This section provides further detail on each step involved in producing an ILM, as shown in The process of producing an ILM diagram. For each step, it describes the objectives and the key questions that the ILW should answer, which will feed into the production of the ILM.
What is the problem or opportunity?
This step investigates the problems that the Sponsoring Directorate needs to address, or the opportunities that the Sponsoring Directorate wishes to realise, and provides evidence that these problems or opportunities are valid. This step should delve into the core need for an investment.
The purpose of this step is to answer the following questions:
- What are the problems or opportunities the Sponsoring Directorate needs to address (both their causes and their effects)?
- What is the evidence to confirm both the causes and the effects of the problems or opportunities?
- Who do the problems or opportunities affect and how do they affect them?
- Why does Government need to address the problems or realise the opportunities now?
- Do the definitions of the problems or opportunities capture their full extent/scope?
- Is the operating environment characterised by uncertainty that could significantly affect the problems or opportunities or the need for change?
Problem and opportunity statements should be:
- Written in plain English and communicate both the causes and the effects of the problem or opportunity for each group impacted
- Framed around the impacts the problem is having on stakeholders, rather than on the adequacy of particular assets
- Supported by reliable evidence. The evidence could draw on government datasets, publicly available information, research findings, government strategies or the experience of interventions in other jurisdictions or pilots
- Compelling.
Appendix A provides examples of problem statements.
Weighting problems or opportunities, benefits and strategic responses (optional)
It is often useful to rank and then to allocate approximate percentage weightings (Footnote: To the nearest 5% ) to the problems or opportunities, benefits and strategic responses. This helps to ensure that the workshop focuses on the most important discussion points and also allows participants (and the Project Team) to prioritise the most compelling problems.
In an ILM, the Project Team should allocate each of the columns showing the problems or opportunities, benefits and strategic responses a total weighting of 100 per cent. For each problem or opportunity, the Project Team should distribute its weighting between the identified benefits and do the same for each benefit between the identified responses. This distribution (or weighting) indicates the relative importance of the various elements within each column. The Project Team should consider whether a problem, opportunity, benefit or strategic response with an allocation of 10% or less is sufficiently significant for inclusion within the ILM.
Where stakeholders are unable to agree the weightings of the problems and opportunities, benefits and strategic responses, the Project Sponsor should decide on the weighting in consultation with ICA. In doing so, they should account for the majority view and outline the alternative views in supporting documentation.
The Project Team should refer to the example ILM provided in Appendix A to see how to allocate percentage weightings to the problems or opportunities, benefits and strategic responses.
In this example, there are three problem statements which are weighted as follows:
- Problem statement 1: 50%
- Problem statement 2: 30%
- Problem statement 3: 20%
In the example, there are three benefits identified, and the weighting of each problem statement is distributed to each benefit as follows:
- Benefit 1: 50% (35% from Problem statement 1, 15% from Problem statement 2)
- Benefit 2: 25% (15% from Problem statement 1, 10% from Problem statement 3)
- Benefit 3: 25% (15% from Problem statement 2, 10% from Problem statement 3)
Similarly, there are three strategic responses, and the weighting of each benefit is distributed to each response as follows:
- Strategic response 1: 60% (35% from Benefit 1, 10% from Benefit 2 and 15% from Benefit 3)
- Strategic response 2: 25% (15% from Benefit 1 and 10% from Benefit 3)
- Strategic response 3: 15% (15% from Benefit 2)
What benefits will result from addressing the problem or realising the opportunity?
This step defines the benefits that the Sponsoring Directorate expects to achieve from resolving the identified problems or opportunities. These benefits include positive impacts on the community and environment under one or more of the 12 domains within the ACT Wellbeing Framework.
Within the ILM, each identified benefit should be supported by KPIs (generally, only one or two) as a method of measuring and reporting the contribution of the benefit to the Sponsoring Directorate and Government. The Project Team should keep a record of other possible KPIs for inclusion in a future Business Case and, for Tier 1 projects, a Benefits Realisation Plan.
The purpose of this step is to answer the following questions:
- What are the benefits of addressing the problems or realising the opportunities?
- What stakeholder groups will benefit?
- Are the benefits of value to Government?
- What are the KPIs and measures that will show that the project has addressed the identified problems properly or realised the opportunities? The response to this question should source current baseline data and ultimately set target values and delivery timelines for these measures.
- Who will be responsible for ensuring delivery of the benefits?
- How will they monitor and report the benefits?
- Will the realisation of any of the benefits be materially affected by uncertainty or are any proposed benefits contingent on key interdependencies?
KPIs should be SMART:
- Specific – KPIs must be well defined and each measure must be sufficiently narrow in scope to ensure the reported benefits are comparable across time and are robust and defensible
- Measurable – ideally, KPIs need to be easily measured/quantified in a cost-effective manner. Otherwise, reporting will become too challenging to provide meaningful feedback in an acceptable timeframe
- Achievable – the reporting processes should be achievable and realistic
- Relevant – reported KPIs must share a direct link with the intended benefits of the investment. They must help Government understand if the realisation of each new benefit generates value
- Timely – all KPIs should have a clearly defined timeline, including a start date, recurrent reporting frequency (e.g. annually) and a target date for a more comprehensive analysis and/or review (e.g. one year post-implementation).
For Tier 1 projects, and Tier 2 and Tier 3 projects where the Project Team elects to undertake a BRP, the Project Team should also refer to the guidance on developing a Benefits Realisation Plan when developing KPIs to measure benefits. The benefits identified in the ILM will form the basis of the ongoing benefits realisation and measurement process that occurs following the project’s implementation.
Appendix A provides example wordings of benefits and KPIs.
What are the possible strategic responses?
A strategic response is the high-level action proposed by the Sponsoring Directorate to address the identified problem or opportunity and provide the identified benefits. This step aims to explore a broad range of strategic response options that will address the problem or opportunity and deliver the benefits identified in the ILM. This step should clearly state the strategic responses without locking in any specific solutions.
The Project Team should consider strategic responses that focus on managing demand, improving productivity and changing supply, as well as potential asset-based responses.
The purpose of this step is to answer the following questions:
- What are the different strategic response options that Government could take to deliver the identified benefits (and respond to the problem or opportunity)?
- What high-level actions are required for each strategic response?
- Do the strategic responses explore ways to manage demand, improve productivity and change supply?
- Is there evidence to demonstrate that the strategic responses are feasible?
- Are any of the strategic responses contingent upon key interdependencies that will affect the need for, or approach to, the investment?
- Would any of the strategic responses become unfeasible or sub-optimal if circumstances changed?
- Which strategic response is likely to be the most suitable (based on the benefits delivered, risks and uncertainty, costs and interdependencies)?
Appendix A provides example wordings of strategic responses.
What are the possible solutions within the strategic response?
The previous steps involved in producing an ILM should have established the need for action and identified the preferred strategic response. This step explores how the Project Team might implement the preferred strategic response. This may include non-capital solutions (such as organisational changes) or capital solutions (such as upgraded or new assets).
The purpose of this step is to answer the following questions:
- What solutions are available to implement the strategic response, including organisational or policy changes; changes to services using existing assets; and new, replacement or renovated assets (if any)?
- Will the possible solutions (expressed as organisational and asset changes) address the problems or opportunities identified and deliver the expected benefits?
- What different approaches to these possible solutions have been identified? What is the preferred solution and why?
The various solutions presented in the ILM might be informed by experiences in other jurisdictions and should include both organisational and asset changes where possible. Organisational changes are actions that Government could take to deliver the strategic response, whereas asset changes are asset-based investments specific to the strategic responses. Asset changes may also be required to support an organisational change.
The possible types of solutions are shown in the table below.
Potential solutions | Description | Examples |
|---|---|---|
Non-asset options | Delivering new or additional service capacity without creating the need for additional assets |
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Existing asset solutions | Using operational and non-operational assets to meet the need |
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New asset acquisition | Only investing in developing or procuring new assets that are required to support service delivery |
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Market-based solutions | Using market mechanisms such as pricing, property rights and competition to solve problems or realise opportunities |
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The Project Team may combine a mix of these solutions to produce the preferred strategic response. The Project Team should analyse the solutions identified in this step in greater detail during the preparation of the Business Case.
Appendix A provides example wordings of possible solutions.
Footnotes: