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"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
"Benefits-led" Portfolio Management: An Introduction
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"Benefits-led" Portfolio Management: An Introduction

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  • 1. “ Benefits-led” Portfolio Management: An Introduction
    • January 2010
    Daniel Fisher e: daniel.fisher@cambiel.co.uk t: 07906 351008
  • 2. “ Benefits-led” Portfolio Management
    • Introduction
    • What is it?
      • Features
      • Decisions enabled
      • Difference from “traditional” approaches
    • Business Case for “Benefits-led” Portfolio Management
    • Key Implementation Considerations
    • How Cambiel Can Help
  • 3. Introduction
    • “ Traditional” portfolio management has existed for some time:
      • Difficult to find case history of success
      • “ Bottom-up” approach to tracking cost & risk (sometimes to exclusion of benefits) perceived as bureaucratic & non- value-adding in many organisations
    • “ Benefits-led” approach emerging as more strategic alternative:
      • Compelling business case
      • Focus on value and benefits increasingly important in period of economic constraint
      • As Programme and Project Management becomes more mature, gap between business change activity and corporate strategy is highlighted
    • Portfolio management finally offering genuine opportunities to “invest to save” and “invest to accumulate”
  • 4. About Cambiel & Sigma
    • Leaders in “benefits-led” approaches to managing change portfolios and programmes
    • Responsible for some of the largest benefits realisation implementations across public and private sectors
    • Expert in training, coaching and facilitating “benefits-led” mindset, tools & techniques
    • More details at www.cambiel.co.uk
  • 5. Portfolio Management - What Is It?
    • A portfolio is more than just the sum total of programmes and projects. It provides a decision-making framework for optimising the necessary contribution of change to your business strategy. It is not just a reporting overlay on top of your programmes and projects.
    • Portfolio management is the process of:
      • Ensuring that you are doing the “right” things (driving the contribution of business change to your strategy), not just doing things well
      • Engineering the optimum combination of programmes and projects to maximise value (and minimise waste)
      • Monitoring and managing the performance of your change investments at a strategic level
  • 6. Portfolio Management - What Is It?
    • The OGC says that Portfolio Management is a “co-ordinated collection of strategic processes and decisions*” . Some key features:
    Increase sales Reduce costs Develop staff Business As Usual Business Change (Projects & Programmes) Corporate Performance Management Benefits-led Portfolio Management Business Strategy
    • Managed at corporate level, in a similar way to, but additional to, Business As Usual performance management
    • Bridge between top-down strategy & bottom-up business change delivery
    • Proactive control mechanism for executive
    *OGC Portfolio Management Guide Crown Copyright
  • 7. Portfolio Management - What Is It?
    • Benefits-led Portfolio Management is the rapidly-emerging alternative to Portfolio Management in recent practice
    • It addresses the bureaucratic pitfalls which organisations have encountered
    • By building your portfolio around benefits* realisation you can achieve its full potential value (e.g. genuinely increased efficiency and effectiveness), rather than just manage its timeliness and cost
      • Most effective balance of business change and business as usual
      • Optimised Return on Investment from projects and programmes
      • Reduced waste from poorly conceived, planned & implemented change
    *Measurable outcomes of change perceived as positive by stakeholders
  • 8. What Is It? - Features
    • Relationship to Programme and Project Management
    Source: Adapted From New York City Housing Authority and Cisco Systems Not just a “bolt-on” overlay to PPM but a strategic decision-making process OUTPUTS OUTCOMES BENEFITS
    • Defines overall contribution of change to strategy
    • Prioritises benefits required to achieve contribution
    • Makes decisions on commissioning, de-commissioning, sequencing and clustering of initiatives
    • Monitors overall Benefit Delivery Confidence (and Capability Delivery Confidence by exception) & takes mitigating action
    Benefits-led Portfolio Management Programme Management
    • Coordination of Project Delivery, change, dependency and risk management
    • Measurement of Results & Benefits
    Strategic Tactical Nature of Work Project Management
    • Budget
    • Schedule
    • Resources
    • Scope
    • Risks
    • Metrics
    Scale/ Scope of Initiatives
  • 9. What Is It? - Features
    • Permanent support function provides “top-down” strategic analysis and executive assurance, and “bottom-up” support and appraisal to programmes throughout change delivery lifecycle:
    Business Strategy Drivers: P ESTEL
    • Pre-Commissioning:
    • D esirability & Strategic Fit
    • A ffordability
    • F easibility
    • Contextual Commissioning:
    • Investment Appraisal
    • Delivery Confidence
    Events & Occurrences
    • Change Delivery
    • Benefits Realisation
    • Transition to Business As Usual
    Business Planning In-year delivery
  • 10. What Is It? - Features
    • An underpinning portfolio model enables complex decisions to be visualised – showing cause-and-effect of the chosen course of action
    Improve productivity Reduce Headcount Increase Effectiveness Both? OR OR Strategy Alignment? Implement Systems Project Implement Business Change Project Combine systems & change projects to deliver capability programme OR OR  Visualising decisions also aids communication and stakeholder buy-in
  • 11. What Is It? – Decisions Enabled
    •  Create “what-if” scenarios to aid yield and cost planning
    • How should change investment develop to support strategy?
    • What impacts are likely to occur in the short, medium and long-term?
    • Overall net benefit yield?
    • Engineer programmes to increase it? – e.g. by coordinating benefit-related dependencies?
    • Key costs and impacts?
    • Consolidate, sequence and/ or stop programmes to minimise unnecessary impact & maximise gain?
    • Actual or predicted benefits, cost or risk exception?
    • Stop, start, re-sequence, cluster or consolidate programmes to mitigate?
    • Commission programmes into the context of the Portfolio – not just standalone business cases.
    • Reduce double-counting & increase confidence in delivery
    Business Strategy Drivers: P ESTEL
    • Pre-Commissioning:
    • D esirability
    • A ffordability
    • F easibility
    • Contextual Commissioning:
    • Investment Appraisal
    • Delivery Confidence
    Events & Occurrences
    • Change Delivery
    • Benefits Realisation
    • Transition to Business As Usual
    Business Planning In-year delivery
  • 12. What Is It? – “Benefits-led” approaches vs. “traditional” portfolio management
    • “ Traditional” Portfolio Management
      • Often better at reporting cost & risk than benefits
      • Benefits can be a “bolt on” to programmes to justify spend
      • Often retrospective – e.g. focusing on last quarter
      • Sometimes bureaucratic, focusing on reporting rather than decision-making
      • May be focused on “outputs” (e.g. products from a programmes)
      • Business case process may not be integrated with Portfolio Management, and may be “case by case” (ineffective)
      • Often derived “bottom-up,” driven by project & programme delivery functions, & utilising project-level metrics
      • Governance focused primarily on project delivery
    • “ Benefits-led” Portfolio Management
      • Reports benefits, cost & risk – i.e. Return on Investment/ Value for Money
      • Benefits central to design, management & success of Portfolio
      • Predictive – e.g. anticipating risks to benefits from external events
      • Strategic analysis & decisions: reporting by exception. Self-funding through value added
      • Focused on “outcomes” & business changes required to deliver them, as well as “outputs”
      • Replaces current business case/ investment appraisal processes with a more strategic, contextual approach
      • Developed “top-down” by and for executive. Driven by strategic decision-making, not by ease of gathering existing project information
      • Governance focused primarily on benefits delivery
  • 13. The Business Case
    • “ Benefits-led” Portfolio Management:
      • Reduces existing spend by stopping and/or consolidating programmes unlikely to yield a return, or which could do better as part of another initiative
      • Controls ongoing spend by investing only in initiatives with an appropriate return (judged in the context of the Portfolio, not just business-case by business-case)
      • Reduces duplication and waste – programmes designed around benefit-related dependencies (e.g. “enabling” project becomes part of “business change” programme, eliminating a project management overhead)
      • Reduces duplication and waste - coordinates impact of change on the business, reducing “change for change’s sake”
      • Introduces greater objectivity, scrutiny and accountability into investment appraisal and selection – reducing “pet project syndrome”
      • Focuses investments on achieving the “right” commitment and behaviours amongst stakeholders to generate genuine and sustainable improvement
  • 14. The Business Case
    • Fundamentally, this is just Good Management!
      • Relevant skills normally exist in-house
      • Possible to make a one-off investment in skills, processes etc. to “kick-start”
      • Process should be self-funding (through ongoing avoidance of unnecessary cost and waste, and continued value realisation )
  • 15. Implementation Approach
    • Treat as a “benefits-led programme”!
  • 16. Key Implementation Considerations
    • Cultural:
      • “ Delivery” mindset of requirement to demonstrate genuine strategic fit
      • “ Pet projects”
      • Business ownership and accountability for benefits
      • “ Balanced” view of benefits – e.g. non-financial and financial
    • Process & Infrastructure:
      • Avoid perceived bureaucracy
      • “ Benefits catalogue” to track and manage value at Portfolio level
      • “ Architecture” of business activities to minimise unnecessary change
  • 17. Key Implementation Considerations
    • Resource:
      • Permanent central team: skilled at strategic analysis; knowledgeable about programme management and financial management
      • Not necessarily traditional “project office”
      • Effective Portfolio Executive – ideally leadership team or sub-group
    • Information & Technology:
      • Project-level metrics (time, cost, quality, risk) insufficient to enable strategic portfolio decisions: requirement for new dataset (Benefits Delivery Confidence)
      • Ensure currency of information whilst minimising unnecessary data burden
  • 18. Summary
    • “ Traditional” portfolio management has existed for some time:
      • Difficult to find case history of success
      • “ Bottom-up” approach to tracking cost & risk (sometimes to exclusion of benefits) perceived as bureaucratic & non- value-adding in many organisations
    • “ Benefits-led” approach emerging as more strategic alternative:
      • Compelling business case
      • Focus on value and benefits increasingly important in period of economic constraint
      • As Programme and Project Management becomes more mature, gap between business change activity and corporate strategy is highlighted
    • Portfolio management finally offering genuine opportunities to “invest to save” and “invest to accumulate”
  • 19. How Can We Help?
      • Using a “maturity model” approach, we will help you to articulate the benefits of this approach to you and to your organisation
      • We will help you to plan and achieve the benefits, through enabling you to generate a self-sustaining momentum
      • We will underpin this with a customised set of industry-leading processes and tools. This is not about software (although itmay be useful down the line), but about a new model of benefits-led decision-making
      • “ Do it • Train it • Support it • Put it Right • Review it • Assure it”
  • 20. What’s the first step?
      • We recommend an Initial Portfolio Review using our maturity model derived from P3M3 with additional benefits realisation focus
      • The review will allow you to position your organisation on the spectrum of how “benefits-led” you need to, or would like to become. This will help to define the scope and scale of your potential change programme – from small and un-daunting to larger and challenging.
      • Whatever you conclude, we are here to support you.
      • “ Do it • Train it • Support it • Put it Right • Review it • Assure it”
  • 21. Selected Clients & Case History
      • Associated British Foods plc
      • Criminal Records Bureau
      • DCSF/BECTA
      • Metropolitan Police Service
      • Ministry of Justice NOMS
      • Home Office
        • IMPACT Programme
        • Information Assurance Programme
      • National Policing Improvement Agency
        • Mobile Information Programme
        • Portfolio Development Unit
        • Technology Product Management Unit
        • ISIS Programme
        • Forensics21 Programme
        • Equality and Diversity Strategy
      • UK Borders Agency
    • Large National Portfolio:
    • c. £180m p.a. spend
    • High profile national IT & business change programmes
    • No method of coordinating, aligning or stopping programmes. Considerable duplication & waste.
    • Cambiel team provided end-to-end process & tools, data collection & analysis, strategic review, governance recommendations & mentoring on new approach.
    • Complete overhaul of commissioning & investment appraisal. Fewer programmes started, more being stopped and/or consolidated into more effective units. Complex multi-agency governance has complete visibility of the Portfolio for the first time. Can now make forward-looking decisions about prioritisation & resource allocation.
    • Approach cited as “good practice” by OGC
  • 22. e: info@cambiel.co.uk t: 01449 737867 www.cambiel.co.uk
    • 20-22 Bedford Row, London WC1R 4JS
    Questions and Further Information?

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