Dark art of benefits managemenet iiba - brisbane - 24 august 2018

ian@portfoliophilosophy.com | www.portfoliophilosophy.com | +61 405 574520
THE DARK ART OF BENEFITS
MANAGEMENT
IIBA Brisbane Chapter Event
Ian Gomez | Portfolio Philosophy | 24 August 2018

WHATWEWILL COVER
• Introduction
• Definition
• Framework overview and principles
• Identification
• Development
• Evaluation

INTRODUCTION
WHY IS BENEFITS MANAGEMENTA DARK ART?
THEORY
REALITY

WHAT IS A BENEFIT?
“An advantage or profit gained from something”
Oxford Dictionary
“The measurable improvement resulting from an outcome perceived as an advantage by one
or more stakeholders”
Axelos MSP and MoP
“The positive and measurable impact of change on the performance of the organisation,
contributing to one or more strategic objectives”
APM Benefits Special Interest Group

A STANDARD FRAMEWORK
THE PILLARS (Principles)
• Value Culture underpins the whole thing
• Strategy alignment, performance management integration
and maintaining a portfolio perspective are about making
sure we are focused on the right things
• Starting with the end in mind, successful delivery and
effective governance ensure we are doing things right
THE ROOFTOP (Practices)
• Not as cyclic / sequential as it is represented
• A single benefit lifecycle than benefits management APM Group

BENEFIT DEVELOPMENTCYCLE
Quantify
Plan
Identify
Appraise
(Investment Gating Approval)
Value
(Portfolio/Prioritisation)

IDENTIFICATION
• Start with the end in mind (if possible)
• If a feature of the change output does not
map through to a strategic objective you
need to question why change effort is being
expended on it
• Change management plan should be
informed by considering what needs to be
done to move from an output to a
capability
• A project/program may have more than one
output and there may be external
dependencies (you should include these)
CHANGE OUTPUTS CAPABILITIES BENEFITS STRATEGIC OBJECTIVES
ENABLE DRIVE CONTRIBUTE
Improve Customer
Satisfaction by 10%
within 5 years
Reduce operating
costs from $100M to
$90M per year within
5 years
Attain at least an 80%
employee
engagement score
within 5 years
New Training System
Access to online training
programs
Share information about
training programs and
providers
Improved staff capability
Reduced training costs
Improved training
options
Aggregate agreements
with training providers
Reduced training
administration costs
We are delivering... ...so the business can... ...which leads to...
...helping us achieve our
target to...

ACTIVITY: BENEFITS MAPPING
Scenario:
Lost City of Atlantis City Council is responsible for providing a range of services to its citizens
(garbage collection, major events organisation, street cleaning, town planning, sewerage,
street lighting, etc.).
You are the Business Analysis team working in the Project Delivery department and have just
been handed a new project to work on. This will require a benefits map to support the
business case.

QUANTIFICATION
• Quantification is usually high-level for a Gate 1 / Strategic Business Case
• Involves identifying the corporate measures to be impacted
• Reasonable enough for the appropriate business owner to endorse
• Good enough to allow the initial valuation and prioritisation
• Further quantification is generally required to refine the Benefits Plan / Benefit Profiles
after the project has passed the initial valuation

VALUATION AND APPRAISAL
• Independent of the Project Team / Sponsor
• Initial valuation informs prioritisation of the portfolio
• Should seek to balance investments to optimise the achievement
of strategic objectives
• Appraisal typically part of Business Case review
• May be iterative depending on gating
X All benefits need to be quantified: It’s OK to be qualitative, but will have less standing.
X Benefits need to be in $ terms: Beware of putting a $ value on non-financial benefits!
X Every Business Case needs a positive NPV: It’s the overall contribution that counts.
X Once it’s on the portfolio it’s a goer: Only if the final Business Case stacks up.
Quantify
Plan
Identify
Appraise
(Investment Gating Approval)
Value
(Portfolio/Prioritisation)

BENEFIT ELIGIBILITY
• Required for objective and consistent
valuation, appraisal and prioritisation
• Independent of any particular project
• Part of over-arching Investment Framework
(inc. governance, scoring, exceptions, etc.)
• Variety of options are possible – Should be
tailored to your organisational context
• Benefits do not need to
be cashable.
• Benefits justify
investment required to
keep operating.
• Benefits may be
cashable or not.
• Required to deliver
corporate strategy and
specified on strategy
roadmap.
• Benefits should be
cashable.
• Positive NPV required.
• Benefits need to be
quantified for resultant
investment to an order
of magnitude level.
Explore Improve
Sustain /
Comply
Transform
•Benefits must be cashable (or readily converted to cashable)
•Budget impacted must be specified and agreed with ownerEconomic
•Benefits are not quantifiable in $ terms
•Must be attributed to a specified KPI and agreed with the ownerEffectiveness
•Benefits not cashable against a budget, but are quantifiable in $ terms
•Overall savings must be agreed by Finance ManagerEfficiency

BENEFITS PLANNING
• Benefits Profiles should be
created at identification and
completed/reviewed/revised
through the lifecycle
• Lots of templates available –
some are very complex!
• Detailed and prescriptive
enough to enable success to
be assessed
• Agreement by an operational
benefits owner is vital – Their
performance targets will be
changed!
• Consolidated in Benefits Plan
(along with support material -
overarching governance, etc.)
Short Description: Improved training options
Financial Impact: $ /year or
Economic Effectiveness Efficiency
KPI: Number of available training courses for employees
Baseline: 25 current listed training courses
Target: 40 listed training courses
Phasing: Increase by 5 per year after project completion
Actions Required: Training System needs to provide an
information database and online delivery option. Staff
development team needs to be fully trained in new system.
Dependencies: Dependent on accreditation of new courses
as part of BAU. The proposed staff development
strategy will be dependent on achieving benefit.
Engaged
Staff
Satisfied
Customers
Efficient
Operation
Benefit Disbenefit
Quantified Qualitative
Reporting: Every six months for 5 years
Reporting Owner: Training Co-ordinator
Budget/KPI Area & Owner: Training & Dev | HR Manager
Non-cashable

ACTIVITY: BENEFIT PROFILING
Background Information
• Customer Services team engagement score = 62% (measured annually through satisfaction survey)
• Call Centre customer satisfaction = 42% (collected by end-call surveys, reported quarterly)
• Customer Services budget = $15M/year (reported monthly)
• Contact Centre Enquiries: Volume = 200 enquiries / day telephone | 25 enquiries / day email | no web form
• Average customer on hold wait time: 5 minutes
• Average enquiry call handling time: 8 minutes telephone | 4 minutes email
…Make up others as necessary!

BENEFIT EVALUATION
REALISE
• Pre-transition: Analysis, preparation and planning
• Transition: Delivering and supporting the change
• Post-transition: Reviewing progress, measuring performance and adapting to
the change
REVIEW
• Assess and update benefits profiles for achievability and alignment
• Tracking performance over time and communicating with stakeholders
• Should occur through the investment life and form a feedback loop with
planning and realisation
• May be time- or event-driven – at a minimum at the end of a tranche
• Assess effectiveness of Benefits Management to drive future improvements

Identify | Quantify | Plan
Value | Appraise
Develop
Project
PUTTING ITTOGETHER
BENEFITS LIFECYCLETHEORY
Baseline
Projection
Claimed
Benefit
Actual
Performance
Pre-Transition
(Planning the Change)
Transition
(Making the
Change)
Post-transition
(Correcting)
Realise
Review
(Assess, monitor, communicate and improve)
KPIPerformance
Time

ACTIVITY: FACING REALITY
• Split into new groups
• Take turns to briefly introduce yourself, your project, logic map and profiles
• Discuss what the impacts are to tracking performance across all projects

REALITY
ASYNCHRONOUS, MULTIPLE, OVERLAPPING CHANGE
Project
Baseline
Projection
Benefit

ACTIVITY: GROUP DISCUSSION
Do the benefits claimed at investment matter if we can’t explicitly link performance to a
specific change?
Would it help to consider benefits at a program / portfolio level instead of at a project level?
What should we salvage from Benefits Management theory? Are the practices and principles
still of value?

WRAP-UP
Have we missed anything?
Any Questions?
Thanks for your time!

Dark art of benefits managemenet iiba - brisbane - 24 august 2018

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Dark art of benefits managemenet iiba - brisbane - 24 august 2018