Workshop Overview Purpose To increase understanding of the business - - PowerPoint PPT Presentation

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<<Region Name>>

Regional Workshop BCA (LA7) November 2015

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Workshop Overview

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To increase understanding of the business case approach in transport decision making.

Purpose

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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
• 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

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Agenda

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A business case approach…

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• Land transport

delivery model unchanged since 1989.

• Expenditure

increases 2003 – 2010 not sustainable.

• GFC 2008
• GPS 2012 & 2015

Why

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What’s driving the ONRC?

Our costs have increased at an unsustainable rate…

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To#drive#improved#performance#from#the#land#transport#system#

• Road#safety#
• Economic#growth#and#produc9vity#
• Value#for#money#

Safe&and& sustainable& network& Efficient&delivery&

• f&the&right&

infrastructure&&& services&to&the& right&level&at& best&cost& Effec@ve& movement&of& people&&&freight&

E c

• n
• m

i c & P r e s s u r e & Environmental&Pressure& Social/Cultural&Pressure&

Pressures in achieving the GPS for Transport

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• Business Growth Agenda
• Raise ratio of exports to GDP from 30% to 40% by 2025
• Issues for road asset management:
• Changing demographics
• Land-use changes
• Increasing costs of input
• Aging of existing pavements and bridges
• Funding limitations
• Increased traffic volumes and heavier vehicles.
• Increased level of service expectations of road users

Transport System is backbone of our economy

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• 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

Our Opportunity

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• 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

Our Opportunity…Our Challenge

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Potential to Save through Right Strategic thinking & Best Practice

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Strategy/ Planning/ Policy Implementation/ Construction/ Maintenance & Operations Design/ Procurement/ Supervision, etc Potential savings Emphasis - Right strategic thinking & Best practice advice

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Transport System Relationships

RCA Planning Processes

Ac#vity Management Plans

Regional Transport Programme NaEonal Land Transport Programme

(NZTA Investment & Revenue Strategy)

OperaEonal Delivery

(Opera#ons & maintenance / Capital works)

Strategic DirecEon Government Policy Statement Community / User Input

Investment Decision Making

State Highway Plans Council Annual & Long Term Plans SERVICE DELIVERY LEGISLATION CUSTOMER PROMISE ONE NETWORK ROAD CLASSIFICATION

FuncEonal ClassificaEon Network OperaEng Plan Road FuncEon Road Design & Form

USERS

Business Case Approach

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A business case approach…

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A business case approach…what is it?

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• 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.

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A business case approach…what is it?

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Supporting Principles

• Quality analysis
• Thinking not writing
• Fit for purpose effort
• No surprises
• Aligned to other management processes

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A business case approach…what is it?

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Leads to…

• Better strategic alignment
• Better achievement of outcomes
• Better informed decisions
• Better value for money
• Better management of risk

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A business case approach…what is it?

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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

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The typical business case framework for maintenance, renewals and capital projects

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Point of Entry Strategy Strategic Case Programme Business Case Activity Strategic Assessment Indicative Business Case Detailed Business Case Pre- implementation

Confirms the case for change and recommends the preferred programme and project mix Outlines fit with strategy and case for change Outlines fit with strategy and case for change Confirms the case for change and recommends the preferred way forward More detailed analysis of the preferred solution and plans for delivery Final requirements in order to implement (various

• utputs)

(or) Single stage business case under development Facilitates an initial discussion

• n how the

process is applied

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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

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Activity Strategic Assessment Indicative Business Case Detailed Business Case Pre- implementation

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Point of Entry Strategy Strategic Case Programme Business Case

Operations, Maintenance & Renewals Business case approach…the fit for purpose approach

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Operations & Maintenance BCA

Change in strategic context, including right sizing of programme business case. Definition of problem & benefits Optimised programme to address problem & Business as usual Asset MP delivers required LoS within strategic context

Strategy Strategic Case Programme Business Case

Activity Management Plan Learning & Continuous Improvement

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The Business Case Approach

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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.

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Maintenance, Operations & Renewals

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Understand your current context

• Through existing strategies and AMP
• ONRC & CLoS provides some the the context
• Growth, demand (current & future), DP, NOP/NIP

Understand the ‘why’

• Are you on the right track?
• Do you need more info or is the info you have already

in your AMP?

• Do you fully understand the LOS you are providing?
• Do you clearly understand the current and future

requirements?

• What is the compelling case for change (if any)?
• Or…reconfirm that the current AMPs approach is good.

Problem Definition Benefits Defined Develop your Strategic Case

• Test existing assumptions, data, and AMP direction

against the Strategic Case.

• Do you understand your performance against the

CLoS and PM?

• Test current LoS against ONRC classification & CLoS

Strategy Strategic Case

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A business case approach…

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The Business Case Approach ‘Checking in again’

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Structured process that integrates

• best practice decision-making
• programme management
• investment tools

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ONRC (functional Classification) Strategic Case Network Operating Plans (where relevant) Asset Management Plan (existing) CLoS & PM Asset Condition & Delivery KPIs

BCA - Activity Management Plan

Network demand/changing land use

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BCA in Activity Management (O&M / Renewals)

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Activity Management Plan Strategic Case Strategic Context Problem Definition Benefits Defined

Asset Management Planning CLoS & PM (data)

• Inventory
• Condition

assessments

• Treatment options
• Classification
• Existing maintenance

plans

• Network operating

plans

• Why it is

needed

• Performance
• Asset

Condition

• How its
• perated

Strategic Response

Programme Case

• RCA Strategies
• Regional strategies
• GPS Transport

These will help inform development

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BCA in Operations & Maintenance

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Test existing AMP against Strategic Case

• Options developed
• Complete if the strategic case does not align with current AMP
• Look at refining the Strategic Response (not operational detail i.e.

chip seal vs. other treatments)

• What can be done at a National / Regional level, partnering,

etc?

• Do minimum, increase, decrease LoS
• Look at what is the best way to respond to the problem(s) -

Consideration needs to be given to non transport interventions

• Helps give clarity on where

funding should be focused. Activity MP aligns

• Minor refresh to make current.
• Continue with current AMPs approach - No further work.

Activity MP does not align

OR

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Workshop Session - The Business Case Approach

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Identify in your groups

• How will your AMP change

under the BCA?

• What extra information will you

need?

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A business case approach AMP…

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Observations and Challenges – Strategic Case:

• Keep it simple and concise
• Make sure you have a ‘point of entry’ discussion with

NZTA on your Strategic Case to right size your ‘effort’

• Traditional AMP language tends to be technical (need

to make sure anyone can pick up and understand the reason behind your programme)

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Observations and Challenges – Strategic Case:

• Aspirational nature of AMPs is a challenge under Business Case – Why?

– Aspirational goals and benefits are not the same thing, so this is where the biggest disconnect is in AMPs. Addressing a problem may not meet community outcomes or expectations. – AMPs need to temper community goals and aspirations with reality of costs of service provision – is this part of the problem?

• E.g. An aspirational goal could be to have every local road in the District with sealed

footpaths, but if one of your issues is constrained funding and increasing maintenance costs, is this realistic? This issue alone will make you think twice about your priorities for the programme. – The programme should be informed by the ‘scale’ of benefits gained from addressing issues and not led by aspirational goals. As such the value of applying the Strategic case is in right- sizing and filtering activity responses

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Document Expectations and Process:

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Workshop Session – BCA AMP

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Discuss in your groups how your current AMP incorporates the thinking of the BCA and what you would need to do to move to a BCA AMP.

Consider:

• Early collaboration between stakeholders
• Progressive development of a robust, evidence based

investment case.

• Identifying the core problem
• Identifying the benefits
• Identifying consequences of not addressing it

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Using the Business Case Approach to agree the need for change (<<NZTA PI>>)

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BCA Mtce/Opps/Renewals

What is affecting/ influencing network demand?

Change

Land use Demographics Economic activity Vehicle fleet Travel modes etc

Consequences:

Safety Economic growth Network efficiency Cost risk ONRC outcomes

Assess life cycle options to manage network effects:

Maintenance Renewal Traffic services Materials Procurement Business practices

Programme of work:

Levels of service ONRC measures

Activity Management Plan

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Example - Changing network demand

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Example - Changing network demand

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Example - Changing demand, What does it mean?

What do the change in traffic volumes mean (across all modes)

• Customer levels of service
• Activity planning
• Consequences
• Long term action planning

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Determining the point of entry

Getting Started

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“Facilitates discussion and agreement on how the business case approach will be applied”

It should:

• Set out what we think the investment question is, at a high level
• Identify what work already exists (relevant to this investment)
• Decide at what point the business case approach should be entered
• Identify who needs to be involved

– The business problem owner is accountable and responsible for the Point of Entry – beware

• f delegating!

What is the point of the Point of Entry?

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It’s not (just) a form...

• The PoE is first and foremost a conversation, to make sure we understand

where we are and how to proceed; the template is simply a tool to record the outcome of that conversation.

It’s not:

• A funding compliance step, i.e. ‘just another form to complete so we can get
• ur project going’
• A detailed statement of problems, benefits and project management

requirements

• An application for NLTP funding

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• A high-level description of what we think the overarching problem is – what are we aiming to

address?

• There is a high crash risk on the corridor between x and y
• Relocation of commercial activity is creating new pressures on the transport network and

affecting levels of service

• Traffic growth is affecting the vitality of the CBD

It’s not:

• A definitive list of detailed problem statements
• A complete history of a location or issue
• Tip: think about how you would introduce this problem at the start of an ILM workshop: answer

the question ‘what are we here to discuss?’ – then write it down

Description of the problem and benefits

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• What’s wrong with the following statement:

“We potentially have an opportunity to protect or remove poles on Harold Rd Sth Curve, protect or remove poles on Pool Rd Sth Curve, protect drop off and remove trees in Longwood Rd curves and install chevrons on curves. Example: Description of the problem and benefits

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• What has already been done?
• E.g. supported strategy, strategic case, Network Plan, programme business case etc.
• Does it give us
• Relevant strategic context (i.e. strategic objectives relevant to this investment)
• A good understanding of the problem (both cause and consequence) at a strategic level
• Clear benefits that are worth investing in – at a strategic level?
• What are the gaps?
• A list of possible solutions (or even interventions)
• Use this understanding to discuss and agree the appropriate starting point.

Pre-existing work and entry point assessment

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Point of Entry map

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• What are the governance / management arrangements?
• Who will manage the next phase of business case development?
• Who needs to sign off on the outputs?
• Who will facilitate the workshops?
• Internal or external facilitator? Accredited or not?
• Who will you invite to engage in workshops?
• Investor(s)
• Stakeholders
• Who holds the knowledge of the problem?
• Think about using tools like relationship mapping, whether one stakeholder can represent a range of views to keep

numbers manageable, what information can/ should be provided in advance?

• Remember – this is not consultation, it’s about engaging with the people who can best help understand the problem

Scoping the next steps – who to involve

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Workshop Session - The Business Case Approach

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In your groups consider the point of entry for BCA:

• Operations and maintenance
• Capital works / renewals

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A business case approach AMP…

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Business Case Approach & One Network Road Classification

How will they inform Council decision making and funding discussions?

Michael Jacobson 3/11/2015

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• Level of Service and Asset Lifecycle
• Examples of applying the ONRC
• Decision Flowchart
• Programme

Overview

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Curtesy of Auckland Transport

Level of Service and Asset Lifecycle

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District Plan Network Management Plan ONRC

Example – Bealey Avenue

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District Plan Network Management Plan ONRC

Example – Pepperwood Place

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Curtesy of Auckland Transport

Level of Service and Asset Lifecycle

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Policy Programme Case Indicative Case Detailed Case Implementation Strategic Case Disposal Operations and Maintenance Renewal and Rehabilitation Asset Creation Asset Planning STAGE / PHASE Business Case Approach Requirements Definition Condition Criticality Risk Assessment Renewal Programme Maintenance Programme Assessment Programme Asset Creation Programme Economic Analysis Strategic Priorities Demand Forecasting Inspections Disposal if required Construction and Commissioning Mitigation if required Design Programme Coordination Maintenance Design Network Planning Operations and Maintenance Asset Management Technical Services Project Delivery Strategy and Planning Asset Management Plan Strategic Assessment Portfolio Case Deliver maintenance and renewals Government Policy Statement Regional and Local Strategic Direction Direction Statement Construction ONRC Network Operating Plan District Plan Activity Management Plan Levels of Service Confirm funding via Regional Land Transport Programme and Long Term Plan processes Operations Procurement

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Calendar Year Month Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Agreed classification Trial and report outcome measures Trial and report performance measures Annual reporting against measures Review classification Submitt classification for 18/21 NLTP Strategic Business Case Strategic Business Case (maintenance and renewals) Programme Business Case (assess activity and asset management plans) Programme Business Cases (Projects) Indicative Business Cases Detailed Business Cases Submitt business cases for 18/21 NLTP Regional Programme developed Regional Programme submitted Regional moderation National moderation National Progamme adopted Christchurch Transport Strategic Plan Network Management and Operating Plan Asset Management Plan Infrastructure Strategy Activity Management Plan(s) Capital programme review Consultation Adoption One Network Road Classification Better Business Case National Land Transport Progrmme (indicative) Long Term Plan

RCA

2015 2016 2017 2018

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Strategic Case:

External drivers:

• Political
• Economic
• Social
• Technological
• Environmental
• Legal
• Competition

Existing transport activity

• People
• Freight

Mode choice

• Active
• Road
• Rail
• Air
• Sea

Current state of assets

• Age
• Condition
• Capacity
• Availability
• Risks

Identify which issues will best transform the activity to match future conditions/problems

(Transport planning role)

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Activity Management Plan

Issues to transform the activity to best match future conditions Impacts Current state of assets

• Age
• Condition
• Capacity
• Availability
• Risks

Current outcomes

• Safety
• Travel time reliability
• Accessibility
• Cost/ affordability/ value

for money

• Amenity
• Resilience/ Reliability

Benchmarking/ Comparisons with

• ther networks

High level options to address one or more issues For road maintenance will include:

• Balance of reactive &

planned maintenance

• Influencing travel choices &

behaviour

• Procurement
• Costs of activities &

specifications

• Materials
• Methods

Criteria to assess

• ptions

(Strategic Case Programme Case)

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Activity Management Plan Implementation (Asset Plan)

Planning of activities:

• Timing
• Costs/ procurement
• Expected results
• Review points to match expected rate of

change

• Risks
• Agility – e.g. to respond to unplanned events

(weather)

• Quality assurance

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Summary Review – BCA Activity Management Plans

Apply principles in a fit for purpose way

• We want to achieve:
• Problem, consequence and benefit

assessment for the network, informed by:

• Strategic context
• Stakeholder input
• Strategic assessment:
• Demonstrates clear investment story

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Summary Review - Application to Activity Management Plans

Optimise and test programme (deliver right activities, right time, right place):

• Identify alternatives and options
• Develop range of programmes
• Identify preferred programme, informed by:
• Strategic assessment, stakeholder input, LTP consultation
• Processes and tools to optimise (eg Network Operating Plans)
• Consideration of funding (alignment with GPS, long term

planning etc.)

• Set out proposed programme identifying optimal activities,

timing, price, alignment to LoS and standards

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BCA Mtce/Opps/Renewals

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Evolution

As a sector we are in a continuous improvement learning mode

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Putting some action in place

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• REG Capability and Enabling Work Stream and EquiP

is working on

• Action learning task
• Guidance material

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Updated material To help you communicate and share the story

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ACCESS

<25

<250k <250

SECONDARY COLLECTOR ARTERIAL REGIONAL

>800 >400 >300 >150 >25 40

15

6

>500k >250k <250k <250k >30k

>10k

>2k

>250

>1200

40

>3M >100k

NATIONAL PRIMARY COLLECTOR

• r sole connectivity

• New framework
• Categorises roads throughout

the country

• 1st time in NZ history to have a

consistent specification

• Considers needs of all road

users (motorists, cyclists, pedestrian)

• Give users more consistency

and certainty about the standard and services to expect

• Improve how we plan, invest,

maintain and operate

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Regional Workshops

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Regional Workshops

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Summary and Close

• Review

– List of expectations – Tabled items (if any)

• Feedback on the workshop? How can we improve it?
• Next Steps

– Terms of Reference finalised (with workshop outcomes)

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Erik Barnes

PO Box 2764, Wakatipu, Queenstown 9349 M: 021 997 863

erik@auxilium.co.nz

Chris Olsen

8 Moray Place Papakowhai Porirua 5024 P: 04 2339697 M: 0274 477098

chris@coconsulting.co.nz

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David Fraser

33 Tom Parker Ave Napier 4110 P: +64 6 8438095 M: 027 4739493

david@amsaam.co.nz