Production of an Investment Logic Map (ILM) sits within Stage 1 – Develop of the Capital Framework and is designed to help answer the key questions of this stage:
What problems or opportunities exist?
What benefits would result from addressing them?
How should Government address or realise them?
Defining problems and opportunities sets the foundation for project development. One of the most common issues in infrastructure development is that the Project Team develops a solution before it properly understands the problems or opportunities the solution is intended to address. Even if the Project Team does understand the problems or opportunities, they may not have described a clear link between them and the proposed investment or identified the expected benefits from the investment.
This issue may result in:
- A mismatch between the scale of problems or opportunities and the proposed solutions
- Solutions that do not adequately or effectively respond to the problems or opportunities, or become less effective as the problems or opportunities and their effects change over time
- Limiting the Project Team in their ability to explore fully viable solutions.
The ILM is a useful tool for the Project Team to consider methodically the basis for developing the project using the answers to the three key questions above, as the foundation for Government to make a decision to invest in the project. It also can help test the logic of decisions about the project’s scope and features. It distils the core elements of a problem or opportunity and communicates a clear and simple investment story that decision makers can understand readily.
The process of producing an ILM may include one or more Investment Logic Workshops (ILWs).
Figure 1: The Capital Framework process
Tier requirements
- Tier 1 projects: It is mandatory for the Project Team to undertake an ILW and produce an ILM
- Tier 2 projects: It is mandatory for the Project Team to produce an ILM. The Project Team is recommended to undertake an ILW to support its development of the ILM
- Tier 3 projects: The Project Team is recommended to produce an ILM
The Project Team must also produce an ILM for Programs and Precincts.
Purpose of this section
The purpose of these Guidelines is to:
- Illustrate how the process of producing an ILM fits into the Capital Framework
- Explain the steps required to develop an ILM
- Describe how to complete an ILW
- Provide an overview of the ILM and how to use it.
Objectives of the Investment Logic Map preparation process
Government should make investment decisions in order to address an identified problem or take advantage of a recognised opportunity. The process of producing an ILM supports Government in identifying and selecting the optimal investments that maximise the benefit to society and the wellbeing of our community and environment. Put simply, the process of producing an ILM requires the Project Team to identify and summarise the four core elements of an investment decision:
- The problems or opportunities
- The benefits
- The possible strategic responses
- The possible solutions.
The key objectives of the process are to:
- Allow Directorates and Agencies to identify investments that are the most deserving of attention from Government
- Ensure that robust discussion and analysis is undertaken at the start of the Capital Framework by key stakeholders to identify and understand evidence-based problems or opportunities before investment solutions, new policies or organisation changes are prioritised and implemented
- Describe the logic flow for any proposed investment on one page in simple English that all readers can understand
- Establish a clear need for action by telling a simple investment story that answers many of the questions required to make an investment decision
- Identify the benefits that will be achieved by addressing the problems and realising the opportunities the Sponsoring Directorate has identified, including community wellbeing and environmental benefits
- Identify Key Performance Indicators (KPIs) for those benefits
- Identify the variety of strategic and feasible solutions that the Sponsoring Directorate should explore to address the problems or opportunities identified.
Investment Logic principles
The key principles that underpin the ILW and production of the ILM are shown in the table below.
Principle | Description |
|---|---|
Informed | Participants involved in the ILW and the development of the ILM should be those with the most knowledge of the problem or opportunity, the operating environment, the strategy of the organisation, associated government strategies, policies and priorities and the ILM preparation process. Key participants within Government should include MPC, FABG, EFG and ICA |
Evidence-based | Each statement in the investment story should be backed by reliable evidence to build a robust case |
Decisive | The process of producing an ILM, including the ILW(s), should be designed to ensure the required decisions are made on the content of the ILM before the ILM is finalised (see Dependent actions on the process of producing an ILM diagram) |
Focused | Each investment story should be focused. An ILM may be developed over one or more workshops, depending on the complexity of the investment story. However, each workshop should have a focused purpose and a defined desired outcome |
Clear | The investment story should be outlined in plain English that can be understood by all |
Strategically aligned | The ILM should be centred on a strong and clear alignment with Government strategies and policies. The strategic alignment with Government strategies and policies should be considered throughout the development of the ILM and should help to guide discussions in an ILW. These strategies and policies include the ACT Wellbeing Framework, the ACT Climate Change Strategy 2019-2025 and the Zero Emission Government Framework |
Immediate | Where an ILW is undertaken, the ILW outputs should be concluded and circulated for discussion and resolution (if required) within three business days |
Facilitated | Where an ILW is undertaken, ICA recommends using an independent, accredited facilitator to provide appropriate advice on the workshop preparation and requirements, and to help to extract the investment story and generate the workshop output. This is mandatory for Tier 1 projects. Where there are differing views among stakeholders, the facilitator plays a key role in outlining the positions of each stakeholder and the process for moving forward which acknowledges all views |
Interdependencies
The ILM should be the core foundation of a project’s development and is of paramount importance to understanding the case for investment, backed by logic and evidence. The process of producing an ILM underpins the entire Capital Framework, ensuring that any recommended investment decision is backed by a clear and compelling case, addresses a key problem or opportunity, and provides measurable benefits.
The Project Team should consider the actions across the Capital Framework that are dependent upon the process of producing an ILM (see diagram below).
Dependent actions on the process of producing an ILM
Footnotes: