Making the Business Case for Traffic Incident Management

Chapter 1. Introduction

Agencies know intuitively that there is a profound value in traffic incident management (TIM) programs; however, it is often challenging to estimate and communicate the value of TIM internally to executive management and externally to decisionmakers. The value of TIM must be accurately estimated and effectively communicated to maintain and grow a TIM program. Typically, a report presenting an "analysis," "evaluation," or "study" is generated after a TIM program or project has been implemented to summarize the benefit of the program or project; however, this is often a one-time activity. In order to transform a TIM program or project from a stand-alone effort to a sustaining core function of an agency, the establishment of a solid business case is necessary.

What is a Business Case?

A business case is a well-reasoned argument designed to convince an audience of the benefits of an investment while educating them about the associated changes, costs, and risks. A business case is both a product and a process. The business case product is important as it uses writing, data and analyses, and graphs and charts to articulate the business need, the proposed investment, and the value generated by making an investment. It is the tool used to inform key stakeholders about an initiative and to convince them to support it in specific ways, such as funding, rule-making, policy changes, or process adherence. (Treasury Board of Canada Secretariat, "Business Case Template," Catalogue No. BT53-15/2-2009E-PDF, 2009.)

There are five components that together make for a compelling business case: the problem, the proposed solution, a value analysis, a risk assessment, and the strategic fit. Figure 1, adapted from a guide on developing a business case for renewable energy at airports, outlines these key components of a business case product. (S. Barrett, P. DeVita, J. Kenfield, B. Jacobsen and D. Bannard, "Developing a Business Case for Renewable Energy at Airports," Transportation Research Board, Washington, D.C., 2016.)

Figure 1. Chart. Key components of a compelling business case product or report.

(Source: AEM Corporation.)

Figure 1 also provides the important questions that need to be answered within each of the key business case components. While the traditional business case product is a report, a compelling business case may include targeted briefings, fact sheets, testimony, an informational video, or other communications products. "There is no magic formula when it comes to the size of a business case. The size is irrelevant. What is relevant is that the business case provides all the necessary information to make the job of the decisionmaker possible." (I. Bogorad, "6 essential elements for a winning business case," TechRepublic, 27 July 2008. [Online]. [Accessed 13 May 2016].)

While the business case product is what ultimately gets delivered or presented, it should not be viewed as the final step. In fact, the overall TIM business case development process is as important as the product itself. This process helps to formalize and institutionalize the proposed initiative, setting it up for success and smart growth. The business case development process is shown in Figure 2.

Figure 2. Chart. Traffic incident management business case development process.

(Source: AEM Corporation.)

Traffic Incident Management Business Case Development Process

As shown in Figure 2, the TIM business case development process is segmented into four phases:

1. Develop Vision.
2. Evaluate and Select.
3. Formalize.
4. Prepare for Implementation.

The TIM business case development process is a lifecycle process with phases typically, but not always, implemented sequentially. Within each phase, activities may be approached iteratively. Likewise, the conduct of the phases may be approached iteratively. Each project or program initiative is unique, and the completion of the four phases can vary; what is important is that each of the four phases is successfully implemented. In addition to the phases shown in Figure 2, it is critical to engage stakeholders, review and revise, and obtain buy-in throughout the business case development process. The input and buy-in will result in a stronger, more sustainable business case.

Each phase of the TIM business case process is briefly described in the following subsections.

Develop Vision

The development of the TIM business case begins by establishing the vision the strategic need and desired outcomes of the proposed initiative. Key elements to be developed as part of the vision include the following:

• Organizational overview.
• Problem or needs statement.
• Drivers for change.
• Proposed solution and options.
• Desired outcomes.
• Strategic fit.

The vision should articulate how the initiative affects the future - in essence, "how will solving this problem change the future?" The problem statement should clearly and succinctly describe the problem from the perspective of the public, stakeholders, and the broader agency. The proposed solution(s) should clearly articulate what is being proposed and the potential consequences of doing nothing. The strategic fit should demonstrate and emphasize how the proposed solution(s) aligns with the organization's broader strategic context and contributes toward its goals and objectives. It is critical during this stage of the business case development process to engage stakeholders to foster champions within the organization and across constituent organizations.

Evaluate and Select

The next phase of the TIM business case development process involves evaluation and selection. This phase typically requires the most resources, time, data, and specialized expertise. Evaluation involves a rigorous analysis of options to estimate full costs, benefits, and risks. This value analysis is one of the key components of any compelling business case product. Evaluation may focus directly on a detailed analysis of options, or it may require a preliminary analysis after which a few viable options are selected. The evaluation should include quantitative, monetized, and qualitative assessments. Selection involves the delineation of the preferred option with sufficient detail to instill confidence that the proposed investment has been appropriately considered and that the presented estimates are within an acceptable degree of accuracy. The business case report should include a comparative summary of the findings associated with each option and should demonstrate the analytics and strategic basis for the preferred option. A clear summary of findings will serve as the content by which to prompt decisionmakers to recognize and support investment in TIM initiatives.

Formalize

The third phase of the TIM business case development process is formalization. Formalization involves activities that help to integrate TIM within and across organizations, prepare the TIM program or strategies for institutionalization, and solidify funding sources for the program - in essence, activities that help to establish the TIM program as part of the fabric of the agency. While the previous phase includes a traditional benefit-cost analysis, a formalization strategy frames this analysis within the broader story of the value of TIM within the organization, the transportation planning process, and the diverse stakeholder community. The formalization strategy is content that should be used as part of the strategic fit component of the business case product.

The move toward formalization requires "socialization" of the TIM program. Socialization strategies in the context of a TIM agency may:

• Grow a collective "in the same boat mentality" within the agency and across stakeholders.
• Formally disseminate information and informally share value within the context of work.
• Communicate the value of TIM for counterparts - how will law enforcement, emergency medical services (EMS), and other stakeholders benefit in their core missions from supporting TIM?

The cornerstone to TIM socialization and formalization is the involvement and participation of stakeholders to foster champions within the organization and across constituent organizations.

Implement and Manage

To demonstrate a commitment to the execution and management of the proposed initiative, the final phase of the TIM business case development process includes defining the implementation and management of the proposed initiative. Depending on whether the business case is for a program or project, items may include the processes for tracking project progress, risks, changes, and outcomes, as well as performance measurement and management strategies. The documentation of these implementation and management concerns helps to instill confidence that the proposed initiative will be well managed across the project or program lifecycle.

Scoping and Living the Business Case

The business case, both as a product and a process, provides decisionmakers, stakeholders, and the public with a tool for evidence-based and transparent decisionmaking as well as the blueprints for the delivery, management, and performance monitoring of the resultant program. The level of resources, time, and expertise needed to develop the business case will be a function of the size of the proposed investment, the availability of data, and the time-frame within which a decision is made. In scoping the resource needs for business case development, be sure to:

• Identify what business case products will be needed to market the preferred solution to decisionmakers, legislative bodies, stakeholder agencies, and the benefiting public. While a business case report and briefing may be the right products for the decisionmakers, it may miss the mark with the general public or with the legislative entities that define line-item funding. Be sure to consider what is needed to produce the desired quality and type of required business case products.
• Understand the timeline for investment decisionmaking and be sure to allocate sufficient time to market the business case throughout the development process and subsequent to the completion of the business case products. The best business cases may fail in securing funding, or at the very least be deferred significantly, if the business case does not align with the agency's process and timeline for funding decisions.
• Recognize that the evaluation should align with expertise, data, and TIM program implementation and maintenance costs. Evaluations can employ a range of approaches from simple computations, to empirical analyses using observational data, to complex mathematical models driven by simulations. The business case for a large, multi-million dollar TIM program will likely require a robust, data-intensive estimation of the benefits. Conversely, the business case for a smaller TIM program investment, such as funding three sessions of responder training, may require a qualitative evaluation that relies on national best practices.
• Incorporate a plan for documenting the process with an eye to the future to support reproducibility and to capture why specific decisions were made in the development of the business case. The meta-data on the business case process and products, as well as the data collected in the evaluation of options, will be key components to support subsequent investment decisions.

Within the context of TIM, the investment requests may be segmented. That is, a small investment request associated with a pilot study may precede a larger request for system-wide solution implementation. In this situation, the evaluation and selection phase of the business case process may involve limited analysis centered on capturing the problem, a qualitative delineation of value using industry information on best practices, and referencing of peer results. The data (both operational and process focused) generated from the pilot study can then serve as a more formal evaluation and recommendation for system-level implementation.

Typically, the business cases that culminate in program implementation will include a post-implementation review, which serves as the starting point for the next investment consideration. Consequently, the business case report and the business case process best serve the program or project when viewed as a living document and activity over the lifecycle of the investment. The business case should not be viewed as "once and done." Demonstration and communication of the continued value from the initial investment and commitment of operations funding will ensure that the TIM program remains viable and that future growth opportunities are met with support.

Purpose and Organization of Document

The purpose of this document is to support TIM agencies and partner agencies in the development of a strong business case for their TIM programs, as well as to introduce strategies that link investments with program results and, ultimately, with the strategic outcomes of the broader organization.

Program managers seeking approval or continued funding for a TIM activity, project, or program are the primary audience for this document. This document can be used throughout the entire lifecycle of an investment to ensure meaningful discussions between managers and the approval or funding authority from the earliest possible time.

Following this introductory chapter, the document contains four core chapters that correspond to the four phases of the TIM business case development process. Each of the four core chapters begins by listing the essential elements to be developed (e.g., for the business case product) and/or activities to be conducted within that stage of the process. These elements/activities are described in more detail within each chapter, and examples are presented to provide context. Each chapter concludes with a check list of the important questions that should be answered by the end of each phase. The core chapters are described briefly below:

• Chapter 2 focuses on the first stage of the business case development process - Develop Vision. This chapter discusses the various elements of the vision and provides examples of how TIM organizations have developed the vision for their programs and initiatives.
• Chapter 3 examines the second stage of the business case development process - Evaluate and Select. This chapter provides more detail about the methodologies available for estimating the benefits of TIM for the purposes of evaluation and selection and provides examples of how TIM organizations estimate the benefits and costs of their programs.
• Chapter 4 centers on the third stage of the business case development process - Formalize. This chapter discusses and provides examples on the activities used to facilitate the integration of TIM within and across organizations and to prepare the TIM program or strategies for institutionalization. Common and creative funding sources for TIM activities and programs are also included.
• Chapter 5 focuses on the fourth stage of the business case development process - Prepare for Implementation. This chapter discusses and provides examples on how to plan for the implementation and management of a proposed project/program to demonstrate a commitment to the execution and management of the initiative.

Finally, Chapter 6 provides a summary and conclusion to this document and lists other relevant resources for agencies in support of the development of a compelling TIM business case. In addition, Appendix A provides a business case report template that is adapted from a business case template developed by the Treasury Board of Canada Secretariat. (Treasury Board of Canada Secretariat, "Business Case Template," Catalogue No. BT53-15/2-2009E-PDF, 2009.) The phases, questions, and checklists presented throughout this document are also adapted from this template. The template is shaped so that once the questions in each chapter are answered and the phases are complete, the information needed to populate the business case report template should be available.