ICT Investment Approval Process

Is your agency bringing forward a digital or ICT enabled proposal that is likely to have financial implications of $30 million or more? If so, you may be subject to the ICT Investment Approval Process (IIAP) – including proposals that will be partly or totally funded internally.

The ICT Investment Approval process aims to assist entities to develop robust business cases and support the effective implementation of digital and ICT-enabled proposals.

What do I need to do?

Agencies must notify the Digital Transformation Agency’s (DTA) Investment Advice, Contestability and Assurance Branch, by emailing investment@dta.gov.au. This should be done as soon as an agency intends to bring forward a digital and ICT enabled proposal. Early engagement allows the DTA to provide advice on the development of the proposal.

For Whole-of-Government initiatives and platforms, the agency leading the digital and ICT build must consult with the DTA.

The DTA will assess the proposal’s eligibility for the IIAP based on the criteria outlined on this page. The agency may be asked to provide further information to support the assessment at this point, including a Risk Potential Assessment Tool (RPAT) for the proposal.

For proposals subject to the IIAP, entities are requested to follow the timeframes specified by the DTA to submit draft and final business cases (including supporting materials) for review. This generally requires entities to provide draft business cases at least 7 weeks prior to the Cabinet consideration date, and final business cases at least 1 week before circulating the Cabinet Submission for coordination comments. The DTA will advise agencies of the timeframes when advising them if the proposal is subject to the IIAP.

Does the IIAP apply to my proposal?

If you have a new policy proposal or an internally funded proposal for Cabinet consideration, the ICT Investment Approval process will apply if your proposal:

  • is digital and ICT-enabled (the policy or service delivery outcomes are highly dependent on the underpinning digital and ICT system)
  • has a total whole-of-life cost estimated to be $30 million or more, including total whole-of-life digital and ICT costs of $10 million or more. Whole-of-life costs must include operational costs, capital costs, and maintenance costs
  • is assessed by the DTA as high risk through consideration of a Risk Potential Assessment Tool (RPAT) assessment. This risk may relate to factors such as significant change, cost, technical or business complexity, workforce capacity, and schedule.

Note: Cabinet may request that your proposal undergo the process, even if it does not meet all of these criteria.

Digital and ICT-enabled proposals subject to the IIAP go through a staged approval process (formerly known as the ‘two pass’ Cabinet approval process). At each stage of approval, agencies must develop a business case. This ensures that the Cabinet and its relevant committees have sufficient information about the proposal to make an informed investment decision

The DTA can work with you to determine the minimum business case requirements relevant to your proposal. The process is designed to be flexible to cater for different types and complexities of ICT enabled proposals that require Cabinet approval. For example, second pass may result in a one-off approval process, or for more complex proposals, subsequent stages may be required.

In developing your business cases, you must consider how your proposal aligns with Whole-of-Government ICT Standards and Policies, including Cyber Security.

You should also contact your Chief Finance Officer (CFO) unit to ensure that you are aware of and comply with current Department of Finance Estimates Memorandums, covering the Budget Process Operational Rules and the ICT Investment Approval process.

First Pass Approval

At first pass, you will explore realistic ICT options to deliver the outcomes of your proposal.

The purpose of a first pass business case is to provide a sufficient level of information on the benefits, costs, risks and range of digital and ICT implementation options for a proposal to enable an informed in-principle decision on the investment.

The business case must present:

  • a clear strategic narrative that demonstrates business needs are aligned to policy objectives, underpinned by well-considered use of digital and ICT
  • realistic digital and ICT options to deliver the outcomes of the proposal and strategies to manage associated risks, that can each be realistically implemented by Cabinet approval and further addressed at second pass business case
  • an indicative cost estimate over the lifetime of the project, benefits (financial and non-financial), and an indicative schedule for each option.

Where possible, entities should use existing resources to develop the first pass business case.

Subject to the Budget Process Operational Rules, a first pass proposal may include a bid for additional funds for activities that will assist the development of the second pass business case. This includes development of second pass business case documentation, prototyping or piloting activities where required.

You will find further information and guidance about the structure of your first pass business case in the templates section.

If Cabinet provides in-principle approval for your proposal, including 1 or more of your ICT options, you will proceed to second pass to fully develop the option/s for further consideration by Cabinet.

Second Pass Approval

At second pass, you will fully develop a business case for the ICT option/s that received in‑principle approval from Cabinet at first pass.

The purpose of a second pass business case is to build further detail on the option(s) agreed by Cabinet for further development at first pass to enable an informed final decision on the investment. The second pass business case will contain risk mitigation strategies, detailed cost estimates, appropriate funding options and provide assurance that the planning, consideration and consultation required for successful implementation has been undertaken.

The second pass business case must also:

  • provide sufficient detail to inform Cabinet decision-making on what will be delivered, the delivery schedule, benefits and the realisation schedule, risks and mitigation strategies, and monitoring and reporting arrangements that will support implementation
  • include a detailed cost estimate based on
    • rigorous planning of required digital and ICT infrastructure, applications and support
    • a combination of one or more methods such as proofs of concept, approaches to market (if available), external expert advice, other similar domestic and or overseas implementation, and independent market assessments
  • address the development and procurement of the proposal by detailing how each digital and ICT option could be acquired and delivered to deliver capability and benefits with reduced risk
  • detail the governance of the proposal, which must specify:
    • how progress will be monitored and measured
    • how emerging risks will be addressed
    • when regular progress reports will be provided to Government; and
  • detail the assurance activities which you have agreed with the DTA, will be applied to the proposal, such as Gateway Reviews.

You will find further information and guidance about the structure of your first pass business case in the templates section.

Once you have developed your second pass business case, your Minister will seek Cabinet’s agreement to proceed with the proposal.

Combined pass approval

In some circumstances, the relevant portfolio Minister may seek agreement from the Prime Minister or Cabinet to bring forward a second pass business case for Government consideration without first bringing forward a separate first pass business case. These circumstances may include:

  • when there is a clear and urgent business need for investment
  • when rapid implementation is needed, and/or
  • when there is only one workable implementation option or a number of highly developed implementation options.

Authority from either the Prime Minister or Cabinet must be granted before the relevant Portfolio Minister brings forward the proposal. The supporting business case must also meet second pass business case requirements set out in the IIAP guidelines.

How does the DTA review my business case?

You should submit your business case to the DTA by emailing investment@dta.gov.au. Once you submit your business case, the DTA will review your proposal and business case.

The DTA will review the business case to ensure your proposal aligns with whole-of-government digital and ICT policies, standards, and best practices.

You will be provided with feedback and guidance about any refinements or changes that may be necessary to ensure your business case meets the requirements of the ICT Investment Approval process and provides Cabinet with the best information possible to support their decision. This may result in multiple draft business cases being submitted for review prior to finalisation.

The DTA can discuss and provide feedback on draft business cases and proposals as they are being developed. By engaging with the DTA as soon as possible, you will be able to receive early advice and help streamline the review process.

You will also need to provide your business case to the Department of Finance to facilitate the costing process and ensure that costs can be agreed in a timely manner. Costs for the digital and ICT-enabled components of your proposal must be agreed with the Department of Finance.

The DTA and Finance will work closely to exchange information that you provide to minimise unnecessary duplication of work for agencies.

How does the ICT Investment Approval process align with other assurance processes?

The DTA has Whole-of-Government responsibility for managing strategic coordination and oversight functions for digital and ICT investments, including during the delivery phase. The DTA will separately provide advice and ongoing oversight of assurance arrangements to ensure assurance is applied effectively to maintain delivery confidence in implementation of the proposal.

Proposals may also be subject to other oversight and assurance activities, including the Australian Government Assurance Reviews Process (Gateway Reviews and Implementation Readiness Assessments) administered by the Department of Finance

The ICT Investment Approval Process complements the Gateway Review Process for ICT enabled proposals.

The difference between these processes is that the IIAP is designed to inform Cabinet prior to an investment decision. The Gateway Review Process on the other hand is designed to help the delivery agency by providing independent advice through development and implementation of the project or program.

You should refer to the current Department of Finance Estimates Memorandums covering Assurance Reviews and Budget Process Operational Rules, available through your Chief Financial Officer, for further information.

Where can I find additional information?

If you have any queries concerning the process or its application to particular ICT enabled proposals, please contact  Investment Advice, Contestability and Assurance Branch by emailing investment@dta.gov.au

Templates to download

The following resources will assist you in developing your business case: