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.
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
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
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.
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.
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.
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?