“If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions”
Albert Einstein
How to develop appropriate Investment Objectives for Transport Business Cases
While the Waka Kotahi Business Case process is well established in New Zealand, Investment Objectives can still be problematic.
This is no surprise.
Investment Objectives are not a simple standalone statement. Rather they need to be SMART, have KPIs, baseline data and realistic and relevant targets. Without these, they are neither meaningful nor useful.
Below is a quick summary of what Investment Objectives are, and some tips to ensure that the Investment Objectives you set are meaningful and have the highest chance of obtaining funding for appropriate investment.
Firstly, why are Investment Objectives so important?
Investment Objectives provide certainty for what a particular business case or transport treatment is trying to achieve and serve to specifically estimate and understand the return on investment.
While benefits are important and set at the start of the business case, Investment Objectives are used throughout the entire process of the business case.
The not so secret Investment Objective formula
The formula for Waka Kotahi Business Case Investment Objectives is straight forward. It sounds like a good cake recipe!
· Take the effect of the problem
· Add wording from the benefit
· Ascertain baseline data
· Estimate outcome
Combine these all together to create a SMART Investment Objective.
Simple! All of this information can be found in the Invest Hub area of the Waka Kotahi website.
Three tips for setting Investment Objectives that work
Of course, things are never that simple, and there is a range of complexities that can impact the effectiveness of the Investment Objectives. Below are five tips to help set Investment Objectives…enjoy!
· Spend time on the percentage weightings: Business cases by their very nature are based on trade-offs between different problems (often modes or safety). With accurate and well sought out weightings, that key stakeholders have bought into, you can ensure that the most appropriate investment objectives for the problem are weighted higher.
· Spend time understanding the baseline: It is often difficult to find data to provide a baseline. Without a baseline, it is difficult to ascertain how effective investment has been. Take time to thoroughly understand the baseline and identify and mitigate evidence gaps if one exists.
· Think about monitoring: The first question to ask is how easy is it to monitor the outcome? In the case of safety, it is relatively straight forward. For the perception of public transport services, it will be more subjective and involve surveys. Think about the work involved and ensure that monitoring is crystal clear and feasible.
· Timing is important: While it is tempting to set monitoring of outcomes in the long term (eg 10-15 years) this impacts the effectiveness. For a period over a decade, there can be policy changes, increased infrastructure that contributes to change and possibly a change of Government Policy Statements. As such look at five years maximum post-construction.
· Keep rechecking: Always keep rechecking and revisiting your Investment Objectives as you progress through the business case process – if a change is noticed then raise it with the key stakeholders and the business case team.
Bringing it all together
Investment Objectives are key to a successful business case. Their development is something that can’t be rushed.
Like with any good planning, think with the end in mind when developing up your Investment Objectives, and take key stakeholders on the journey. Spend time working through the weightings, make sure that there is a solid baseline to assess changes off and think about monitoring and timing.
Do this, and you will set the business case up for success😊
Transit Trends · Andrew Collings, KA Advisory. Read and comment on the original on LinkedIn.
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