ANAO - Planning and Approving Projects

Approval roles and processes

Better Practice results: All elements of project proposals undergo competent review, and there is clear accountability for review and decision-making. Both of these contribute to subsequent implementation success.

Roles

An entity’s planning, review and decision-making arrangements relevant to approving projects can involve four broad roles:

Strategic – advising the entity head on strategic program delivery and ICT issues. This includes approving the program delivery strategy and the ICT strategy, and recommending aggregate annual spending in different areas, such as improvements to program delivery, to internal efficiency, shared infrastructure, and support of business-as-usual activities.
Resource allocation – making decisions on resource allocation, including investment decisions on project proposals.
Planning support – coordinating the preparation of strategies, assessing project proposals on their technical and business merits, and providing advice to support strategic consideration.
Technical – using specialist skills and knowledge to provide advice on technological directions for the entity, assisting project sponsors through specialist advice, and assessing proposals for technical feasibility and compliance with entity standards.

These roles are often carried out by committees, to provide a breadth of viewpoints, and develop a shared commitment to decisions. In larger entities there may be one, or more, committees covering each role. In smaller entities several roles may be combined. The technical role is usually separate, due to the specialist skills, and detailed discussions involved.

Elements of better practice for committee arrangements, relating to the effective review of project proposals, include:

Separating roles involving technical review from decision-making. This allows detailed matters, such as detailed ICT costing, ICT feasibility, and ICT architecture issues to be considered by relevant experts, leaving the decision-making body to focus on balancing priorities and assessing value-for-money based on reliable advice.
Advisory and decision-making roles are clearly articulated. This is important to provide clear accountability, particularly given that project proposals can be reviewed by several committees. Clarifying the nature of the assessment or endorsement to be provided by each committee will help focus each committee on the issues and help provide the decision-maker with a clear understanding of the scope of advice they are using, and any limitations or provisos on that advice.

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Processes to review project proposals

The roles mentioned above are generally elements of an assessment process, where particular issues are considered from various perspectives. Characteristics of effective assessment processes are that they:

are clearly described, and promulgated to staff;
make clear the decision points, and the prerequisites for advancing through the process; and
are ‘fit for purpose’ – that is, they are adapted to the needs and circumstances of the entity, based on consideration of such factors as the size and complexity of projects, the risks and potential impacts of projects, and the entity’s capability in planning and managing projects.

An example process for developing and assessing proposals is described briefly in the following table. This example process has two main stages – developing a project concept plan, and then a comprehensive business case. There can be many workable variations on these processes, depending on the size and responsibilities of the entity.

STEP IN PROCESS	VALUE ADDED DURING STEP
Concept stage
1. Project concept developed in business area	Identification of need and opportunity; clarification of specific outcomes to be achieved; testing of underlying logic at a broad level.
2. Endorsement	Confirms support of project sponsor.
3. Specialist assessment	Specialist advice on broad policy and ICT alignment, possibly indicative cost.
4. Clearance to proceed to business case	Agreement within the entity that the approved concept proposal targets an area of need and the cost of developing a business case is warranted.
Business case stage¹⁰
1. Prepare business case	Reliable outcome and cost estimates¹¹; assurance of feasibility; implementation and governance arrangements.
2. Endorsement	Confirms support of project sponsor and relevant stakeholders.
3. Specialist assessment	Assurance to decision-makers on specialist aspects (including technical and policy compliance / alignment, costing analysis).
4. Funding decision	Confirms the project as feasible and a worthy use of available funds; a clear decision point.
Note: Additional approvals will generally be needed prior to significant expenditure.

For larger projects, there may be a significant cost in preparing a reliable business case. In such cases there may be additional stages in the approval process. For example, a proposal taking a few weeks of effort to prepare may gain approval to develop a more detailed business case that takes (say) nine months to prepare. This more detailed business case would be of sufficient reliability to allow a decision on a significant investment.

Elements of better practice for the review and approval processes for project proposals, include:

Process for managing many proposals	Larger entities may consider a large number of proposals each year, and will benefit from having specifically designed and supported processes. Useful support for assessing many projects includes quality control of the supporting business cases, standardisation of key points of comparison for executive review, and streaming of similar projects to specific evaluation processes.
Projects with funding approved external to the entity (for example, in the Budget) have a process to review and refine project parameters	Some projects may be approved for funding outside the entity with some parameters only broadly defined – for example a project implementing a policy change, where the main focus has been on the policy aspects. Although the projects are funded, they will still benefit from review by the entity to refine project parameters and scheduling details.
Urgent projects are catered for	Having a defined exception process for urgent projects helps assure they still have appropriate review while being considered in a timely fashion. The exception process should also provide for appropriate recordkeeping for accountability purposes.
Very small, and very large, projects are catered for	Low-value and low-risk projects may be approved more efficiently by a single stage of review. Large and high-risk projects may benefit from being approved using a series of proposals of gradually increasing size, or by being divided into smaller sub-projects to better manage risk.¹²

Having defined the relevant approval roles and processes, the next issue is selecting the people to be involved.

10: Note: in some cases, having identified a broad concept an agency may go to the market to seek proposals for solutions. The responses may then be used as options within a business case, or the preferred response may be used as the basis for a business case.

11: The degree of uncertainty in costing will have been reduced since the concept stage. While some uncertainty may remain, the key point is that the estimates should be sufficiently reliable to support the action being proposed in the business case.

12: Implementation approaches are further discussed at page 72.

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Broad representation

Early representation pays

“I found the best part of our project planning was how we involved all the states in developing the system requirements. Implementation then went so much faster.”

… ICT executive involved with award-winning cross-jurisdictional project.

Better Practice results: Improved reliability of information to decision-makers and improved cooperation from stakeholders during implementation.

The quality of the identification, assessment and implementation of project proposals will generally be improved by broad representation in the project planning and approval process.¹³ Having the right representation is important in both:

developing project proposals – where the right involvement helps to clarify the objectives and implementation issues; and
reviewing and approving projects – to provide specialist knowledge where needed and have the right people involved in decision-making.

Diagram showing broad representation is important in planning and in approval of projects.

It is good practice that entity guidelines on representation in the planning of individual projects:

encourage the right breadth of involvement across the entity, including representation across functional areas, such as policy, program delivery, and corporate, and also across levels, so that staff at the working level with practical experience are represented;
encourage appropriate representation from outside the entity, such as with central entities, partner entities, and customers, users, industry and service providers as appropriate; and
clarify the different representative roles during project planning – such as being consulted or having an approval role on project requirements – and the protocols for confidentiality.

Confidentiality may limit representation

For some projects, confidentiality or security reasons will limit representation in the planning process. For example, developing a proposal for a policy implementation project may involve consideration of delivery options with an industry sector. Premature publicity of options based on unreliable costings is likely to be counterproductive. Issues of confidentiality or security can be addressed by: entering into an appropriate confidentiality agreement with those being involved in early planning; or by recognising that some stakeholders are not able to be involved prior to an announcement, and making a suitable allowance in the project’s time and cost for potential changes arising from subsequent consultations.

Telling advice

“In practice, the most telling questions during Investment Committee meetings came from our independent expert. She had the time to read and think about the proposals; the background to have insights; and the willingness to share them.”

… Chief Operating Officer.

It is good practice when appointing individuals to committees that are responsible for approving projects to:

have the right breadth of membership, including representation, as relevant, from policy development, program delivery, regional network, financial, staff perspective, audit, ICT, and an independent perspective; and
periodically reflect on whether these different perspectives are being effectively brought to bear on proposals.

Client involvement in decision-making

Generally clients, or their representatives, are not directly involved in decision-making roles. However, it is important that the perspectives, concerns and experiences of clients be considered and be a factor in decision-making, given that their satisfaction is generally one of the project’s objectives. For example, potential clients may be asked to give their views on the relative merit of different options, or the relative importance of different requirements.

13: For some projects, confidentiality or security reasons will limit representation in the planning process.

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