Identifying and managing benefits masterclass

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APM Benefits SIG masterclass: Identifying and managing benefits 19th June 2013. Nick Wensley, Peter Glynne, Hugo Minney and Neil White

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  • Importance of Portfolio, aligning the Strategic Objectives and constraining to Corporate Governance. Everything within constraint of a single portfolio – avoid double-counting by defining measurement and collecting results at Portfolio level Not getting into discussion on definition of Programme and Project Motivating people (activists) Analogy with flying an aeroplane
  • We’ll come on to this in the Benefits Lifecycle section
  • You have the whole of the space in The Innovation Space, but please don’t go outside Please be back in time for 2:30 start on Benefits Lifecycle This forms the foundation for the next exercise so feedback will be after the next exercise
  • 2:30 start
  • Lots of reports on Project Management, you will probably recognise a lot of them including Standish Chaos reports
  • 5 criteria for success used by PwC – Iron triangle Business Objectives On this basis 68% fail. 60% of failure is due to internal problems in particular failure to plan. You wouldn’t trust a pilot to fly you across the Atlantic who had just completed an online course and got a certificate – you’d want to see ability and experience. Do you let novices loose on your big project investment?
  • Some reports where PAC and MPA are asking to see benefits, or align delivery with benefits
  • Strategy dictates what are the gaps that need filling, whether Opportunity Response to legislation change (what would it have cost to comply without change?) Cost improvement Benefits the WHY of projects Four stages of Benefits Management, starting with the idea and proposal to start an OBC and BC. Benefits Planning will influence decisions during project/ programme delivery, to optimise benefits Not constrained by tolerance on the upside, although on downside always consider changes in the environment (cost of finance, key skills etc) which might pull rug from business case Handover and commitment by frontline staff to realise benefits Benefits Review leading to further optimisation, perhaps without a new project
  • Note: MSP Benefits Map (p62), Benefits Logic Map (p65) or Investment Logic Map (p32) not used. Some factors to help decide when each of these methods should be used: Where are you in the process? If change are underway then the value to gained through stakeholder inclusion is lost. Use value mapping or results chain. If at beginning or cycle then those techniques that major on drivers and objectives could be favoured. Is consensus desirable or sought? Bradley BDN enables stakeholder participation. How large is the programme? Value Mapping favours large initiatives. Objective and benefits relational maps may get unwieldy. Benefits Management Capability maturity of organisation? Choice of mapping technique could be made to favour existing capabilities of personnel.
  • Cassandra / Cranfield Benefits Dependency Network (developed 2006) Given understanding of prevailing change drivers: Work to right to identify strategic objectives. Objectives are analysed and mapped to benefits to be realised on meeting of objectives. Each benefits is now mapped (right to left) to the changes needed to realise it. This approach recognises the fact that some business changes themselves required to be enabled by upstream changes e.g. IS/IT  Working from Right (the Future) to Left What we want What we have to become to get what we want What we have to do to become what we need Working from Left (what we’re doing) to Right Justify a previous decision Find a return for the investment Strengths Simple – can be done in 15-30 minutes Clear linkage between change in the environment and change in the project Collaboration and group working is easy Weaknesses Without good facilitation can become unnecessarily complicated Confusion over definitions and failure to align in neat columns (this project leads to this benefit which leads to this project …)
  • Results Chain (DMR/Thorp) Provides a graphical representation of the vents and conditions required to achieve stated business outcomes. Four components: Outcomes (benefits) – circles Initiatives – squares Contributions – shown as arrows Assumptions – hexagons Strengths Impact of change in environment or programme/project delivery easy to follow Tasks associated with benefits Promotes discussion Consensus building Shared agreement of how changes will add value Use of Assumptions makes implicit thinking explicit and therefore open to debate Weaknesses Typically maps from the activity to find outcomes Unlikely to unearth new information – usually done by Project Team rather than all stakeholders From single project, benefits may multiply (leading to double-counting)
  • Gerald Bradley’s Benefits Dependency Map - Neil Dependency path from required enabling changes through to objectives. Three stages: 1 - Building a Strategy Map of linked objectives ( maybe 10 to 16) to explore objectively what the changes must achieve – arrive at 2 to 4 ‘bounding objectives’ to scope the programme 2 - Creating a Benefits Map for each ‘bounding objective: For each bounding objective a Benefits Map is developed. This is developed by working from right to left from the objective, identifying, at each stage, a set of directly contributing benefits. The test for each set is that they are: Collectively sufficient Individually necessary Mutually independent Likely to lead to different kind of change needs 3 - Transforming the resulting Benefits Map into a Benefit Dependency Map : Add the business and enabling changes needed to enable the delivery of the benefits. Strengths Provides a clear line of sight from changes through to objectives - a logical flow Particularly effective in engaging and gaining buy-in from Stakeholders Cane be used to depict progress being made in achieving objectives – benefits can be weighted to show contribution to objectives/ Weaknesses Maps can get complicated – this can be reduced by depicting only bounding and end benefits
  • What is point regarding explicit and implicit objectives? * VERY IMPORTANT AND USUALLY MISSED I think that the context should explicitly position the people factor. * TOO EARLY – IT COMES UP LATER
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  • What is point regarding explicit and implicit objectives? * VERY IMPORTANT AND USUALLY MISSED I think that the context should explicitly position the people factor. * TOO EARLY – IT COMES UP LATER
  • What is point regarding explicit and implicit objectives? * VERY IMPORTANT AND USUALLY MISSED I think that the context should explicitly position the people factor. * TOO EARLY – IT COMES UP LATER
  • Identifying and managing benefits masterclass

    1. 1. Benefits in Practice SeriesIdentifying and Managing Benefits19th June 2013The Innovation Space, BIS
    2. 2. Agenda1:30 Welcome and Introductions1:45 Setting the Context: Corporate Strategy and Benefits2:10 Case Study Exercise 1 (groups of 3 participants)2:30 Benefits Lifecycle» Benefits identification and modelling3:00 Case Study Exercise 2» 3:30 Feedback to group (content)» 3:50 Aligning Benefits Realisation to the widerorganisation» Ownership, Governance and Convergence4:25 Summary and Close
    3. 3. Introduction to Presenters Peter Glynne – Co-Chair of Benefits Management SIG Nick Wensley – Co-Chair of Benefits Management SIG Neil White Hugo Minney PhD
    4. 4. What are you going to get from this afternoon? Establish a strong base of practical experience Consider different approaches to benefits identification andmodelling Consider new ways of thinking and how to drive innovation Explore effective benefits leadership Network and share experience
    5. 5. Setting the ContextCorporate Strategy and Benefits Realisation“A world in which allprojects succeed”APM’s 2020 VisionImpossibility or deliberatelyaspirational?
    6. 6. Discussion Point:What does Benefits realisationmean to your organisation?In three words or less…..
    7. 7. MeasurementActivistsFull Cycle GovernanceA future in which all projects succeed… RightThings RightWay DoneWellPortfolio ManagementLeadership, Alignment, Value Optimisation,Programme selection, Portfolio AdjustmentProgrammeManagementBusiness Sponsorship, Ownership, Coordinatecomplementary and interdependent projects torealise …Project ManagementManagement of budget, schedule andresources to deliver …CapabilityBenefitsStrategicObjectivesGetting BenefitsJohn Thorp
    8. 8. A future in which all projects succeed Engage the right people in the business – so they want success Effective cross-boundary working and decision-making at executivelevel Incentivise organisational convergence to pull together work onbusiness benefits Recognise the need for agility and flexibility … instead of just workingto the next milestone A clear connection with corporate strategy. The ‘WHY’ of projects.
    9. 9. Case Study Exercise 1HS2 Context and Strategic objectives 20 minutes in groups of three Consider the following Nathan Coyne article:http://www.politics.co.uk/news/2013/05/09/make-the-case-for-hs2-benefits Identify the top six stakeholder groups From the point of view of DfT: Consider six points of strategic valuefor their investment in HS2
    10. 10. Benefits LifecycleBenefits Identification and Modelling
    11. 11. All the focus has been on the success ofProject & Programme Management……
    12. 12. What makes Project Management successful? Project Management Success Criteria– Time / Budget / Quality– Business Objectives and Business Benefits PwC 2012 – greater maturity, higher success rate– Use an established method for project management– Use certified practitioners (you wouldn’t trust a pilot . . )In a nutshell: Professionalism….
    13. 13. Should we not apply the sameprofessionalism to Benefits Realisation?
    14. 14. The Benefits LifecycleA Strategic and Integrated Approach based on partnership
    15. 15. Benefits Mapping – Some TechniquesConsidering specific aspects of HS2 Cassandra Benefits Management model (Cranfield) Results Chain (DMR / Thorp) Benefits Dependency Map (Bradley) Benefits Value Mapping (Glynne)The benefits map or model is ONLY as an aid to communication and decision making. Itmust be simples, easy to understand and easy to communicate.Too many models are only understood by the authorKey Point
    16. 16. Cassandra / CranfieldENABLERSENABLINGCHANGESBUSINESSCHANGESBUSINESSBENEFITSINVESTMENTOBJECTIVESTreasuryguaranteesPlanninglawsPublicconsultationInvestmentRoutes forlineLinkedinvestmentStationsandcommunitytravelHigh SpeedlineJourneytimesLinkeconomiccentresMajorinfrastructurebuild
    17. 17. Results Chain (DMR/ Thorp)HS2HS2ShorterCommuteTimesFasterMorereliableShorterBusinessMeeting journeytimesWorkLondon, Livein regionsWork inRegions,morebusinessRegionalEconomicGrowthconstraintis journeytimemoremeetings= morebusinessLastMileLastMilePricePricePhase2Phase2LegislationtocompulsorypurchaselandLegislationresourcerelease
    18. 18. Benefits Dependency Map (Bradley)To IncreaseRegionalEconomicGrowthTo increasejobs inregionsTo widenlabour poolTo increasepassengersatisfactionReducecommute timeShortermeetingjourney timeIncreasedUK TradingImprovedGDPIncreasedregional spendMore goodworkers attractedto LondonHSR BillHS2 HybridBillLink economiccentres (∅ 2)Link Midlands toLondon (∅ 1)ObjectiveBenefitBusinessChangesEnabler Disbenefit
    19. 19. Named NewCapabilityProject, Programme orPortfolioNewCapabilitiesStrategicValueOperationalBenefitsStrategicObjectiveEffectivenessStrategicObjectiveEffectivenessStrategicObjectiveEffectivenessAction led worddescribing theOperationalBenefitABenefit Type (1 of 5)How to Read the Benefits Value Map.....New tangible capabilities directlyattributable to the investment in theproject, programme or portfolio. Newto the business area or organisatione.g. What we are buying for ourinvestment?Operational, functional day to day benefitsrelevant to the organisation Five types ofoperational benefit to enable consistencyand comparability. KEY LINK TOOPERATIONAL PERFORMANCEMANAGEMENTA dashboard is developed for everyoperational benefit showing keyperformance indicators, priority rankingand ownershipThere must be a directcorrelation/relationshipfrom a capability to anoperational benefitFive Types of Operational Benefit CRITICAL TO MEASUREMENT1.Time – measured in hours, day, weeks etc.2.Cost – measured in £3.Satisfaction/Assurance – measured by a before and afterperception survey showing a measurable improvement4.Income – measured in £5.Disbenefit – the negative consequences of change - measuredusing one of the four types described aboveThe colour boxes highlight thecontribution of the operational benefit tostrategic value in the bottom row. Itmust reflect the organisation’s orgroup’s business plan or strategyUnique identifier foreach operationalbenefitShowing the contributionof individual operationalbenefits to the businessplan or strategy. Twocategories:1. Efficiency2. Effectiveness
    20. 20. Benefits Value MappingOperationalBenefitsHowwillitchangeourperformance?StrategicValueHowwillitcontributetostrategy?NewCapabilitiesWhatareweinvestingin?Time TimeIncomeTimeIncomeCostSatisfactionAssuranceINCREASEDECONOMICINVESTMENT INREGIONSEffectivenessINCREASEDPASSENGERSATISFACTIONWITH SERVICESEffectiveness?Effectiveness?EffectivenessABCDEFGHIJFocus on change, business performanceand measurement
    21. 21. Exercise 2 – HS2 Benefits atoperational level 30 minutes in threes Partially completed template – fill in thegaps Share from your group – please nominatespokesperson (1 minute feedback time)– Results of discussion on HS2
    22. 22. Aligning Benefits Realisation tothe Wider OrganisationOwnership, Governance and Convergence
    23. 23. Benefits RealisationCommon Behaviours across organisationsAnd there’s always the impact of the media.....
    24. 24. CONVERGENCEWhat are the Opportunities forcollaboration?OperationalPerformanceManagement FinancialForecasting/BudgetingStrategicPlanning andEvaluationBenefitsRealisationPMOChangeManagementEver increasing professionalism in the management of change within organisationsCommunications(internal andexternal)
    25. 25. Benefits Realisation: Effective Partnership WorkingLikely degree of engagement across the Change Journey within a typical organisation.Typical Professional Group Strategy / Policy Delivery Embeddingof ChangeProject/Programme ManagementFinance ProfessionSponsors of ChangeEconomistsStrategistsBusiness Change ManagersExternal Relations/CommunicationsHuman ResourcesOperational ManagementProcurementContract ManagementOrganisation Executive BoardInternal Audit
    26. 26. Understanding Behaviours, Governance andConvergenceWhat to look out for across your organisation?
    27. 27. Process Obsessed Benefits RealisationWe MUST follow the prescribed process/manual
    28. 28. People looking to find a problem for awaiting benefits solution....My favourite solution will solve any ill...........
    29. 29. Limiting the focus to only the Project orProgramme.......We don’t want to INVOLVE other areas of the business.. too political
    30. 30. Believing that lack of success is otherpeople’s issue for not understanding howimportant something is..........They won’t listen and they don’t want to understand
    31. 31. Groupthink on the approach to benefitsrealisation......We all agree so it must be the right approach.....???
    32. 32. Governance of Benefits Governance is one of the most important factors in the successful realisation ofbenefits. Not just at Portfolio level which is critical to success!! Governance needs to be a ‘partnership approach’ between the project/programme and wider business organisation (operational/business as usual) The wider business organisation should always own the benefits. Align directorlevel and operational ownership. Two level ownership.....portfolio level andoperations The project/ programme should facilitate the benefits on behalf of the businessorganisation – not own the benefits……….Governance is closely linked to leadership and organisation culture – arguably themost important aspect of successful benefits realisation. GET IT WRONG AT YOURPERIL as governance can be difficult to change once implementedKey Point
    33. 33. Challenges in Implementing a Robust Governance Model• Getting senior executives to take responsibility forindividual or collective benefits, especially if thereis a history of project/programme failure within theorganisation• Jargon/technical language trap• Ensuring that there is a clear understanding ofroles and responsibilities for benefits realisation.Communication, Communication, Communication• Maintaining momentum – if the governance modelbecomes ineffective, senior managers will veryquickly lose confidence in it.
    34. 34. An example Governance Model for a Single OrganisationAn actual model used within a UK public sector organisation
    35. 35. An Example Governance Model for Multiple OrganisationsDuring ImplementationAn actual model used within a UK public sector organisation
    36. 36. An Example Governance Model for Multiple OrganisationsPost-implementationAn actual model used within a UK public sector organisation
    37. 37. Pushing the Boundaries of ChangeBenefits Realisation across Local GovernmentThought Leadership: Six Action Points:1.Incentivise organisation wide convergence inbenefits realisation1.Move beyond an over reliance on isolatedprocess, low-value templates and certificationdriven technical knowledge2.Establish appropriate benefits leadership at theportfolio level3.Greater external partnership working to deliverchange and benefits4.Greater integration of the cost reductionagenda and benefits realisation5.Invest in professionalism; innovation andcollaboration
    38. 38. Summary and Close
    39. 39. Conclusions – where to go from here Recap– Benefits Mapping in context– Benefits Lifecycle– Ownership and Governance– Conclusions from exercises What would people like to see next?
    40. 40. Some Examples of Approaches
    41. 41. Org 5CustomerGroup 1CustomerGroup 2CustomerGroup 3Org 6ABCDEFGExample Stakeholder and Benefits Impact MatrixHigh LowHThe above table illustrates the impact of each benefit on the each stakeholder group. Benefits are in order of sequence onlyOrg 4Org 3Org 2Org 1Greater assurance in the quality andintegrity of returnsMain Organisation Other StakeholdersReduced staff costs on administration ofcustomers hard copy financial accountsIncreased assurance in the accuracy ofreturns and statements being filedIncreased customer satisfaction with thefiling of financial accountsIncreased assurance in debt managementin Collector GeneralsIncreased satisfaction with the quality andaccess to information on financialaccountsIncreased confidence in the targeting ofinterventions based on risk profileIncreased confidence in the targeting ofinterventions based on risk profileOperational BenefitSource: Glynne
    42. 42. Sample Operational Benefit DashboardRef: BenefitA Description Impact SummaryMeasurementQuestionMethod and Unit ofMeasurementBaselineValueTarget Value Actual ValuesMeasurement tobe done byPriorityLikelihood ofFailureDependency on otherBenefitsBenefitCategoryActions Required to Realise the Benefit OwnershipStartDateEndDateRisks Impacting Realisation of the Benefit Impact Probability MitigationDirector OwnerOperational OwnerCurrent RAG StatusExposure Rating 16AN OtherAN OtherQuestion to be asked to measure the benefitHow will the benefits be measured and what is the unit ofmeasurement. Alignment with organisational performancemanagement including relevant KPIsMeasurementDates? ?BaselineActual(s)Time ?Cost?Satisfaction ?Income ?Profitability ?4 4OwnerEnd date to be realised TBCSource: Glynne
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