ICT Investment Approval Process - Frequently asked questions

Eligibility

Which proposals does the ICT Investment Approval process apply to?

Proposals are subject to the ICT Investment Approval process if they:

  • Are ICT-enabled, that is, the policy or service delivery outcomes are highly dependent on the underpinning ICT system,
  • Have a total (through-life) cost estimated to be $30 million or more, including ICT costs of at least $10 million, and
  • Involve high-risk in terms of cost, technical complexity, workforce capacity or schedule (as determined by Finance).

Government may also apply the process to other proposals where it considers the proposal would benefit from the review.
Department of Defence proposals that are not included in the Defence Capability Plan, but are subject to Cabinet or joint Minister approval, are submitted under the Defence ICT Investment Approval Process (DIIAP). Further information on DIIAP is available from Finance.


Does the ICT Investment Approval process apply to internally funded proposals?

Yes, the ICT Investment Approval process applies to internally funded proposals that meet the cost and risk thresholds or where the Government believes the proposal would benefit from the review.


Entities should contact Finance as soon as they are aware of a proposal which may meet these thresholds.
For PGPA Act Entities the ICT Investment Approval process applies to all proposals that meet the cost and risk thresholds - regardless of the funding source.

 

Does the ICT Investment Approval process still apply if my proposal is coming forward outside the Budget process?

Yes, the ICT Investment Approval process applies to all proposals seeking Government approval that meet the ICT Investment Approval process cost and risk thresholds.

 

How is the ICT cost of a proposal calculated to determine whether it meets the $10m cost threshold?

The total cost and ICT costs are estimated over the life of the proposal and should include both the expense (operating costs) and capital costs of the proposal. Entities should take a through-life costing approach in estimating the cost of capital funding proposals. Future costs would include operational needs, consumables, maintenance, upgrade, renewal and disposal. Entities should contact Finance for further clarification on ICT cost elements.

 

What if the total cost of the proposal is estimated to be less than $30m, but includes ICT costs of at least $10m?

An entity, in consultation with Finance, may apply ICT Investment Approval process to proposals that have a total cost estimated to be less than $30m. Government may apply the process to proposals below the cost and risk criteria where it considers the proposal would benefit from the review.

 

Do I need to apply the ICT Investment Approval process to my project if it is already underway?

The ICT Investment Approval process is not retrospective. If Cabinet granted approval to your proposal before June 2008 then the ICT Investment Approval process does not apply. However, if your proposal is brought back to Cabinet, then it may be subject to the Investment Approval process.

 

Process and Timing

What are the arrangements for submitting ICT Investment Approval process business cases?

At first pass, an entity needs to submit:

  • Draft First Pass Business Case; and
  • Final First Pass Business Case.

At second pass, an entity needs to submit:

  • Draft Second Pass Business Case; and
  • Final Second Pass Business Case.

Sponsoring entities need to submit ICT Investment Approval process business cases via CABNET to:

Assistant Secretary
Investment, Capability and Assurance Branch
Governance and APS Transformation Business Group
Department of Finance

 

How does the ICT Investment Approval process interact with Gateway Review process?

The ICT Investment Approval process and the Gateway Review process complement each other, but are separate processes with separate purpose. Gateway applies to new projects/programmes undertaken by Public Governance, Performance and Accountability Act 2013 (PGPA Act) entities, which require Government approval and which satisfy certain financial and risk thresholds.

The financial thresholds are met where a project/programme has:

  • Projects with a total cost estimated to be $30 million or more for procurement or infrastructure or with an estimated total cost of $30 million or more including an ICT component of at least $10 million.
  • Programmes valued over $50 million.

If a project/programme is assessed by Finance as High Risk (refer to Risk Potential Assessment Tool) the Government may agree to require Gateway reviews at times appropriate to the projects/programmes life cycle.

Gateway assessments are for a point in time, and the results form advice direct to the Senior Responsible Official.

For proposal that are subject to both Gateway reviews and the ICT Investment Approval Process the requirement to conduct the Gateway Gate 0 and 1 reviews is not mandatory.

Further information, including applicable timings, is available on the ICT Investment Approval process page and to Government entities in Estimates Memoranda available through your CFO unit.

If you have any questions on the Gateway Review process, please send your enquiry to gateway@finance.gov.au.

 

Is ICT Investment Capability considered in the ICT Investment Approval process?

Entities are no longer required to undertake a formal P3M3 assessment as part of the Investment Approval process.

The ICT Investment Approval process considers your P3M3 capabilities indirectly through the provision of your business case and supporting documentation.

 

How long does the ICT Investment Approval process take?

There is no set length for the process - It may depend on a range of factors. The key determinant is the time needed by the entity to develop a business case to the point where it is sound and ready to be considered by Cabinet. Finance will provide support and assistance to entities in developing business cases for Cabinet consideration.

Cabinet may also specify the timing for consideration of the Second Pass Business Case in its decision at first pass.

 

What is the level of detail required for the first pass business case?

The aim of the First Pass Business Case is to provide sufficient information for the Government to decide whether to commission further work on any option or to eliminate some options.

First Pass Business Cases should succinctly describe a number of well considered options, say three to four, with a broad description of the technical scope, a through-life cost estimate, risk assessment and schedules (including a costed and scheduled scope of work needed to develop the Second Pass Business Case), and an assessment of the benefits to be derived from each option.

Where appropriate, the business case should include cooperative initial planning with other entities.

 

Do I need to engage with the Digital Transformation Office?

Entities should consider the Digital Service Standard and contact the Digital Transformation Office as soon as practical when developing a proposal that has service delivery implications. Further information is available on the Digital Transformation Office website.

 

What is the time between first pass and second pass consideration?

The effort devoted to developing an ICT business case should reflect the cost, complexity and risk profile of the project. Typically most entities will take at least six months to prepare a Second Pass Business Case. Depending on the scale of the cost and risk issues, and the resources assigned, this work may take longer. However, entities can request proposals be brought forward for consideration as soon as they are ready. Entities must submit a draft Second Pass Business Case for review by Finance prior to seeking Cabinet approval.

 

Can I get funding to develop the first and second pass business cases?

Entities should use existing resources to develop their First Pass Business Case. When seeking first pass approval, entities may request extra funds for the development of the Second Pass Business Case (such as technical feasibility studies, prototype development and testing).

 

If a proposal is turned down by Cabinet at second pass, can the entity re-submit the second pass proposal at a later Budget, skipping the first pass?

This decision will be made on a case-by-case basis. The Cabinet Secretary’s decision when considering these matters will depend on the reason and the context for the original second pass proposal being rejected.

 

If a proposal receives second pass approval, when will my entity receive the agreed funding for the first year of the proposal?

The timing of funding for your approved proposal will depend on when the Second Pass Business Case is submitted to Government.

 

If Cabinet gives approval to an entity for a policy objective, will the entity still need to go through the ICT Investment Approval process?

Cabinet may give approval to an entity for a broad policy objective; however the entity will still need to submit a First Pass Business Case to Finance for review, if the proposal meets the ICT Investment Approval process thresholds. The Investment Approval process affords Cabinet the opportunity to review delivery options, risks and costs - and to decide which option is best suited to achieve the agreed policy outcomes.

 

Where more than one entity is delivering an ICT enabled investment, which entity is responsible for bringing forward First and Second Pass Business Cases?

Where more than one entity is delivering an ICT-enabled investment in support of a proposal eligible for ICT Investment Approval process, the lead entity will be agreed between all entities involved in the proposal. The lead entity will have responsibility for the New Policy Proposal and bringing forward First and Second Pass Business Cases that combine each entity's requirements, with particular attention to cross-entity or cross-portfolio proposal coordination and governance roles. The decision on which entity should be the lead will consider such matters as Ministerial, especially policy, responsibility, programme and project management capability, and the extent of technical and operational contribution.

 

Further Information

Where do I go for help?

Government entities only: Further information on actions required and deadlines, both inside and outside the Budget process are set out in the relevant Estimates Memoranda (EMs). EMs are available from CBMS or from your CFO unit.

Use the ICT Business Case Guide, templates and Costing Spreadsheet to develop your business case.

Contact the Investment, Capability and Assurance Branch in Finance regarding significant ICT initiatives at the initial formulation stage at ictadvice@finance.gov.au.


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