Concept Approval and Business Case - Department of Treasury

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Strategic Asset Management FrameworkApplicationSAMF therefore provides supplementary guidelines to support the main ACA andbusiness case method. The guidelines clarify, for example, the unique issues thatshould be addressed for ICT assets, for non-residential buildings, or to ensure thatland assembly issues are well covered in a business case to acquire or dispose ofa facility [forthcoming hyperlinks].To assist the proponents and reviewers of asset investment proposals to apply theSAMF model, the remainder of this module clarifies the sorts of key issues andquestions that should be addressed in each section of an ACA or business case.The shared objective should be to clarify the expected results, significant risks,and necessary action from the government’s perspective, as the investor onbehalf of the taxpayer.Executive SummaryThis section should outline: the purpose of the investment, the business problemthat would be addressed; the pros and cons of the recommended and alternativeoptions; and the key approvals and next steps.Clear advice should be provided on:• the most cost effective investment option that would best serve thegovernment’s policy, and an agency’s service delivery objectives; and the• alternative options, should decision-makers conclude that the first option doesnot have priority for investment at the levels of expenditure and risk proposed,or should future financial, economic or other capacity constraints preclude it.Examples of key approvals and next steps include that: action should commenceto acquire a parcel of land for the asset as a matter of priority; and that formalnegotiations should start with stakeholders.The advice should be presented in summary, rather than argued. The informationin the remainder of the ACA or business case should provide the necessarybacking.16Exposure Draft – December 2010
Concept Approval and Business CaseStatement of PurposeSection One: Strategic JustificationThis section must demonstrate that the investment proposal has a strongbusiness justification and high relative priority.The main points of reference are the government policies, demand drivers andprojections, and the service delivery objectives and model in an agency’sStrategic Asset Plan.The ACA or business case should not repeat the detail to be found in the SAP –but a clear, direct link must be shown.Question• What ranking does the proposal have in the list of highest priority investmentitems provided at the conclusion of the SAP?Section Two: Gap AnalysisThis section should clarify the weaknesses and strengths in an agency’s existingasset base and future service capacity that the investment proposal would target.The point of reference for the gap analysis should be the Current Review sectionin the Strategic Asset Plan.Concise reference should also be made to any emerging changes in state orfederal government legislation or regulation that relate specifically to theinvestment proposal – for example, in terms of OH&S or asset design quality andmaintenance standards.The gap analysis should cover the limitations and significant risks to servicedelivery caused by weaknesses in both existing assets, and related non-assetinitiatives.The focus of the gap analysis should not solely be on weaknesses – it should alsoidentify strengths that could be built upon to help address the gap.Questions• Which of the highest priority service delivery gaps and risks would theproposal address?• What are the strengths of the existing assets (and non-asset initiatives) uponwhich future capacity could be built?Exposure Draft – December 2010 17
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Concept Approval and Business Case - Department of Treasury

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