“ Benefits-led” Portfolio Management: An Introduction <ul><li>January 2010 </li></ul>Daniel Fisher e: daniel.fisher@cambie...
“ Benefits-led” Portfolio Management <ul><li>Introduction </li></ul><ul><li>What is it? </li></ul><ul><ul><li>Features </l...
Introduction <ul><li>“ Traditional” portfolio management has existed for some time: </li></ul><ul><ul><li>Difficult to fin...
About Cambiel & Sigma <ul><li>Leaders in “benefits-led” approaches to managing change portfolios and programmes </li></ul>...
Portfolio Management - What Is It? <ul><li>A  portfolio  is more than just the sum total of programmes and projects. It pr...
Portfolio Management - What Is It? <ul><li>The OGC says that Portfolio Management is a  “co-ordinated collection of strate...
Portfolio Management - What Is It? <ul><li>Benefits-led Portfolio Management  is the rapidly-emerging alternative to Portf...
What Is It? - Features <ul><li>Relationship to Programme and Project Management </li></ul>Source: Adapted From New York Ci...
What Is It? - Features <ul><li>Permanent support function  provides “top-down” strategic analysis and executive assurance,...
What Is It? - Features <ul><li>An underpinning  portfolio model  enables complex decisions to be  visualised  – showing ca...
What Is It? – Decisions Enabled <ul><li>   Create “what-if” scenarios to aid yield and cost planning </li></ul><ul><li>Ho...
What Is It? – “Benefits-led” approaches vs. “traditional” portfolio management <ul><li>“ Traditional” Portfolio Management...
The Business Case <ul><li>“ Benefits-led” Portfolio Management: </li></ul><ul><ul><li>Reduces existing spend by stopping a...
The Business Case <ul><li>Fundamentally, this is just Good Management! </li></ul><ul><ul><li>Relevant skills normally exis...
Implementation Approach <ul><li>Treat as a “benefits-led programme”! </li></ul>
Key Implementation Considerations <ul><li>Cultural: </li></ul><ul><ul><li>“ Delivery” mindset of requirement to demonstrat...
Key Implementation Considerations <ul><li>Resource: </li></ul><ul><ul><li>Permanent central team: skilled at strategic ana...
Summary <ul><li>“ Traditional” portfolio management has existed for some time: </li></ul><ul><ul><li>Difficult to find cas...
How Can We Help? <ul><ul><li>Using a “maturity model” approach, we will help you to articulate the benefits of this approa...
What’s the first step? <ul><ul><li>We recommend an Initial Portfolio Review using our maturity model derived from P3M3 wit...
Selected Clients & Case History <ul><ul><li>Associated British Foods plc </li></ul></ul><ul><ul><li>Criminal Records Burea...
e: info@cambiel.co.uk  t: 01449 737867  www.cambiel.co.uk <ul><li>20-22 Bedford Row, London WC1R 4JS </li></ul>Questions a...
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"Benefits-led" Portfolio Management: An Introduction

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

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