Framework for investment performance measurement

Why measure investment performance

Investment performance measurement is important because it helps us (Waka Kotahi), and our investment partners) to:

• determine whether the investment has achieved its intended benefits
• learn from this for future investment decisions
• fulfil our respective reporting requirements
• be accountable for the money we spend on the public's behalf.

Role in transport planning and project delivery

Throughout all stages of the transport planning and project delivery process, it is essential to consider how performance will be measured. In particular under the BCA, early identification of measures for the expected benefits is a key step in planning an investment.

Once the activity has been implemented, Waka Kotahi will use the measures to review the performance of the investment. This will show whether the investment is a success and will help to shape future investments.

The structure of the performance framework

To make it easier to measure investment performance, Waka Kotahi has developed a framework for this purpose.

Components of the framework:

• The framework consists of five outcomes that align with the Ministry of Transport’s (MoT) Transport Outcomes Framework - economic prosperity, environmental sustainability, healthy and safe people, inclusive access, and resilience and security.
• Layers provide additional structure.
• Each outcome class is further split into investment benefits.
• The investment benefits are populated with performance measures.

While working with the framework throughout the BCA, it is important to also consider which Government Policy Statement(external link) (GPS) results the activity will contribute to, as this information is required as part of the funding application. 

Benefits of the framework

The key benefits of the investment performance measurement framework are:

• It provides a structured set of measures so that users are no longer obliged to come up with their own
• It is politically robust, so that while strategic priorities, and therefore the investment focus, may change over time, the framework itself will remain valid
• The framework may be used throughout the entire investment process, ie for developing the strategic case, including investment logic and benefits mapping, as part of the BCA, when preparing a funding application (together with GPS impacts) and for benefit realisation reviews.

To identify which activities require performance measures see Activities required to have performance measures.

How to select measures

In the early stages of business case development, as part of the problem identification and benefits mapping workshops, approved organisations and Waka Kotahi (state highways) will select initial measures for each of the benefits the investment is expected to deliver. These measures will be included in the strategic case and will need to be revisited and firmed up as the business case progresses.

The process is as follows:

1. Workshop participants will identify which outcomes are relevant for each of the expected benefits from the investment.
2. The participants will then identify the investment benefits to be targeted by the investment, and finally the appropriate measures.

Please see below for an illustration of how this fits into the BCA process.

List of measures

A list of performance measures is  available for the outcome classes:

• economic prosperity
• environmental sustainability
• healthy and safe people
• inclusive access
• resilience and security.

The research behind the framework

Waka Kotahi has based the investment performance measurement framework on sound research, including international best practice.

Research report 522: Blueprint for a best practice measurement indicator set and benchmarking sets out this research and is available at http://nzta.govt.nz/resources/research/reports/522/index.html(external link)