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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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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: 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