The strategic case answers the questions:
• What is the compelling case for change?
• What are the benefits?
Why is the strategic case important?
In the five-case model, the strategic case is the foundation, as it sets the scene for everything else.
The strategic case iteratively establishes whether there is a valid case for change. The case for change is established through four key actions:
- Develop the problems (or opportunities) to be addressed and the benefits to be achieved).
- Determine the strategic context within which the investment is being considered, including whether addressing the case for change is well aligned to strategic priorities.
- Undertake an initial assessment of risks and uncertainties.
- Develop the investment objectives that will inform decisions about the best-value option.
It’s worth putting appropriate effort and critical thinking into getting the strategic case right. If the case for change is flawed, or if the investment objectives don’t reflect what’s really needed, then it’s unlikely the investment will be fully effective. When business cases struggle to progress, the root cause can often be traced back to gaps or flaws in the strategic case.
The case for change
The main purpose of the strategic case is to confirm whether:
- there is a compelling case for change to investigate further; that is, evidence confirms there is a problem, and the scale and urgency of the problem warrant a response
- key stakeholders are aligned and behind the need to address an agreed problem
- agreement is forming on what a good outcome looks like and what benefits could be gained, before effort is spent on investigating solutions.
Strategic cases can avoid wasted effort where agreement is not reached, or where stakeholders agree that the problem is not significant enough to proceed at this time. This decision can be made at any point during development of the strategic case.
Defining problems and benefits
A key action in developing the case for change is to understand and clearly communicate what is driving the need for investment.
Strategic cases all look and feel slightly different, but it is essential that your strategic case includes a clear and concise description of the problems (or opportunities) that the investment will address, and the benefits that can be expected. The problems and benefits form the foundations of your business case, so they must also be tested against evidence to make sure they are valid.
A note about opportunities …
Problems and opportunities can be thought of as opposite sides of the same coin; solving problems can create opportunities, and ignored opportunities can create future problems.
For simplicity, the word ‘problem’ is used in the BCA to mean ‘the gap between the current state and the desired future state’. Business cases can consider opportunities as well as problems, but they still need to be framed in terms of the gap to be addressed, including underlying causes and consequences.
When you start planning your approach to problem and benefit definition, it’s important to think about how you will engage with partners and/or stakeholders. Use your engagement planning to identify stakeholders you want to collaborate or partner with, or who may hold specialist knowledge that will help you understand the investment.
Where possible, plan to include these stakeholders in the process of defining problems and benefits, as well as the strategic context for the investment. Finding ways to involve key stakeholders in these early steps will help strengthen your investment story, and can also build relationships that will support development of the rest of the business case.
For more information on how engagement relates to the strategic case, see the section on engagement below.
As a minimum, your strategic case should provide a clear understanding of:
- the problems the investment has to address, including:
- a clear cause and consequence for each problem
- evidence to confirm the cause(s) and consequence(s)
- whether the problem needs to be addressed at this time, and
- whether the problem is specific to this investment, or part of a broader problem
- the benefits that can be expected, if the investment is successful in addressing the problem(s), including:
- whether the benefits are of high value, for example by addressing local or national strategic priorities
- appropriate measures that will provide reasonable evidence the benefits are being achieved, and
- whether the benefits are attributable to the investment.
Waka Kotahi has developed the Land Transport Benefits Framework to guide the identification of benefits for investments seeking funding from the National Land Transport Framework (NLTF).
Land Transport Benefits Framework
For more information on defining problems and benefits, see our detailed guidance.
Defining problems and benefits
The strategic context
The strategic case must establish the strategic context, which is how the proposed investment aligns with the existing strategies of the partner organisations, including existing and future operational needs. Acknowledgement of the national, regional and local strategic environments strengthens the contextual need for any investment.
The strategic context also includes evidence that describes the environment within which the investment will be made, such as any relevant geographical features, constraints, interdependencies, or potential sources of risk or uncertainty.
For more information on developing the strategic context, see our detailed guidance.
Developing the strategic context
Risks and uncertainties in the strategic case
A key focus throughout the five-case model is to identify and manage risks and uncertainties.
Although they are closely related, risks and uncertainties are typically managed in different ways within the BCA. For a detailed overview of how risks and uncertainties are treated throughout the five-case model, including definitions and templates for risk and uncertainty registers, see our detailed guidance.
Risk and uncertainty in the five-case model
Risks and uncertainties can arise within each of the five cases. As work on the business case progresses, risks and uncertainties must be identified, recorded and tracked. You should also capture the proposed approach to managing each risk or uncertainty, which will ultimately form a key focus for the management case.
It is good practice to set up registers to track risks and uncertainties from an early stage in the business case. The registers continue to be used throughout development of the business case to capture risks and uncertainties from all of the cases.
The strategic case needs to identify key risks or uncertainties that relate to the case for change and affect the need for investment. These are risks or uncertainties which could affect:
- the problem, for example confidence in evidence data sets, event frequencies
- the benefit/outcome, for example growth assumptions, community appetite
- context, for example desktop geographic assessments, climate change impacts.
Developing investment objectives
Investment objectives describe what the investment is intended to achieve. Setting investment objectives is a key action in the strategic case, and informs the later assessment of potential alternatives and options.
The investment objectives are key inputs for developing the economic case. They represent important criteria for use in multi-criteria assessment (MCA) of alternatives and options, because they are good indicators of the effectiveness of each option.
For further information on developing investment objectives, see our detailed guidance.
Developing investment objectives
Developing your strategic case
As discussed above, it’s important to use the strategic case as the foundation for the remaining cases from the five-case model. However, it is likely you will need to revisit the strategic case – sometimes more than once – as the rest of your business case develops.
Focusing on the subsequent cases before the strategic case is likely to predetermine a preferred option, and will likely result in rework, or significant gaps in your business case.
Understanding the relationship between the strategic case and the development phases that are typically used to build a business case, can help to right-size the effort and plan work accordingly.
When is the strategic case developed?
The strategic case is usually developed as a first step in a programme business case (PBC), an indicative business case (IBC) or a single-stage business case (SSBC).
Occasionally it can be developed as a stand-alone phase (the strategic case phase). For more information about when you might consider a standalone strategic case phase, see our detailed guidance.
Strategic case phase
Is the strategic case developed all in one go?
This depends on how simple – or complex – the investment is, and how much risk or uncertainty is involved:
- very simple investments, with low risk and low uncertainty, may only need one iteration to develop everything that’s needed for a strategic case
- more complex investments, or ones where risk or uncertainty are high, will almost certainly need the strategic case to be revisited from time to time, as the business case develops.
For example, if you are working on a business case for a programme of investments, you will almost certainly need to develop the strategic case in more than one development phase.
You will need to start by establishing the case for change and objectives for the overall programme; then, as each activity in the programme is developed further, you will need to revisit the strategic case for that activity.
Example: improving safety in an urban area
In a programme being developed to address safety concerns for part of a major urban area, one of the system-level problems could be stated as:
Road infrastructure in the western suburbs falls well below current standards, resulting in a high level of fatal and serious crashes.
While that might help when making decisions about the best-value programme of interventions needed, it tells us nothing about what is wrong at each location on the network, throughout the western suburbs. When it comes to looking at a specific intersection or link, identified in the programme to address due to a high number of fatal and serious injury crashes, we need to understand more about what is causing the crashes at that location before we can find the right solution. To help with that, the problem at an intervention – or activity-level could be stated as:
The intersection between North Road and West Road has poor sight lines, leading to preventable crashes and increased crash severity.
Similarly, while benefits for the programme might be stated at a whole of network level when considering the programme, more detail about the available benefits at the location of each activity in the programme will help when making choices about the appropriate solution.
This iterative approach is needed because:
- In general, the strategic case supporting a programme will focus at a whole of system level, whereas activities need to be more specific, for example to a point or area on a network
- There may be quite a bit of time between finishing the PBC and developing the business case for the some of the later activities. It’s possible something has changed; for example, the strategic context may have changed, meaning the investment now needs to achieve different things from what was originally considered. Reconsidering the strategic case can help to identify if the programme objectives are still valid, or if the activity may need to take a different focus from that shown in the PBC.
Can existing work be used as a strategic case?
Yes – we expect that the strategic case will draw on existing work, at least to start with. As the business case develops, though, you will probably need to carry out further analysis and evidence-gathering to test the initial view of the strategic case.
To check if the existing work covers everything that a strategic case needs to cover, carry out a gap analysis on the existing work:
- Are there evidence-based problems and benefits?
- Does it accurately describe the strategic context for the investment you are considering?
- Is that context up to date, or does it need revisiting?
- Are there clear, measurable investment objectives, that can be used to make choices about the best option to use?
- Is there agreement from partners and stakeholders?
If the answer to any of those questions is no, then you will need to address any gaps. That doesn’t necessarily mean starting over, but you need to address the gaps before trying to move on.
There must be adequate evidence to show that each problem is real, and that there is a logical link between the causes and the end consequences of each problem. Even if the existing work establishes a strategic case, it’s important to look at it objectively and ask whether it meets the standard required for a business case. One way to do that is to use the 16 investment questions (see ‘Assessing the strategic case ‘below).
What level of detail does the strategic case need in each phase?
A key principle of the BCA is that business cases are developed progressively. This means there will sometimes be more than one place where work is needed on the strategic case. This is because the business case will need different things from the strategic case as it develops and as understanding of the investment grows.
Within each phase of development, the key actions you need to focus on for your strategic case will depend on a number of things, including:
- the business case phase you are in
- the pathway being used to develop the business case from start to finish, and
- the complexity, risk and uncertainty associated with the business case.
The table below illustrates how the focus and level of detail needed in the strategic case can change as the business case progresses from one phase to the next. For more information on each phase, select the relevant link from the first column.
Focus of the strategic case in business case development phases
||Focus of the strategic case
Point of entry phase
- Develop a high-level understanding of the key strategic drivers behind the investment.
- PoE does not require detailed problem and benefit definition (for example ILM); however, if problems and benefits already exist from elsewhere then summarise them in the PoE, along with a clear statement of what gaps remain to be addressed (eg further evidence or analysis needed).
- Identify any known risks or uncertainties and show how the scope of work for the next phase allows for these to be clarified and managed.
Programme business case phase
- Identify the system-level problems and benefits that the programme needs to address/achieve.
- Identify the strategic context for the programme.
- Identify and agree the investment objectives for the programme.
- Develop a detailed understanding of risks and uncertainties that need management at a programme level.
Indicative business case phase
and early single-stage business case phase
- Refine the problems and benefits at an activity level.
- Identify any aspects of the strategic context and/or strategic alignment specific to the activity (eg any key interdependencies with other projects, where these are not already identified in a programme).
- If needed, refine the investment objectives to assist option selection at an activity level.
Detailed business case phase
and late single-stage business case phase
- Refine strategic case actions from IBC to make sure they are still valid – especially if there has been a significant change in policy direction, or elapsed time, since the IBC.
Note: if you are going straight from PoE to IBC or SSBC, the above actions will be ‘develop’ instead of ‘refine’.
In a limited number of cases, the strategic case can be developed as a ‘stand-alone’ phase of business case development. This is usually done immediately following the PoE phase, and before starting work on any other phases.
Situations where it could be useful to consider a stand-alone strategic case phase include:
- where there is a need to do a significant amount of further work to fully understand the nature of the problems, or the available benefits, before committing further resources to developing the business case
- where you need to communicate the intention behind the investment to key stakeholders and decision-makers at an early stage, to make sure there is broad agreement to the need for investment before continuing.
If you think there may be value in using a stand-alone phase to develop your strategic case before continuing further, you should contact your Waka Kotahi investment advisor to discuss.
For further guidance on using a stand-alone strategic case phase, read our guidance page:
Strategic case phase
What does engagement look like in the strategic case?
Engagement with stakeholders plays a key role in the development of the strategic case. The greater the potential impact on stakeholders is likely to be, the more value there will be in seeking to collaborate with or involve those stakeholders in more meaningful ways.
- Decide up-front whether you should seek to partner with any of the stakeholders (if this is not already clear from the PoE).
- Seek input from stakeholders to help you understand the strategic context for the business case, including key opportunities and constraints. This may also help draw out suitable stakeholders that would make valuable partners.
- Decide which stakeholders you should include in problem and benefit definition workshops. If needed, be prepared to give them guidance on how that works and what’s expected.
- If it’s not practical to involve stakeholders directly in workshops, think about how you could capture their understanding of the problems and benefits. For example, you could run an investment logic mapping (ILM) workshop then meet with stakeholder groups separately to ask them if the results make sense to them.
For more information about engagement, see our detailed guidance.
Engagement and the Business Case Approach
Assessing the strategic case
How do I know if the strategic case is complete?
This will depend on which phase you are working on, how complex the investment is, and how much risk or uncertainty is involved.
However, there are a few things that can help you, including:
- Talk to your Waka Kotahi investment advisor. It’s important to work with your investment advisor throughout the strategic case. They will be able to help you get the level of detail right and avoid missing any important steps.
- Check against the 16 questions, which have been developed to help business case practitioners understand when they have done enough. The first eight questions relate to the strategic case, and are designed to test:
- whether the problems and benefits are clearly understood and are supported by evidence
- the level of stakeholder agreement.
How to self-assess your business case
What does Waka Kotahi look for in a strategic case when assessing a business case?
When assessing applications to fund business case phases from the NLTF, Waka Kotahi will seek assurance that the strategic case has been adequately developed.
As a principles-based approach, there is no checklist of specific actions to follow to ensure that Waka Kotahi’s expectations regarding the strategic case are being met. However, when assessing funding applications for business case phases, there are some general questions that assessors will consider to ensure that the principles relating to the strategic case are being followed, including:
- Are there clear descriptions of one or more problems, which:
- identify the underlying cause of each problem
- identify the end consequence or effect of the problem, and
- accurately reflect the evidence?
- Are there clear descriptions of one or more benefit that can be expected, if the problems are successfully addressed, which:
- are consistent with the Waka Kotahi benefits framework
- are accompanied by one or more measures
- can reasonably be attributed to the solution (when known)?
- Is there an assessment of the degree to which the benefits align with strategic priorities? Waka Kotahi will look for a clear alignment to Government Policy Statement on Land Transport (GPS) priority outcomes when prioritising next steps for NLTF funding.
- Are there one or more investment objectives, which:
- are clearly derived from the problems and benefits, and
- are stated in SMART (specific, measurable, achievable, relevant, timebound) terms?
- Is there evidence that stakeholders have been engaged at an appropriate level when developing the strategic case?
Resources and further information
Contact either your Waka Kotahi investment advisor or email the Business Case Process team at firstname.lastname@example.org