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What is the Business Case Approach?

The NZ Transport Agency’s Business Case Approach (BCA) is a robust, principles-based approach for developing business cases for investment through the National Land Transport Programme (NLTP). It is based on the New Zealand Treasury’s Better Business Cases. 

Find out more about Treasury’s Better Business Cases (external link)

Benefits of the Business Case Approach

Applying key BCA principles and behaviours helps to ensure that business cases are developed in a fit-for-purpose way that provides value for money. That is, doing the right thing in the right way, at the right time and place, and for the right cost.

The BCA supports planning and investing for outcomes, ensuring early collaboration between stakeholders and progressive development of a robust, evidence-based investment case. It helps business case writers develop a robust proposal for investment by:

  • breaking the necessary work into phases, with regular decision points about whether it is worth proceeding
  • starting with exploring the real nature of the problem or opportunity that may need to be addressed, rather than beginning with a solution already in mind
  • building up the business case through critical thinking, gathering evidence and consulting with stakeholders before shortlisting and analysing possible solutions
  • making sure that outcomes of the proposed investment are clearly linked to government priorities and guiding strategies.

Flexible and fit for purposeFit-for-purpose effort

The BCA breaks down the work that needs to be done for a robust business case into phases, which means the case can be built up progressively, and decisions about whether or not to proceed can be made at regular checkpoints.

Rather than being a process to be followed from point A to B to C, the BCA phases are a way of grouping the critical thinking that needs to happen and the decisions that need to be made to progress the business case. Depending on the complexity of the problem/investment, you may not need to go through all phases, or you may be able to group them together. However you approach the business case, you will need to answer the same questions and fulfil the same requirements.

The phases are:

  • point of entry
  • strategic case
  • programme business case
  • single-stage business case, which combines:
    • indicative business case (IBC)
    • detailed business case (DBC).

If the proposed investment is very high risk and complexity, you may choose to do a separate IBC before beginning a DBC.

Find out more about the phases and when you would undertake them

Who should use the Business Case Approach?

This guidance is primarily for organisations in the transport sector who are seeking investment from the National Land Transport Fund (NLTF) through the National Land Transport Programme (NLTP), such as councils, territorial authorities and the Transport Agency itself. It is also for consultants who may be involved in developing business cases for their transport sector clients.

The BCA should also be followed by organisations preparing activity management plans (AMPs) and regional land transport plans (RLTPs). 

Find out more about applying the BCA to RLTPs

Principles

Underpinning the BCA are the following principles.

Investing for benefitsInvesting for benefits

Investments are made to obtain organisational benefits. An investment should: contribute to the organisation’s strategic outcomes, represent value for money, and deliver benefits for customers.

clarity of intent

Clarity of intent

The intention driving an investment must be clear. Simple concepts and plain language will provide a clear understanding of the problems and benefits.

fit-for-purpose effort icon

Fit-for-purpose effort

The level of effort required to develop a business case must be proportionate to the complexity and risk of the problem and the proposed investment.

Fit-for-purpose effort graph

The diagram above illustrates how you should match your level of effort to the level of risk and complexity. 

Behaviours

These behaviours ensure the principles are applied correctly.

gathering information iconGathering information through informed discussions with the appropriate stakeholders

Successful investment management relies on gathering  knowledge through informed discussion between the people  who have the most knowledge of a subject. 

progressive icon

Building the case for investment progressively

The BCA relies on a structured, sequential approach to decision making, checking each phase as you go. All investments must follow the same line of enquiry.  

Capabilities 

These capabilities are essential to a successful BCA process.

Groundwork and context

Identifying a potential problem’s origin and exploring what work may have already been done will help you to better understand it and to define the likely benefits of investment.   

relationship management iconRelationship management

Gathering information through informed discussions with stakeholders is a key BCA behaviour. Effective stakeholder engagement also helps promote innovation and collaboration among stakeholders.

structure icon

Structure

Making sure everything is aligned and set up correctly enables efficient and effective use of resources and minimises risks.  

Investment decision gates

The Transport Agency assesses the proposed investments at the end of the strategic case, programme business case and single-stage business case phases (or after both the indicative and detailed business case, if you are doing them separately). It uses the 16 investment questions and the Investment Assessment Framework (IAF). This is called an investment decision gate, and ensures that the investment will be cost-effective and aligned to the strategic priorities of the government as outlined in the Government Policy Statement on Land Transport (GPS). Based on the outcome of the assessment, the problem owner and investor(s) decide whether or not it is worthwhile continuing with the business case.

Find out more about effective and aligned business cases 

Tools

Learning modules 

Online learning modules have been developed by the Transport Agency, and are available to our partner organisations. To request access to the modules, email nltp@nzta.govt.nz with your name, title, organisation and manager’s name.  

The introductory ‘Business Case Approach (BCA)’ course includes:

  • Business Case Approach (BCA) the essentials
  • Business Case Approach (BCA) – the principles in action

Go to the Business Case Approach (BCA) learning modules (external link)

To open the course, click the link above and then click ‘enrol’. You will be prompted to enter your log in. Once you have logged in, you should be taken directly to the course. You can also find it by going to the catalogue and searching for ‘BCA’. 

Information sheets 

These information sheets are designed to accompany the learning modules. 

Need support?

Use our contact form to send us a question, or get in touch with your NZ Transport Agency investment advisor.

Go to the contact and support form

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