Contents
Better Business Cases Single Stage Light Business Case Template ..............................1
Document Control ...............................................................................................................1
Document Information ............................................................................................................................. 1
Document History .................................................................................................................................... 1
Document Sign-off.................................................................................................................................... 1
Contents................................................................................................................................2
Purpose .................................................................................................................................3
Strategic Case ......................................................................................................................3
Strategic Context ................................................................................................................3
The Need for Investment.....................................................................................................5
The Case for Change ..........................................................................................................7
Economic Case ...................................................................................................................14
Process.............................................................................................................................14
Critical Success Factors....................................................................................................14
Identify Short-listed Options ..............................................................................................15
The Preferred Option ........................................................................................................15
Table 3 – Order of priority including updated INR Hospitality Costs ..................................22
Commercial Case ...............................................................................................................40
Financial Case ....................................................................................................................40
Management Case ..............................................................................................................43
Summary .............................................................................................................................45
Next Steps ...........................................................................................................................45
2 | Operation NEPTUNE – Single Stage Business Case
Purpose
In September 2014, the Chief of Navy gave Approval in Principle to a Business Case for the
investment of up to $2,165,000 in the years 2015-17 in a programme of events and activities
to be known collectively as Operation NEPTUNE, the purpose of which is to:
strengthen relationships between the Royal New Zealand Navy and partner nation
navies and maritime security forces;
improve the retention of trained naval people through a programme of activities that
strengthen pride in our Service's past achievements and future potential; and,
improve recruitment so that the Service continues to attract people with the necessary
attributes and potential; and,
enhance the reputation of the Royal New Zealand Navy amongst the people of New
Zealand to support the retention and recruitment aims described above.
Since Approval in Principle was given, additional opportunities have come to light and costs
have been uncovered in greater detail. It is necessary to establish that investment in
Operation NEPTUNE is still valid in the light of organisational strategic aims (which have
changed since the original Business Case was presented), current NZDF investment plans
and new cost information, and that proposed investment in emerging opportunities is
consistent with overall NEPTUNE priorities. For these reasons, this document refreshes the
original Business Case logic and subjects proposed new investments to the same
prioritisation process (Multi Criteria Decision Analysis) that was employed to develop the
original Business Case.
The Refreshed Business Case is a stand alone document. Like the original Business Case, it
follows the Treasury Better Business Cases guidance and is organised around the five case
model.
Strategic Case
Strategic Context
The Royal New Zealand Navy (RNZN) mission is “Defend New Zealand’s Interests at Sea”.
The NZDF vision is “Joint Operational Excel ence”. Navy wil contribute to this vision by
achieving the following strategic goals:
Strategic Goal One: Operational Focus
Strategic Goal Two: Workforce Excellence
Strategic Goal Three: Organisational Agility
Strategic Goal One – Operational Focus. The RNZN exists to conduct naval warfare
across the spectrum of operations. Strategic Goal One requires that the value of everything
the Navy does be measured in terms of how well it contributes to operational capability. The
strategic context in which the proposed investment in Operation NEPTUNE comes into play
is as follows:
Operation NEPTUNE – Single Stage Business Case | 3
Relationships. Effective relationships with potential partners in maritime security and peace
support operations are critical to the operational effectiveness of the RNZN. Operation
NEPTUNE contributes to Strategic Goal One by enhancing relationships with navies from
around the Asia-Pacific operation who will attend the International Naval Review (INR), all of
whom are potential partners on some level.
Recruiting. High calibre people are the most important element of operational capability.
Operation NEPTUNE supports Strategic Goal One by enhancing efforts to ensure that such
people are attracted to a career in the RNZN.
Retention. RNZN investment in people and leadership must be protected by strategies to
maximise the retention of trained, committed, values driven people, which as indicated above
is the most important element of operational capability. Operation NEPTUNE supports
retention, and thus Strategic Goal One, by highlighting to our people the non-material
rewards offered by a career in the Service, helping to offset the attraction of the higher
material rewards accessible in civilian life.
Reputation. Recruiting and retention goals must be underpinned by a solid reputational
foundation, whereby potential recruits and our own people understand that naval service is
valued by the community at large because it is understood that what we do is vital to our
country’s security and prosperity. Our reputation is also dependent on an understanding that
our values are consistent with societal expectations.
Strategic Goal Two – Workforce Excellence.
Attainment of Strategic Goal One – Operational Focus – requires that the RNZN have
sufficient numbers of well trained, qualified and experienced people to ensure that the
benefits of enhanced capabilities are realised. Strategic Goal Two is defined in terms of
qualifications, skills, experience, and people resource management that limits turbulence and
reconciles personal and professional aspirations with service needs to the maximum extent
practicable. The recruiting, retention and reputational aims of Operation NEPTUNE support
attainment of Strategic Goal Two in the same way that they support Strategic Goal One, as
defined above.
Strategic Goal Three – Organisational Agility
Attainment of Strategic Goal Three – Organisational Agility – will provide the RNZN with the
flexibility and adaptability to adjust to rapidly changing circumstances, directing resources to
areas of greatest need as circumstances and priorities evolve. By enhancing relationships,
Operation NEPTUNE will provide the RNZN with the wherewithal to achieve organisational
agility. Strong relationships with other maritime security forces enable benchmarking which
provides both the impetus for change, such as the adoption of new tactics, techniques and
procedures, or new technologies and doctrines, and a means of assessing how well the
change has been implemented. An organisation cannot be agile without change stimuli, and
the value of change cannot be assessed without benchmarking.
The resource which most facilitates organisation agility is people. Without sufficient values
driven people with the necessary skills and experience, organisational agility will be
unattainable. By contributing to recruiting and retention, Operation NEPTUNE thus
contributes to organisational agility.
4 | Operation NEPTUNE – Single Stage Business Case
The Need for Investment
Having considered the strategic context, there is a need to consider the key drivers for
investment; whether there is evidence to confirm the root causes and effects of the problems
the investment is intended to address; if the investment is a good idea; and whether there is
strong evidence of support from RNZN, NZDF and political leadership and other key
stakeholders. These points are addressed below.
Key Drivers
For this investment, the key drivers are as follows:
Reputation. Reputation is a critical driver for investment in Operation NEPTUNE because of
the need to secure an adequate supply of our most critical resource – people. Success in
attaining recruiting targets is not wholly dependent on the extent to which the attractions of a
naval career can be made to appeal directly to the recruiting demographic. Young people
considering career options are influenced by the way in which a potential choice is viewed by
the wider community, in particular their key influencers, such as parents, teachers, and their
peers. If we are to attain our recruiting targets, the community at large must understand what
we do and how this contributes to a secure and prosperous society.
Relationships. Effectiveness in multi-lateral operations is a function of tactical proficiency
and doctrinal, tactical, and technical interoperability, attainment of which for a small navy like
the RNZN is not possible without the support of larger navies. This can be (and is) purchased
or bargained for, but it is much more readily attained when relationships with partners whose
support we seek are underpinned by mutual understanding and goodwill. The need for strong
relationships is a key driver for investment in Operation NEPTUNE.
Retention. The strength of our navy derives from the courage, commitment and
comradeship of our people. Our core values enable us to perform our missions in the face of
adversity and to exploit the full capabilities of our ships, aircraft and equipment. Our viability
as a navy depends on retaining people who live these core values. Remuneration and
conditions of service are important elements of retention, but our people also need a strong
sense that their commitment is acknowledged and valued – naval service makes demands
on men, women and their families that can never be fully offset by material rewards.
Providing our people with this sense is a strong element of naval leadership, but
opportunities to periodically and overtly reinforce it need to be identified and exploited. The
need to maximise retention by highlighting the value we place on our people is a key driver
for investment in Operation NEPTUNE.
Recruitment. Quality people are never easy to recruit. This applies equally to school leavers
and to lateral recruits. The Navy must compete for the attention of its recruit demographic
with an array of competitors, most of whom offer higher material awards for much less
personal sacrifice. One of the main challenges in attracting the attention of the school leaver
pool is that many have only a vague notion of what the Navy is and what it does, popular
culture providing a mass of distorted impressions which need to be overcome. With lateral
recruits, including former naval officers and ratings that we wish to re-enlist, the challenge is
to overcome the appeal of the material rewards that industry in New Zealand and overseas
can offer.
Our recruiters and our reputation management staff do superb work in taking the navy to the
country and engaging the recruit pool. However, this must be supported by wider
engagement which highlights the non-material advantages that the navy offers in comparison
Operation NEPTUNE – Single Stage Business Case | 5
to industry – recent research indicates that “serving a cause” is much more important to
young people than has hitherto been realised.
There is also a need to bring naval career options to the attention of ethnic groups that are
under-represented in the RNZN.1 A programme of activities that bring the Navy to the
attention of a wide cross section of the community will support this engagement. The need to
boost recruiting messages wherever possible is a key driver for investment in Operation
NEPTUNE.
Evidence
Reputation. A TNS Survey of public perceptions of the NZDF conducted in January 2014
indicates that the Defence Force and Armed Services reputation ratings remain high.
Confidence in the NZDF and in the Services is also high. Our “brand attributes” are general y
positive, especially in terms of the training provided to our people and in a prevalent view that
our people are disciplined and do a good job for New Zealand. However, the survey also
indicated that most New Zealanders have a general idea but not a detailed knowledge of the
NZDF and the Services, and that many are uncertain about our capabilities and readiness for
combat. Survey ratings were also moderate in relation to the modernity of our equipment and
there is a low awareness of the types of vessels that comprise the Navy – two out of three
people surveyed were unable to identify a naval vessel type. Those that were able to identify
a vessel type most commonly mentioned frigates, suggesting a low level of awareness of the
value provided by the Naval Patrol and Support Forces.
The TNS Survey provides evidence that the New Zealand public is generally well disposed
towards the NZDF. However, the evidence of uncertainty about our capabilities and
readiness for combat suggests that many New Zealanders do not see a direct connection
between the missions that we perform and the capabilities with which we are provided (and
those which we seek in the future) and for which they pay through taxation.
Relationships. The quality and utility of key relationships cannot be demonstrated by
statistical evidence. Nonetheless, relationships matter. For example, attainment of Directed
and Operational Levels of Capability for the Naval Combat Force requires access to
instrumented weapon ranges and other training assets which are not available in New
Zealand. We therefore pay for access to Australian facilities, either directly or in kind.
Payment ensures a minimum level of service, but the goodwill of the Australian staffs
organising sea training ensures that maximum value is obtained. Goodwill helps ensure that
alternatives are available when planning arrangements go awry, and that flexibility is built
into exercise programmes to accommodate RNZN units. Almost every experienced officer
can give examples where the staffs of other navies have demonstrated considerable
flexibility to accommodate our needs, whether training, operational or logistical.
1 Defence White Paper 2010, Paragraph 6.18
6 | Operation NEPTUNE – Single Stage Business Case
potential value for money;
o
supplier capacity and capability;
potential affordability; and
potential achievability.
Applying this screening test enables detailed evaluation to be concentrated on those events
and activities most likely to align with strategic needs while delivering value for money and
avoiding exposure to unsustainable business and reputational risk. Proposed events and
activities have been screened against these critical success factors; a number which failed
the strategic alignment, achievability and risk threshold tests have been eliminated. For
example, a military tattoo was eliminated from consideration on the grounds of organisational
capacity, affordability, and value for money.
Identify Short-listed Options
The Better Business Case guidance recommends that having applied critical success factors
as a screening test, “long list” options should be evaluated against the five “dimensions of
choice”. This was done to determine which should be taken forward to MCDA.
The Preferred Option
The benefits delivered by investment in Operation NEPTUNE cannot be monetised. Cost
Benefit Analyses and Net Present Value comparisons are therefore not applicable to
determining the relative value for money delivered by various options. Best practice requires
an alternative methodology that allows relative value and thus priorities to be assessed in an
objective, contestable way. For Operation NEPTUNE, MCDA is the most suitable process.
MCDA has a sound NZDF pedigree having been used since 2007 to prioritise the CP Minor.
It was also used in the DMRR process, and in assessing options for the Frigate Systems
Upgrade project.
A Decision Conference was held 29 July 2014 to evaluate short listed activities using an
MCDA model constructed using the Catalyze Equity software. Decision makers, comprising a
mix of levels and functions across the RNZN, scored the options against the agreed criteria
and weighted the criteria. The model output was displayed and discussed to complete the
Decision Conference.
Events and activities considered are listed at appendix 1. A list of participants is at annex A;
prioritisation criteria are listed below:
Operation NEPTUNE – Single Stage Business Case | 15
Figure 1 – Model Structure
MCDA Scoring and Weighting. In the Decision Conference a structured MCDA process
was carried out in which each of the options was scored relative to the others against each
criterion. Criteria were then weighted.
To determine the scores for each option, the group evaluated the level of benefit each option
would deliver for each criterion, relative to the other options. Time constraints meant that for
some groups of activities only the top and bottom preference was established by the whole
group – so that as many participants as possible would be available to then weight the
criteria, and the remaining scoring was done by a smaller group who were able to stay.
After establishing the top and bottom preference for each group of activities, the criteria were
weighted using a process of ‘swing weighting’ that captured the group’s relative preference
for the criteria, considering the relative size of the difference between the options with
respect to that criterion.
The decision makers performed much of the scoring and the weighting as a group, facilitated
by the facilitator to ensure consistency and rigour.
Assumptions. During the scoring process, the following assumptions were made:
Cultural Event
Primary audience is the visiting ships personnel.
Delete ‘Cultural Event’ as powhiri wil cover this.
INR Hospitality
Taxpayers don’t want to fund extravagant celebrations for their own sake.
This is a critical activity in terms of relationships with visiting navies.
Live Theatre
Note extra value for live theatre outside Auckland.
Merchandising
Change from a gift for visiting sailors to:
o
Subsidised merchandise for sale plus.
o
Gift for visiting Commanding Officers.
Output. Following scoring and weighting the group examined outputs from the MCDA
Model. The envelope for all the Project NEPTUNE activities being considered is shown
below. This green area represents the value-for-money delivered by the combination of all
18 | Operation NEPTUNE – Single Stage Business Case
possible activities and the points on the upper surface of this area show the best combination
of options for any defined level of funding – the “efficient frontier”. The figure below shows
the envelope and “F” in a green circle on the efficient frontier – this is where the slope of the
frontier flattens off, so activities further up the efficient frontier are less efficient in terms of the
value delivered by the investment. When presented with the envelope decision conference
participants indicated that the efficient frontier represented a sensible combination of
activities.
Figure 2 – Model Envelope showing the Efficient Frontier
The model structure in Figure 3 shows the outcome after scoring and weighting, and
corresponds to the envelope shown in the table above. In the model structure the green
coloured options (activities) are those on the efficient frontier in figure 2 at, or to the left of the
green F. For the cumulative areas (marked with a “C” at the bottom of the area) al of the
activities in that area up to and including that highlighted activity is included in the portfolio,
while for exclusive areas (marked with an “X” at the bottom of the area) only the highlighted
activity is included in the portfolio.
Items highlighted in pink are “non-frontier options” - they are more expensive and deliver less
benefit (according to the values attributed in the decision conference) than other options
within the same area, so one would never choose them.
Figure 3 – Model Structure after scoring and weighting
Operation NEPTUNE – Single Stage Business Case | 19
Figure 4 – Model Envelope
Figure 5 – Model Structure – Low Impact
Figure 6 – Model Structure – Medium Impact
24 | Operation NEPTUNE – Single Stage Business Case
A decision conference was conducted on 4 March 2016 to update the MCDA analysis of
Operation NEPTUNE activities by comparing the value for money of emergent options to
those already agreed.
Criteria
Criteria were developed in 2014 by the Director Operation NEPTUNE, endorsed by the then
Deputy Chief of Navy, Commodore D.J.R. McDougall and approved by the then Chief of
Navy, Rear Admiral J.R. Steer. The Update Decision Conference used the same criteria as
the 2014 Decision Conference. Although there were different participants in the Update
Decision Conference there was no change of context, so it was appropriate for the same
criteria to be used.
Options
The purpose of the Update Decision Conference was to determine the benefits of new
activities and opportunities relative to one another and relative to the activities Navy is
already committed to. This will assist the Chief of Navy to determine whether the new
activities should be added to Operation NEPTUNE.
The options evaluated in this decision conference were a combination of new activities, and
previously committed activities that have changed significantly in scope and benefits. Most of
the activities were evaluated at a range of levels of funding and output – the MCDA model
was set up so that only one level from a given activity will be selected for a given total project
investment. Events and activity options are described and differentiated by cost at appendix
B.
MCDA Process and Output
MCDA Model
An updated MCDA model was created using the Equity software tool. The model consists of
thirteen towers (areas of activity), five of the areas represent potential new activities and are
marked with an asterisk (*) at the beginning of the titles of those activities, the remaining
eight areas represent activities that have already been agreed upon. Four of the new areas
have three possible levels of activity, for these areas different levels of cost and impact can
be evaluated. The MCDA Model used for this analysis is shown in Figure 8.
26 | Operation NEPTUNE – Single Stage Business Case
Figure 8: Updated Model Structure before commencing the March 4 decision conference
MCDA Scoring and Weighting
The group of decision makers agreed on relative scores against each criterion for the new
activities. They determined the scores by evaluating the level of benefit each option would
deliver for each criterion relative to the other options in the same area.
After establishing the scores for each area of activity, the areas were weighted relative to one
another for each criterion using a process of ‘swing weighting’, this process is cal ed ‘within
criteria weighting’ – it allows the decision makers to ensure their scores are comparable
across all the areas. Swing weighting captures the group’s relative preference for the swing
from the bottom to the top of each area for each criterion. The within criteria weighting
compared the swing for each of the new areas and two existing areas to one another. The
within criteria weights of the existing areas were not changed; they were used to help the
group gauge the magnitude of the swing of the new areas compared to original areas.
Table 7 shows the weights for within criteria weighting. The activities highlighted in pink were
the ones chosen for comparison from the original MCDA model.
Reputation:
Reputation:
Relationships Recruiting
Retention
NZ Tax Payer NZ Opinion
Shapers
* Schools Comp
100
200
0
300
0
* Women At Sea
150
300
80
250
80
* Closing Ceremony
140
160
90
150
40
* Fireworks INR
50
40
40
40
20
Operation NEPTUNE – Single Stage Business Case | 27
Westpac have naming rights for this event.
The High-level of the Women at Sea Area includes a Reception/Function at the
National War Museum with the ‘Golden Girls’ – women who served during World War
II. It is a rare opportunity to recognise these women for their service to our country.
The seminar with female high-ranking guest speakers from the Australian and US
Navies is part of the Medium and High levels of this Activity. If there is no seminar there
is no opportunity to build relationships with these influential women from other Navies
or to realise the value they would add as inspirational role models for our own people.
Closing Ceremony:
It was originally intended that the closing ceremony at the National War Memorial
would be a “Business As Usual” event requiring no specific investment under the
Operation NEPTUNE programme. However, it has been determined that the ceremony
should employ innovative techniques to highlight the sacrifice of those lost aboard HMS
NEPTUNE and the draw the attention of New Zealanders to their naval heritage.
At High-level, it is assumed that light show images will play over a number of nights.
Cloud Fit-out:
The fit-out for the Cloud will be outsourced, and the management of the Cloud will also
be outsourced. These assumptions were considered when determining the Probability
of Success percentage figure.
Output
Following scoring and weighting the group examined outputs from the MCDA Model. The
group agreed that the order that options was consistent with their scoring and weighting
conversations.
The envelope for all the Project NEPTUNE activities being considered is shown below – with
the vertical axis representing cumulative total benefit (the weighted sum of all the scores)
and the horizontal axis representing the cumulative total cost. The green area represents the
value-for-money delivered by the combination of all possible activities and the points on the
upper surface of this area show the best combination of options for any defined level of
funding – the “efficient frontier”. Each point on the efficient frontier corresponds to an option
in the model.
Figure 9 shows the envelope with an ‘F’ in a green circle on the efficient frontier – this is
where the slope of the frontier flattens off. Moving further up the efficient frontier, becomes a
matter of reduced relative return for a given level of investment. The decision conference
participants said that this (the ‘F’ point) represented a meaningful combination of activities.
Operation NEPTUNE – Single Stage Business Case | 29
Figure 9: Model Envelope showing the Efficient Frontier
The model structure in figure 10 corresponds to the envelope shown in figure 9. In the model
structure the options marked with a green ‘F’ (activities) are those on the efficient frontier in
figure 9 at, or to the left of the green F.
30 | Operation NEPTUNE – Single Stage Business Case
decision at hand, including at times, taking part in robust discussion in order to come up with
a mutually agreed answer.
Result
The preparation and setup for this process resulted in a sound Decision Conference where
people from a range of interests and levels in the RNZN were able to participate together and
agree on their preferences for the various activities considered. The resulting model is stable,
yielding an unambiguous Order of Priority.
MCDA Conclusion
At the end of the decision conference the decision makers examined the output and agreed
that it made sense in light of their conversations. They suggested that including the activities
up to, but not including, the fireworks display felt sensible, noting that the Live Theatre
programme had already been committed to, it having been determined that this activity
mitigates the “Auckland centricity” risk identified at the outset of NEPTUNE planning. The
decision makers’ view was based on examining the efficient frontier, where it can be seen
that there is generally a consistent additional value-for-money for each extra activity (the
‘efficient frontier’ is very flat) up to, but not including the ‘Fireworks H’ option. It is
commonplace for groups using such MCDA models to set investment points at ‘corners’ in
the efficient frontier like this.
This would mean the following additional activities would be carried out as part of Operation
NEPTUNE (over and above the previously committed activities):
Closing ceremony (High)
$154K
Women at Sea (High)
$96.5K
Cloud fit-out (High)
$500K
This requires an additional $750,500 of investment, noting that these costs represent a
maximum and in the case of the closing ceremony and the Cloud fit out will be subject to
market testing which is likely to bring costs down.
The MCDA indicates that these additional activities will provide a high level of extra value as
part of the overall Operation NEPTUNE, and in most cases greater value-for-money than
some of the activities that are already in the programme (noting that it is out of scope to
consider stopping or cancelling any of the already committed activities). This suggests the
additional items should be carried out and would enhance the overall value-for-money of the
entire Operation NEPTUNE.
Opportunity Events
In addition to the events and activities subjected to MCDA in the first and updated Decision
Conferences, two worthwhile additional events have come to light that were not considered
during Decision Conferences but which nonetheless could contribute to Op NEPTUNE aims.
These are described as follows:
2016 is the 50th Anniversary of naval aviation in the RNZN – the first Wasp flight was formed
to embark in HMNZS WAIKATO in 1966. The aviation community has been working
exceptionally hard of late; operational commitments have been heavy and the workload
around the introduction into service of the SH2G(I) has been high. An event to mark this
Anniversary would signal appreciation of the efforts of this key naval community and allow
recognition of the contribution made by RNZAF personnel to naval operational effectiveness
34 | Operation NEPTUNE – Single Stage Business Case
in generating and maintaining embarked flights over the years. It is recommended the $15K
be set aside for this purpose.
It is proposed that a number of maritime centric charities be provided with display space in
The Cloud and general profile during the INR. One of these charities is Sea Cleaners, a
maritime environmental clean up organisation. Sir Bob Harvey, former Chair of Waterfront
Auckland by whose generosity The Cloud was made available to us for the INR, is Patron of
Sea Cleaners. In the course of discussion with Sea Cleaners, an opportunity was identified
for Navy to assist with a public beach clean up in the Tamaki Estuary. This has been
organised as a competition, with BCT and JOCT Divisions competing against each other.
Media interest is expected. Had the cost of this been understood it would have been added
to the Decision Conference, but it was thought it could be absorbed in BAU baselines. The
cost is not excessive measured against other activity, however, and it is recommended that
$7K be set aside for this purpose.
Baseline Costs
MCDA has provided an objective basis for determining the relative value delivered by events
and activities where a choice exists as to whether these should proceed, and if so, on what
scale. However, Operation NEPTUNE will incur baseline costs regardless of activity options
selected, and these need to be considered in developing total costs. These costs have been
refined since the original Business Case was submitted and are detailed below:
Port services and security. Visiting ships will meet normal berthage costs, but given
the very large number of warships visiting simultaneously and the complexity of
harbour movements prior to and following the Review itself there may be a requirement
for additional charges associated with the extra burden created on port services. It
would be unreasonable and undesirable to expect visiting ships to bear this additional
cost. Provision is made for $100K for this purpose.
Border Clearance. Border clearance operations will be carried out at anchorages in
the Inner Hauraki Gulf. The clearance operation concept can be executed using BAU
Customs and MPI resources, provided there is no unforeseen disruption to
arrangements, such as an inability to separate visiting ship ETA resulting in a “spike” in
arrivals requiring clearance late in the clearance window. If such were to occur there
would be a need to secure additional Customs and MPI staff resources at RNZN
expense. In addition, it is planned to move clearance teams using Navy RHIBs. If
weather conditions do not permit this it may be necessary to charter a suitable vessel.
$50K is allowed for these purposes.
Fuel Storage Costs. Provision has been made for the storage of bulk fuel in
anticipation of high demand during the fleet concentration period. $70K has been
allocated for this activity.
Street Parade. A parade of assembled ships’ companies through the Auckland CBD is
a “must have” event. The Review could not be considered such without one. There wil
be a requirement for traffic management, refreshments, and other associated costs to
allow the parade to proceed. $20K is allowed for this purpose.
INR HQ/CIS Services. It will be necessary to establish a temporary tactical HQ for
Operation NEPTUNE. It is proposed to use HMNZS NGAPONA facilities for this
purpose. Additional CIS services will be required to support up to 30 people
Operation NEPTUNE – Single Stage Business Case | 35
simultaneously, together with portable radios and the like. $20K is allowed for this
purpose.
Liaison Officer Travel. The success of the review is dependent to a large extent on
effective liaison with visiting ships. [ section 6(a) ]
It is therefore intended that with the
exception of [ section 6(a) ] ships, visiting ships will be provided with an RNZN Liaison
Officer who will join at their last port of call before arrival in New Zealand for the
Review. This will also allow visiting ships’ companies to become acquainted with
cultural and recreational opportunities prior to arrival. $25K is allocated for this purpose
Vehicle Hire. Existing CL vehicle fleets can be drawn on to some extent to meet
transport needs during the Review. However, up to 10 additional cars for liaison
officers and a number of high capacity passenger vehicles will be needed to ensure all
contingencies are provided for. $50K is allocated for this purpose.
Boat Hire. The original Business Case did not make specific provision for boat hire,
which is needed given that a number of ships will be at anchor from arrival Auckland
Thursday 17 November until after the Review by HEGG PM Saturday 19 November.
There is also a requirement to run liberty boats between Auckland and Devonport for
the benefit of ships’ companies berthed at Devonport Naval base. [ section 9(2)(b)(ii) ]
Communications [ s.9(2)(f)(iv) ]
In the original Business Case $200K was allocated
for paid advertising. However, shortly after the Business Case was submitted, the then
Director of the Defence Communications Group (now Defence Public Affairs) advised
that Navy would need to seek external communications agency support as there was
insufficient DCG/DPA capacity given the likely scale of NEPTUNE requirements.
[ section 9(2)(b)(ii) ]
Bus Wrap. Advertising wrap to be placed on two Navy Fleet buses for duration of 75th
Anniversary celebrations. $25K has been allocated for this activity.
Advertising. Notwithstanding the intention to exploit non-paid communications
channels to promote NEPTUNE activities, it may still be desirable to commission
banners and the like for the INR. As these will need to be on a large scale and of
significant quality $50K is provisioned for paid advertising.
Sailor’s Cafe. It is very important that the visitor experience of visiting ships’
companies is positive and opportunities for cultural, recreational, and general tourist
type experiences are made available. It s therefore necessary to establish a visiting
36 | Operation NEPTUNE – Single Stage Business Case
Solomon Islands Campaign Commemoration
$42 615
$75 000
Naval Base Veteran’s Day
$14 636
HEGG Garden Party
$31 800
Sea Cleaners LDG Beach Clean
$7 000
Veteran’s Attendance at Fleet Divisions*
$2 000
50th Anniversary of RNZN Aviation
$15 000
Women At Sea (High)
$96 500
INR Hospitality
$200 000
INR Sports (and Entertainment)
$130 000
$50 000
INR Divine Service
$25 000
$50 000
INR Cloud Exhibition Fit-Out*
$500 000
INR Gifts
$150 000
$200 000
TV Documentary
$120 000
“Navy Players” Theatre Tour
$353 000
$250 000
School Competition
$60 000
$120 000
Operation NEPTUNE Closing Ceremony
$154 000
Museum Exhibitions
$275 000
$75 000
Total Discretionary Costs
$2 176 551
Baseline Costs
$1 315 645
$820 000
Total Programme Costs
$3 492 196
Less Sponsorship (cash and kind FY15/16 &16/17) $950 600
Net Programme Costs
$2 541 596
* Not included in original programme
** Variances explained individually above
*** This is not net Operation NEPTUNE budget impact. Some forms of sponsorship in kind
do not directly offset costs identified in the original Operation NEPTUNE Business Case
[ section 9(2)(f)(iv) ]
but all deliver net savings to Vote Defence.
Exercise MAHI TANGAROA – Offset
NZ is a member of the ASEAN Defence Minister’s Meeting (Plus) forum, a key regional
security mechanism. Membership of the forum entails responsibilities to contribute to its
collective aims. Included in these responsibilities is the hosting of exercises and other activity
38 | Operation NEPTUNE – Single Stage Business Case
designed to increase interoperability and mutual confidence. NZ has a responsibility to host a
maritime security exercise in the 2016 time frame. Exercise MAHI TANGAROA has been
accordingly been scheduled to meet this commitment and to coincide with the INR. $692K in
costs attributed to the INR would be incurred if MAHI TANGAROA were to be held
independent of the INR.
Recommendation
To achieve maximum impact and to reach into as many sectors of New Zealand society with
our Navy’s message as possible, it is recommended that the programme of investment be
adopted at a cost of $2 176 551for discretionary activities and $1 315 645for baseline
activities, for a total programme cost of $3 492 196, offset by $950 600in confirmed or high
confidence cash or kind sponsorship for a net programme cost of $2 541 596. This
represents an increase of $376 596over the original Business Case cost of $2,165,000.
Operation NEPTUNE – Single Stage Business Case | 39
[ section 9(2)(f)(iv) ]
$75 000
Due Nov 16
$54 000
Domestic and
International Flights
$50 000
Cloud Venue for INR
$50 000
Due Nov 16
$50 000
Due Nov 16
$50 000
Due Nov 16
$50 000
Due Nov 16
$50 000
Due Oct 16
$50 000
Due Nov 16
$32 400
Two vehicles for use
until Dec 2016 (18
mnths @ $900 pm
ea)
$25 000
Due Nov 16
$22 700
Accommodation
during INR and
advertising space
$20 000
Due Nov 16
$10 000
Due Nov 16
$6 500
Due Nov 16
$3 250
Due Mar 16
$3 250
Due Nov 16
$6 500
Due Nov 16
$6 500
Due Nov 16
$6 500
Due Nov 16
$6 500
Due Nov 16
Total
$669 000
$281 600
Operation NEPTUNE – Single Stage Business Case | 41
Management Case
Project Management Strategy
The project management aim is to plan and execute a series of events and activities that
enhance the reputation, relationships, retention and recruiting strategies of the RNZN. The
centrepiece event is the INR. Events and activities must be planned and executed to the
highest possible organisational standard. They must be delivered on time, to the scope
defined for each event and activity, and on budget.
The project management strategy is to establish a core planning team within the Naval
Support Command headed by a Captain as Director, Operation NEPTUNE (DON). As the
planning workload increases this team will gradually expand as specialist competencies are
incorporated, until the Operation NEPTUNE team transitions to form a CTG staff under the
Operational Command of the Maritime Component Commander for the execution of the INR.
On completion of the INR the CTG staff will disband, leaving DON and a small core to
conduct wash up and Post Activity Reporting.
Project Organisation and Resources
Phase 1 (Planning): Aug 14 – Dec 15. Complete.
Phase 2 (Detailed Planning, Execution): Dec 15 – Oct 16. Planning for the INR will
intensify in detail from Dec 15 onwards. From this time, the organisation detailed at annex B
will progressively stand up in accordance with the time frames indicated in the key to the
diagram. The Operation NEPTUNE team will plan and execute those events and activities
not forming part of the INR, including a detailed communications plan. DON will report to
DCN throughout Phase 2.
Phase 3 (INR): Oct – Nov 16. The execution phase will begin early Oct 16, at which point
the organisation at annex C will be stood up to execute the following:
Border clearance operations prior to Exercise MAHI TANGAROA and PASSEX.
Auckland anchorage/berth assignment.
The INR, including harbour movements on completion of the Review by HEGG.
All events and activities associated with the INR
Phase 4 (Post INR and Closure): Nov 16 – Feb 17. Following the INR, DON and staff will
progress the following (planning having commenced during phase 2):
A black tie evening event at the naval base to either entirely fund or significantly
subsidise an event for the Navy’s people (below).
A black tie event or bal for the Navy’s people using the same venue and facilities set
up for the above event (to be held on preceding night).
The Operation NEPTUNE closing ceremony and service odf commemoration for HMS
NETUNE at Pukeahu National War Memorial.
DON and core staff will also progress wash up and PAR submission.
Operation NEPTUNE – Single Stage Business Case | 43
Project Governance
As a direct report to DCN, DON will report via the Naval Leadership Board (NLB) and ESM.
He will attend NLB as required, and provide monthly situation reports to DCN covering major
lines of activity, risk status, and financial status.
For Operation NEPTUNE, the NLB is the Project Management Board required under the
PRINCE2 project management methodology.
DON will also be an ex officio member of the Naval Reputation Management Board. This is
to ensure that the linkage between naval BAU communications and reputation management
activity and Operation NEPTUNE is managed.
Leadership/Engagement Strategy
The BBC single stage business case template requires that a strategy for the management
of the change associated with the proposed investment be identified. Operation NEPTUNE
will not bring about change per se – rather it will enhance existing strategies and leadership
themes. However, change management is fundamentally about leadership, and it is useful to
outline at a high level the leadership strategy by which Operation NEPTUNE will be planned
and executed.
Operation NEPTUNE planning and execution will require significant commitment from the
entire naval team, particularly those identified to serve in the Operation NEPTUNE team. It is
therefore important that our people buy in to the general aims of Operation NEPTUNE and
the specific aims of events and activities. This will be achieved by a communications
programme based around articles in Navy Today and by other means as appropriate. DON
briefed all ship, HQ and shore establishment Command Teams late 2014.
Benefits Management
The benefits identified above can be tracked in a number of ways:
Reputation. Should the next government undertake a defence policy review such as a white
paper, it is likely that some form of public attitude survey will be carried out along the lines of
that carried out in conjunction with DWP2010. If this is conducted within a reasonable time
after Operation NEPTUNE, any appreciable improvement related specifically to navy may be
attributable at least in part to Operation NEPTUNE – all other things being equal, and
assuming that the NZDF has not taken part in any particularly successful, high profile activity
over that time.
Relationships. Evidence of a positive impact on relationships with other navies can only be
anecdotal. Nonetheless, if INR events and activities are well conducted, satisfying and
enjoyable for overseas participants, positive feedback can be expected. Such feedback could
be received directly by the naval leadership or reported by CO’s informally and through
Reports of Proceedings.
Retention. Personnel attrition figures are tracked monthly. A marked reduction in attrition
immediately after the INR could be attributed in part to realisation of the benefits identified
above.
Recruitment. The RAN recorded a dramatic spike in recruiting interest following their
International Fleet Review in 2013. A similar spike after the INR and other Operation
NEPTUNE could reasonably be attributed to Operation NEPTUNE.
44 | Operation NEPTUNE – Single Stage Business Case
Risk Management
A risk register will be raised and used as the basis for ESM reporting, and reporting to NLB.
Risks identified at the time of writing this business case and already under treatment include:
Physical attack on INR participants
Insufficient commercial sponsorship for key activities
Activity scope exceeding organisational capacity
Invitation take up from invited navies
VVIP programme integration
Insufficient support from other government agencies and stakeholders
Summary
This Business Case has identified a need to support RNZN strategic goals by investment in a
programme of events and activities to enhance recruiting, retention, our reputation with the
people of New Zealand in support of recruiting and retention, and our relationships with key
maritime security partners. These aims can be achieved by linking this investment with the
75th Anniversary of the foundation of the RNZN. Options for investment were pre-screened
against critical success factors which led to the elimination of some of those originally
proposed. Those that passed pre-screening were subjected to MCDA to determine which
combination of options delivered the best value for money against common evaluation
criteria to produce a recommended programme of investment. This Business case updates
the original programme by subjecting new opportunities for investment to the same
evaluation criteria, again using MCDA, to produce an updated programme. Baseline costs
have also been updated.
Next Steps
This business case seeks formal approval for the allocation of $2,541,596
from operating budgets to support Operation NEPTUNE events and activities.
Annexes:
A.
Multi Criteria Decision Analysis Decision Conference List of Participants
B.
OPERATION NEPTUNE C2 and Staff Structure
Appendix:
1.
OPERATION NEPTUNE Proposed Activities – MCDA Inputs
Operation NEPTUNE – Single Stage Business Case | 45
ANNEX A TO OPERATION NEPTUNE
SINGLE STAGE BUSINESS CASE
MULTI CRITERIA DECISION ANALYSIS DECISION CONFERENCE
LIST OF PARTICIPANTS
Commander
(Chair)
Lieutenant Commander
Lieutenant
Lieutenant
Lieutenant
Sub Lieutenant
Warrant Officer Stores Accountant
Petty Officer Chef
Leading Chef
46 | Operation NEPTUNE – Single Stage Business Case
