsignoffon:

Thestatementsoftheservicebenefitsandprojectscope.
Theadequacyoftheprojectbudgetincludingthebasecostestimate,riskassessment,baserisk
allocationandcontingency.

Thisshouldbesupportedbyadditionalsignoffsfrom:
Thebasecostestimator;and
Theagencyanditsadvisersonbaseriskallocationandcontingency.
Providedetailsofanyreviewprocess(e.g.forHVHRGatewayreviewsaremandatory).
Sothatdecisionmakersknowthatthebusinesscaseisthoroughandcomplete,pleaseprovidea
qualityassurancechecklistsuchassetoutinAppendixC,withbusinesscasesubmissionsseeking
endorsementfromdepartmentalSecretaries.SeetheStage2:Proveguidelineformoredetails.]

5.4.6

Exitstrategy
[Detailtheexitstrategyandthefactorsthatwouldleadtowantingtoexiteitherearlyoratterm.
Investmentsmaybetimelimitedormayinvolvepilotstudies.Thissectionallowsforconsiderationof
whatterminationrightsaredesirableatkeyreviewordecisionpointsforexamplelapsingprograms.]

18

DepartmentTitle

AppendixA:BenefitManagementPlan

[PasteSpecialasanEnhancedMetafileforoptimumpicturequality.]
Includeabenefitmanagementorevaluationplanifavailableorcompletethefollowingtableforeach
KPI.]
KPI

Baseline
Source
Interimtarget
Reportingforum
Startdate
Frequency
Enddate
Responsibility

BusinessCaseTitle
Subtitle

19

AppendixB:Financialdatapresentation

Thefollowingtablesareintendedasaguidetodatainclusionandshouldbeusedorsupplementedas
appropriate.Operatingcostsshouldbeaddressedoverareasonableperiodtoallowawholeoflife
perspectiveinanappropriatetable.Modifytablesasrequired,forexamplebyadjustingperiodto
captureoutputcostsfromcommencementoftheoperationofnewfacility.
B.1Fundinghistory
Inthetablebelowprovidedetailsofthefundinghistoryforthisorsimilar/relatedinitiatives.This
tableshouldincludefundingforanearlierstageinamultistageproject,fundingforbusinesscase
developmentorscopingstudy,fundingforalapsingprogram,orfundingforarelatedprogramthat
hasbroadlythesamepolicyobjectiveasthisinitiative.
Descriptionoffundingprovided

200809

200910

201011

201112

201213

$m

$m

$m

$m

$m

B.2Existingfundingbase
Inthetablebelowprovidedetailsoftheexistingfundingbasethathasbeenprovidedforthisor
similar/relatedprograms.Thisshouldincludefundingthatisinthedepartmentsbaseaswellas
fundingforanyrelatedlapsingprograms.
Descriptionoffundingprovided

201213

201314

201415

201516

201617

$m

$m

$m

$m

$m

B.3Budgetimpact

capitalfunding
Estimatedassetinvestmentcash
flow
(Componenta)
(Componentb)
(Componentc)
Subtotal(grossassetpriceincrease)
Fundsfromothersources(e.g.asset
saleproceeds,Commonwealth
funding,trustaccounts)please
specify
NetImpactoncapitalappropriation
outputfunding
Pricechangerequestedfor
provisionofoutput
(Componentx)grossoutputprice

20

DepartmentTitle

201213

201314

201415

201516

201617

TEI

$m

$m

$m

$m

$m

$m

0.000
0.000
0.000
0.000
(0.000)

0.000
0.000
0.000
0.000
(0.000)

0.000
0.000
0.000
0.000
(0.000)

0.000
0.000
0.000
0.000
(0.000)

0.000
0.000
0.000
0.000
(0.000)

0.000
0.000
0.000
0.000
(0.000)

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

201213

201314

201415

201516

201617

TEI

$m

$m

$m

$m

$m

$m

(Componenty)grossoutputprice
Capitalassetcharge

0.000
0.000

0.000
0.000

0.000
0.000

0.000
0.000

0.000
0.000

0.000
0.000

Depreciationexpense

0.000

0.000

0.000

0.000

0.000

0.000

Offsetfrominternalreprioritisation

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

Subtotal(netoutputpriceincrease)

0.000

0.000

0.000

0.000

0.000

0.000

Offsetfromrevenue
Offsetfromanotherfundingsource
(eg.Commonwealthfunding,CSF,
trustaccount)pleasespecify
NetImpactonoutputappropriation

(0.000)
(0.000)

(0.000)
(0.000)

(0.000)
(0.000)

(0.000)
(0.000)

(0.000)
(0.000)

(0.000)
(0.000)

0.000

0.000

0.000

0.000

0.000

0.000

201213

201314

201415

201516

201617

Ongoing

$m

$m

$m

$m

$m

$m

B.4Revenue
Revenueincrease/decrease

Revenueinitiative1
Revenueinitiative2
Lessrevenuealreadyin
budget/forwardestimates
Netrevenueimpact

0.000
0.000
(0.000)

0.000
0.000
(0.000)

0.000
0.000
(0.000)

0.000
0.000
(0.000)

0.000
0.000
(0.000)

0.000
0.000
(0.000)

0.000

0.000

0.000

0.000

0.000

0.000

BusinessCaseTitle
Subtitle

21

AppendixC:Signoffchecklist

Investmenttitle:
Agency:

Y/N

Istheneedclearlyestablished(e.g.investmentconceptbrief)?
Arethelinkstogovernmentpolicy(ies)andcontributionsexplicit?
Isthereaclearstatementoftheservicebenefitsandprojectscopeandarefuture
implicationsnoted?
Arecostestimatesprovidedforcapitalandoperationalphases?
Havecostandriskestimatorssignedoffontheadequacyoftheirwork?
Istheprojectbudgetincludingthebasecostestimate,riskassessment,baserisk
allocationandcontingencyadequate?
Docostandbenefitestimatesandanalysesshowvalueformoney?
Aretheprojectdeliverablesclearlystated?
Isabenefitmanagementorevaluationplanincluded?
Areriskmanagementprocessesinplaceandassumptionsstated?
Doestheproposalassesstheprojectscheduleandreadiness(includingmarketappetite)?
Aregovernancestructuresidentified?
Arestakeholderinterfacesdetailed?
Areregulatoryrequirementsidentified?
IstheprojectHighValue/HighRisk?
HaveGatewayreviewsbeenundertaken?Gate1
Gate2

Thismodelchecklistisdesignedfortheprojectproponentsendorsement.

Preparedby:..

Date:

Date:

Approvedby:..

...

(nameofapprovingofficerordelegate) (title)

Secretary:..

22

DepartmentTitle

Date: