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Issues for cross-boundary projects

Better Practice results: Improved delivery of cross-boundary projects and associated public benefits, arising from an early shared commitment to defined project outcomes, timeframes and financial arrangements.

Increasingly, the delivery of government programs requires the involvement of multiple parties, whether they are different business areas within an entity, different entities, or from multiple jurisdictions. Implementing such programs will involve a project which will use resources from different areas – a cross boundary project. This section identifies important issues for attention for cross boundary projects.

The major steps in preparing a business case, such as defining the outcomes and establishing the cost, are no different for cross boundary projects. However, the process can be much more complex than for a project involving a single entity.

Important areas requiring the attention of executives involved in cross-boundary projects are:

• managing the process of developing the business case, which is likely to be more complex;
• setting up governance arrangements for managing the project; and
• getting budget arrangements and expenditure controls right.

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Managing the process of developing the business case

Developing the business case for a cross-boundary project can pose particular challenges, arising from the need to obtain agreement of the various parties to the project's goals and objectives. The potential different priorities of each party also need to be taken into consideration.

It is important that the project sponsor is aware of the risks in developing a business case across boundaries, and takes appropriate mitigating actions. Useful initial questions for cross boundary projects are:

• What other parties will need to be involved in the project? This might involve other Australian Government entities, entities of state, territory or local governments, overseas governments, private sector and not-for-profit entities or representative groups of clients and providers.
• In terms of defining the project, which parties have responsibility for outcomes, which have decision-making roles, and which need to be consulted?
• What roles will the parties have in implementing the project?

Once the parties to be involved in planning have been identified, important issues for the project sponsor include:

• gaining agreement to coordination and clearance arrangements for the business case; and
• obtaining from each party an appropriate commitment of resources to develop the business case.

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Governance arrangements for the project

Inadequate project governance is a common risk to the effective implementation of projects. This risk is even greater for projects which span organisational or jurisdictional boundaries, and accordingly warrants particular attention at the planning stage.

When developing governance arrangements for inclusion in the business case, issues to be considered for cross-boundary projects include:

• the broad governance model – for example a lead entity acting as purchaser; a lead entity with cooperative support; or a new entity managed by a board with representatives from relevant entities;
• project monitoring arrangements – including key milestones, resourcing of monitoring, quality assurance, and arrangements for dissemination of status reports; and
• responsibilities and authority for project communications to stakeholders and, if relevant, to the wider public.

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Getting financial estimates and controls right

All projects face a challenge in estimating the amount and timing of expenditure. Cross boundary projects face additional challenges such as possible multiple sources of funding, and the need to monitor and control expenditure in different entities.

When developing financial arrangements for inclusion in the business case, issues to be considered for cross-boundary projects include:

• the source(s) of funds;
• how funds will be allocated – for example to a single project budget, or held separately by the parties providing the funds;
• how funds will be controlled – for example payment for activities (input basis), payment for results (output basis), or provision of a general budget supplement; and
• how expenditure will be reliably monitored across entities.

In addition to project costs, there may be expected financial benefits or savings from the project. These will also need to be allocated. This may involve setting out the proposed process and rules for measuring the baseline of costs and for harvesting either actual or promised savings from entities. Clarifying these issues will assist all parties involved when considering the business case for approval.

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