The strategic case answers the questions:
• What is the compelling case for change?
• What are the benefits?
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:
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 main purpose of the strategic case is to confirm whether:
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.
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:
NZ Transport Agency Waka Kotahi (NZTA) 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 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
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:
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
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.
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.
This depends on how simple – or complex – the investment is, and how much risk or uncertainty is involved:
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:
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:
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).
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 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.
Phase | Focus of the strategic case |
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|
|
|
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Indicative business case phase and early single-stage business case phase |
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and late single-stage business case phase |
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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:
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 NZTA investment advisor to discuss.
For further guidance on using a stand-alone strategic case phase, read our guidance page:
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.
For example:
For more information about engagement, see our detailed guidance.
Engagement and the Business Case Approach
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:
How to self-assess your business case
When assessing applications to fund business case phases from the NLTF, NZTA 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 NZTA'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:
Contact either your NZTA investment advisor or email the Business Case Process team at businesscaseprocess@nzta.govt.nz