3.3. Value Name: Value Statement: Government business initiatives and investments must represent value for money and return a business benefit. Rationale: • The value and cost of investments need to be measurable in objective terms. A government service that does not have an understood return on investment (ROI) is unlikely to receive the on-going support and commitment that will make it sustainable. • Service delivery can create complicated cost/benefit models, particularly where there are cross-jurisdictional boundaries. The benefits realized through a service may not be recorded by the program and/or programs that are required to invest. A thorough understanding of the costs and benefits is required to establish an appropriate investment model to support the creation and on-going management of the service. • It is mandatory for programs to meet the GC procurement rules for: o value for money, o encouraging competition, o efficient, effective and ethical use of resources, and o accountability and transparency. Implications: • Business initiatives will need to be fit for purpose and deliver value and benefit. • Business initiatives will need to be prioritized in terms of their relation to the GC and department vision, policies, strategies and plans. • The department will need to assess the ROI for each business initiative. • Public ROI should be based on the department taking a rewards-based approach to ROI measurement and encompass the following three areas: o Financial ROI: Traditional or “classic” measurement of financial gains with quantifiable results. These ROI is direct, measureable benefits and costs e.g., reduced transaction costs (such as in procurement by reducing the cost creating a purchase order from $28 to $21) or fewer steps in the workflow of approving a budget request o Social ROI: Impact of government services on a societal level This ROI is indirect and difficult to measure public good benefits and costs e.g., are citizens safer? Are children in a particular jurisdiction receiving adequate social services? Are the vulnerable receiving sufficient support? o Political ROI: Impacts the system of governing and policy decision making. This ROI is motivational feasibility of the project, or the benefits of interested parties (champions, opponents, decision makers) e.g., are we delivering government programs that match policies, legislation and mandates? Are we delivering on the promises of our politicians? • In addition to assessing the public ROI for each business initiative, a total cost of ownership (TCO) approach will be required. The TCO will need to assess the investment against other priorities, as well as balancing the costs of development, support, security, risk mitigation, disaster recovery and retirement against the costs of government’s requirements for flexibility, scalability, ease of use and reduction of integration complexity. • There will need to be improved whole-of-government usage of business benefit management and benchmarking, References: • Australian Government Enterprise Architecture Principles (PR-4)