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Benefits focused portfolio management - beyond project delivery!
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Benefits focused portfolio management - beyond project delivery!

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During his many years of working with project delivery organisations, Matt has observed that the outcome of numerous projects was not consistent with the capital investment value or the benefits …

During his many years of working with project delivery organisations, Matt has observed that the outcome of numerous projects was not consistent with the capital investment value or the benefits expected by stakeholders. A common theme across these projects was a disconnect between the strategic objectives of executive management and the remit of the delivery team, who are focused on managing projects and delivering the scope of work.

This presentation will explore the emergence of Benefits-Focused Portfolio Management as a methodology which encomapsses tradtional management methods, but adds emphasis to the collaboration of all stakeholders in the pursuit of organisational goals. In particular, a structured approach for managing business endeavours to deliver change and benefits commensurate with investment value will be discussed.

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  • 1. Matt WilliamsPMP MAIPM Managing Director Connexion Systems Benefits-focused Portfolio Management: beyond project delivery
  • 2. Transforming project outcomes Into stakeholder value About Connexion Systems Connexion Systems knowledge areas: • Benefits Realisation Management • Project Portfolio Management • Project Investment Management • Best Practices (PRINCE2, MSP, P3O) • Project Controls (Schedule, Earned Value) Enterprise Systems = People + Process + Tools
  • 3. Transforming project outcomes Into stakeholder value Some of our Customers
  • 4. Transforming project outcomes Into stakeholder value What is the problem? • Major improvement in the maturity of project delivery PRINCE2, PMBoK Project Risk Mgmt (AS4360) • But project ‘success’ rates are not improving: (Standish)
  • 5. Transforming project outcomes Into stakeholder value “A measurable improvement resulting from an outcome perceived as an advantage by one or more stakeholders”. -UK Government Cabinet Office “A business outcome that delivers value to the organisation.” -NSW Department of Finance & Services Benefits defined
  • 6. Transforming project outcomes Into stakeholder value “The identification, definition, tracking, realisation and optimisation of benefits at initiative and portfolio level.” - Steve Jenner, Managing Benefits (APMG) Benefits Management defined
  • 7. Transforming project outcomes Into stakeholder value Why Now? • Benefits Realisation is not a new idea • So why is there so much interest right now?  Uncertain economic times  Shrinking Budgets  Demanding Customers  Globalisation • Mean we need to get it right the first time
  • 8. Transforming project outcomes Into stakeholder value The Objective • Select the right projects that contribute to strategic objectives that deliver the necessary change to the organisation • Create accurate, validated business cases • Maximise return on capital investment Track and report on the benefits being realised during and post execution
  • 9. Transforming project outcomes Into stakeholder value What is the Problem? Traditional approach is:  Define the business case,  Get approval and funding,  Hand over to the project delivery team  Monitor progress  Receive the finished product/output
  • 10. Transforming project outcomes Into stakeholder value Problem 1- Responsibility Either: a) the project/programme is made responsible for benefit realisation, or b) No-one is! Project/Programme managers are focussed on delivery, not business benefits Time/Cost/Quality are their measures of success
  • 11. Transforming project outcomes Into stakeholder value Project Handover Process Project Benefits
  • 12. Transforming project outcomes Into stakeholder value Problem 2 - Visibility • The link between project outputs, capabilities, outcomes, benefits and goals is often unclear or poorly defined • This means we lack early-warning indicators of missed goals and outcomes
  • 13. Transforming project outcomes Into stakeholder value
  • 14. Transforming project outcomes Into stakeholder value Problem 3 - Validation No processes or systems in place to validate benefit estimates (assurance) This can lead to optimistic estimates Double-counting can occur Need to validate assumptions during execution Complex models without appropriate supporting processes and tools can lead to errors
  • 15. Transforming project outcomes Into stakeholder value BenefitsProject Benefits Benefits Benefits Benefits Project Project Project Project Optimistic Estimates example
  • 16. Transforming project outcomes Into stakeholder value BenefitsProject Benefits Benefits Benefits Benefits Project Project Project Project Optimistic Estimates example
  • 17. Transforming project outcomes Into stakeholder value Project Project Project Assumption Goal Capability Business Change Benefits Double counting example
  • 18. Transforming project outcomes Into stakeholder value Complex Model example Complex to build, impossible to maintain – a calculation sheet for a single benefits can have up to 5-deep linked files and be spread across multiple sheets within the files. Addressing the issues - the more complex the model is to maintain the less integrity there is around with the numbers overtime and the less accountability and ownerships it will have. Add on top the inefficiency of management it on an ongoing basis.
  • 19. Transforming project outcomes Into stakeholder value Benefits-focused Approach • Many organisations only perform the first step • Need to follow a defined lifecycle, that includes the whole Benefits Realisation team • Strong governance with clear accountabilities and a defined framework
  • 20. Transforming project outcomes Into stakeholder value Benefits Identify Plan Realise Evaluate Payback Programme Definition Delivery Project Initiation Delivery Benefits-focused Approach
  • 21. Transforming project outcomes Into stakeholder value Step 1 – Identify • Ideally, this should occur before the establishment of an initiative, not after. • First, identify the stakeholders • Then, identify the intended benefits and their ownership • This encourages a collaborative approach to Benefits Identification, and attains buy-in from all parties
  • 22. Transforming project outcomes Into stakeholder value Step 1 – Identify • Three Column Analysis technique involves asking 3 simple questions, and using the answers to graphically develop a benefits pathway in one page. • Represents how current business problems can be addressed to achieve the desired benefits.
  • 23. Transforming project outcomes Into stakeholder value Step 2 - Plan • Benefit Maps are a ‘road map’ to support understanding and management of the complexity inherent in the benefits realisation process. • A Benefit Map is normally created from Right to Left (Starting with the end in mind). • The Benefits identified in this map become the measurement points for tracking benefits realisation.
  • 24. Transforming project outcomes Into stakeholder value
  • 25. Transforming project outcomes Into stakeholder value Step 2 - Plan • If a benefit is “a measurable improvement resulting from an outcome perceived as an advantage by one or more stakeholders”, • Then the ability to measure these improvements is essential in order to quantify the benefits achieved. • A Benefit Profile allows us to set a time-phased target benefit value, against which we can track the improvement over time.
  • 26. Transforming project outcomes Into stakeholder value Benefit Profile
  • 27. Transforming project outcomes Into stakeholder value Step 3 - Realise • Take measurements at pre-defined intervals  Responsibility can be assigned to appropriate person (eg in HR, Payroll, IT etc) • Automate where possible  Semi-automated - Notifications (email, dasboard etc)  Fully-automated – Integrate with source systems
  • 28. Transforming project outcomes Into stakeholder value Step 4 - Evaluate 3 key activities for evaluating outcomes/benefits: 1. Compare and Verify 2. Report the Results 3. Take Corrective Action where necessary
  • 29. Transforming project outcomes Into stakeholder value Step 4 - Evaluate • Monitoring, reporting and escalation of actual vs. targeted performance is supported by the benefits reporting function. • It provides realisation progress and informs corrective actions required. • A continuous process that commences as soon as business change starts to be delivered. • In the post implementation phase, reporting should continue beyond program closure.
  • 30. Transforming project outcomes Into stakeholder value
  • 31. Transforming project outcomes Into stakeholder value
  • 32. Transforming project outcomes Into stakeholder value Conclusion A Benefits-focused Portfolio Management approach leads to more successful outcomes by: 1. Assigning responsibility for realisation to those who can make it happen (the business) 2. Defines visibility of the link between project outputs, outcomes and business objectives 3. Validation of the estimates and assumptions made, using a consistent, repeatable and verifiable process
  • 33. Transforming project outcomes Into stakeholder value Remember • … to get the best benefits from application investments, • The first step is actually trying to measure the results. • Only 37% of companies actually measured their business cases at least once after go- live. Bill Swanton, Gartner 2011
  • 34. Matt Williams PMP, MAIPM Managing Director Connexion Systems Pty Ltd E: mwilliams@connexion.com.au M: +61 414 847 040 www.connexion.com.au QUESTIONS?