<<Region Name>> Regional Workshop BCA (LA7) November 2015 RTU Road Transport Unit
Workshop Overview Purpose To increase understanding of the business case approach in transport decision making. RTU Road Transport Unit 2
Workshop Overview • Review of previous workshop • BCA – Why do it? • BCA– Overview • Applying the BCA to Maintenance & Renewals • BCA AMP – Working through a local example Agenda • Using the BCA to agree the need for change • The ‘full’ BCA • Working through a practical example from Christchurch City Council • Updates / New Info / Review • Looking ahead – action learning and support • Feedback RTU Road Transport Unit 3
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A business case approach… RTU Road Transport Unit 5
Why • Land transport delivery model unchanged since 1989. • Expenditure increases 2003 – 2010 not sustainable. • GFC 2008 • GPS 2012 & 2015 RTU Road Transport Unit 6
What’s driving the ONRC? Our costs have increased at an unsustainable rate … RTU Road Transport Unit 7
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Pressures in achieving the GPS for Transport Effec@ve& Efficient&delivery& movement&of& of&the&right& people&&&freight& infrastructure&&& e & Environmental&Pressure& services&to&the& r u s s e right&level&at& r P & c i m o best&cost& n o c E Safe&and& sustainable& network& Social/Cultural&Pressure& To#drive#improved#performance#from#the#land#transport#system# • Road#safety# • Economic#growth#and#produc9vity# • Value#for#money# RTU Road Transport Unit 9
Transport System is backbone of our economy • Business Growth Agenda Raise ratio of exports to GDP from 30% to 40% by 2025 o • Issues for road asset management: Changing demographics o Land-use changes o Increasing costs of input o Aging of existing pavements and bridges o Funding limitations o Increased traffic volumes and heavier vehicles. o Increased level of service expectations of road users o RTU Road Transport Unit 10
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Our Opportunity • Better value and performance through collaboration and best practice asset management • Improved reputation of local government through better investment decisions • Being able to better tell the story around why investment is the right thing to do RTU Road Transport Unit 12
Our Opportunity…Our Challenge • A change in thinking for all of us • More sophisticated asset management • More comprehensive and optimised decision making • Applying and developing appropriate technologies • Foster and enhance a ‘smart-buyer’ philosophy – Clients who can more confidently acquire the best value for money for road users RTU Road Transport Unit 13
Potential to Save through Right Strategic thinking & Best Practice Strategy/ Design/ Implementation/ Planning/ Procurement/ Construction/ Policy Supervision, etc Maintenance & Operations Potential $ savings $ $ Emphasis - Right strategic thinking & Best practice advice RTU Road Transport Unit 14
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Transport System Relationships Community / User Government Policy Strategic DirecEon Input Statement State Highway Plans Council Annual & Long Business Case Approach Term Plans SERVICE DELIVERY Network OperaEng Plan Road CUSTOMER LEGISLATION USERS Road Design FuncEon PROMISE & Form FuncEonal ClassificaEon ONE NETWORK ROAD CLASSIFICATION RCA Planning Processes Ac#vity Management Plans Regional Transport Programme Investment Decision Making NaEonal Land Transport Programme (NZTA Investment & Revenue Strategy) RTU OperaEonal Delivery Road Transport Unit (Opera#ons & maintenance / Capital works)
A business case approach… RTU Road Transport Unit 17
A business case approach…what is it? • A toolkit adapted for the NZTA from NZ Treasury’s ‘Better Business Case’ model. • A structured way of, step-by-step, building up an investment story. • A way of working together. • It is not a prescriptive process to access funding. RTU Road Transport Unit 18
A business case approach…what is it? Supporting Principles • Quality analysis • Thinking not writing • Fit for purpose effort • No surprises • Aligned to other management processes RTU Road Transport Unit 19
A business case approach…what is it? Leads to … • Better strategic alignment • Better achievement of outcomes • Better informed decisions • Better value for money • Better management of risk RTU Road Transport Unit 20
A business case approach…what is it? Leads to … • Evidence based assurance • Early engagement and influence on direction • Common language • Clear expectations with flexibility and permission to take a risk based, right sized approach RTU Road Transport Unit 21
The typical business case framework for maintenance, renewals and capital projects Activity Strategy Programme Indicative Detailed Pre- Strategic Point of Entry Strategic Case Business Case Business Case Business Case implementation Assessment Facilitates Confirms the Outlines fit Confirms the Final Outlines fit More an initial with case for case for detailed requirements with discussion change and strategy change and in order to strategy analysis of on how the and case recommends recommends the implement and case process is the preferred for change the preferred (various for change preferred applied way forward programme outputs) solution and and project plans for mix delivery (or) Single stage business case under development RTU Road Transport Unit 22
Point of Entry map • Point of entry is the most critical phase of the business case approach • It is not just a template • It is about applying judgement and good practice RTU Road Transport Unit 23
Operations, Maintenance & Renewals Business case approach…the fit for purpose approach Strategy Programme Activity Strategic Indicative Detailed Pre- Point of Entry Strategic Business Assessment Business Case Business Case implementation Case Case RTU Road Transport Unit 24
Operations & Maintenance BCA Strategy Strategic Programme Case Business Case Change in strategic context, Optimised programme to Definition of problem & Asset MP delivers required including right sizing of address problem & Business as benefits LoS within strategic context programme business case. usual Activity Management Plan Learning & Continuous Improvement RTU Road Transport Unit 25
The Business Case Approach It progressively builds an investment case by: • identifying the core problem • identifying the consequences of not addressing it • better identifying the benefits to be gained by investing in its solution. RTU Road Transport Unit 26
Maintenance, Operations & Renewals Strategy Strategic Case • Through existing strategies and AMP Understand your current context • ONRC & CLoS provides some the the context • Growth, demand (current & future), DP, NOP/NIP • Are you on the right track? Understand the ‘why’ • Do you need more info or is the info you have already in your AMP? • Do you fully understand the LOS you are providing? Problem Definition • Do you clearly understand the current and future requirements? • What is the compelling case for change (if any)? Benefits Defined • Or … reconfirm that the current AMPs approach is good. • Test existing assumptions, data, and AMP direction against the Strategic Case. • Do you understand your performance against the Develop your Strategic Case CLoS and PM? • Test current LoS against ONRC classification & CLoS RTU Road Transport Unit 27
A business case approach… RTU Road Transport Unit 28
The Business Case Approach ‘Checking in again’ Structured process that integrates • best practice decision-making • programme management • investment tools RTU Road Transport Unit 29
Strategic Case Network demand/changing land use Network Operating Plans (where relevant) BCA - CLoS & PM Activity Management Asset Management Plan (existing) Plan Asset Condition & Delivery KPIs ONRC (functional Classification) RTU Road Transport Unit 30
BCA in Activity Management (O&M / Renewals) Activity Management Plan These will help inform development Strategic Context Strategic • RCA Strategies Case • Why it is • Regional strategies Problem Definition needed • GPS Transport Benefits Defined • Performance • Asset • Inventory Condition Programme Strategic Response • Condition assessments • How its Case • Treatment options Asset Management Planning operated • Classification • Existing maintenance plans CLoS & PM (data) • Network operating plans RTU Road Transport Unit 31
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