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How portfolio management can deliver strategy


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Petula Alison presentation, swwe branch event on 25 September 2019, Bristol

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How portfolio management can deliver strategy

  1. 1. 'How Portfolio Management can deliver the corporate strategy and goals‘ Petula Allison
  2. 2. Page 2 A bit about me me Dualpassport Yorkshire WALKING running Diverseroles financial services CivilService £1.9 billion Australia ProgrammeManager PMO MANAGER Relationship Manager Business Engagement APMG PRINCE Benefits cats DOGS holidays BakeOff Formula1 HACKATHON Open University change
  3. 3. Page 3 YBS - Our Background • Currently 3rd in the Top 10 Building Societies • Head Office locations in Bradford, Leeds, Peterborough and Cheltenham • Product offerings include Mortgages, BTL, Savings, Shareplans and more recently YBS Commercial Mortgages • Key Communication channels – Post, Phone and Digital with a big drive to move towards Digital in 2020 and reduce paper • 249 YBS outlets for face to face help across the UK • Awards won in 2019 include the following: Best Commercial Mortgage Provider Accord Mortgages - Best Mortgage Lender Most Efficient Complaint Handling - Gold Winner Best Overall Mortgage Provider 2019 (moneynet) Best Building Society Savings Provider 2019 (moneynet) Best Offset Mortgage Provider – 5 years running (moneynet)
  4. 4. Page 4 Our Purpose
  5. 5. Page 5 The Portfolio then and now ❖ Pre 2012 the average size of the Portfolio c.£12- 15m ❖ During Merger and Acquisition activity the Portfolio size rose to c.£25m ❖ 2013+ Transformation agenda and new Portfolio of c.£300m over 5 years ▪ At its peak during the transformation activity the annual portfolio was c.£95m Then Now ❖ Portfolio investment size reducing – do more with less ❖ Bi-modal Portfolio delivery including Agile and Waterfall projects ❖ Digitising our business ❖ Federated change model
  6. 6. Page 6 Portfolio planning and management is easy…… Isn’t it……..? Strategy and Outcomes Affordability, P&L and ROI and NPV Estimating Timescales Stakeholders Do-ability Benefits!!!!!! Risk Appetite Dependencies
  7. 7. Page 7 Our Vision YBS Vision: To be the most trusted provider of financial services in the UK CMO Vision: Change Management Office (CMO) provide services to support delivery of responsive, effective and predictable change. StrategicObjectives To be valued for our challenge, insight and relevant opinions To focus on what really matters, when it matters To deliver clear messages to drive right outcomes for members, customers and colleagues To attract, develop and be a provider of talent 5toThrive Help Protect Digitalise Expand Charter To be independent and objective Customer at the heart Trustworthy Personal PassionateValues Unleash
  8. 8. Changing the way we do Change…. ➢ New Simplified Change Lifecycle introduced ➢New Identify Change – Steering Group, a new Change Portal – and a single way of submitting ALL Change ➢New Shape Steering Group – to assess ‘new changes’ and manage and control their acceptance into the Portfolio
  9. 9. Planning our Portfolio Challenges and Issues Faced Financial Plan was Challenging Not bought into ‘it’ the plan or process for the Portfolio Not all stakeholders engaged No clear understanding of organisational priorities Own v Group priorities Unpopularity Business progress with own changes Nominated Finance contacts and data owners Captured ‘below the line’ change with Champions from across the business Groups imperative and ability for Portfolio to act as ‘enabler’ was grasped Stakeholder analysis conducted – engagement weekly and across the business Chief to Champions Listened to concerns and ‘bought-in’ to the process by engaging and allowing stakeholders to influence their own inputs and contributions on e.g. do-ability, benefits Impact of progressing ‘own’ priorities to the Groups Strategic Imperatives is now raised. With awareness of capacity across the business has improved. There is now one way to raise and manage ALL change across the Group Briefing developed to share Group Priorities and the agreed Portfolio ..and now we have
  10. 10. Page 10 YBS Transformation Portfolio ✓ Portfolio Role when helping define and manage the Portfolio is to ensure we do ‘the right things, at the right time and in the right way within your organisations parameters and constraints!’ ✓ It sounds easy – in practice we know it isn’t! ✓ Shaped and balance the Portfolio ✓ Our Portfolio was aligned to strategy and prioritised into investment buckets; Regulatory, Infrastructure, Productivity and Growth ✓ Each bucket had its own criteria and relative priority in the Portfolio Priority 1 Regulatory ‘to ensure we remain compliant’ Priority 2 Infrastructure ‘to make sure we keep the lights on!’ Priority 3 Productivity ‘ensure we are being efficient and keep things as easy and simple as possible’ Priority 4 Growth ‘the things that will grow the business’
  11. 11. 11 PORTFOLIO DYNAMICS An Example: Estimating Portfolio Overspend against Plan If initiatives begin to show signs of potential overspend against Plan, or are larger than T Shirt size, or additional overflow of initiatives from one year to the next occurs, the ‘ripple effect’ is that a totally unrelated initiative may face de-prioritisation or a reduced budget in order to balance the Portfolio’s annual spend. ❖ Early identification of the potential for an initiative to overspend against Plan due to scope changes or delivery difficulties ❖ Understand in advance the opportunities to offset that through savings elsewhere in the portfolio in ‘diallable’ initiatives ❖ Understand the relative priority of initiatives – what’s the least worst impact? ❖ Give advance notice to the initiative(s) selected to absorb the impact in order to proactively manage decision making RISK: MITIGATION THROUGH UNDERSTANDING ‘RIPPLE EFFECTS’
  12. 12. PORTFOLIO: INTERNAL AND EXTERNAL INFLUENCERS Business Outcomes Strategic Portfolio 2015/16 Portfolio Refocused on Customer Experience Transformation Decision Group Current Account 2014/2015 Portfolio Refocused on Enabling Projects to unlock Strategic Initiatives 2013/2014 Portfolio Refocuses on MMR and Conduct Agenda Decision N&P Current Account 2016/17 Portfolio Refocused on Cost Base Reduction Strategic Portfolio created 2013-2017 A blend and sequence of cost reduction and growth 2012 (Year 0) 2013 (Year 1) 2014 (Year 2) 2015 (Year 3) 2016 (Year 4) 2017 (Year 5) 2018+ (Year 6) Strategic Portfolio agreed by Board Internal Influencers External Influencers Delivery must be more concentrated, and faster with deliberately managed course correction Strategic capability requires establishment of a winning target end-state; and then maintenance of the end-state, year to year The Change Portfolio can sometimes have initiatives with conflicting priorities. 2016 – Boston Consulting Group (BCG) Review 2015/2016 Net Promoter Scores 2014/2015 Mortgage Transformation Success 2013/2014 Mortgage Market Review Programme (MMR) Large Technology Projects – challenging and complex Proven track record of Process Improvements 2013/2014 Conduct Risk Programme Experience of Working with 3rd Parties Mergers and Acquisitions a focus for the Portfolio 2008-2012 2014/2015 AT Kearney Report 2014/2015/2016 Single Multi Branded Platform 2013 Section 166 FSA to FCA Increased Regulatory Oversight Mobile Banking Banks – New Entrants Continued Levels of Regulatory Change Customers Trust FS emerging from Financial Crisis Learning External Influencer YBS – Internal Influencer Decisions Bank of England Base Rate Changes BREXIT Decision 1
  13. 13. Now End 2012 2013 2014 2015 2016 2017 Regulatory (Core) Infrastructure (Core and SI)) Productivity (Efficiency SI) 2013/2014 – Infrastructure and Single Multi Branded Platform (SMBP) was the priority to create the capability to unlock benefits in other Strategic Initiatives 2013 – Regulatory work had an increased focus mid 2013 and for the next 2 years with the emergence of Conduct Agenda and the Mortgage Market Review 2015 - Growth and our Customers become the strategic driver as we build trust. Customer Experience Transformation is prioritised for the Portfolio end 2015 and for 2016 2018 + 2016 - Crystallised focus on efficiencies from productivity projects as the priority to help reduce the Group’s costs. However, the level of regulatory investment remains high 2017 Planning Round – includes continued efficiency initiatives coupled with an increasing focus back on our Growth agenda for 2018 Growth (Customer SI) Now 2 1 1 3 1 33 3 2 22 1 2 2 11 3 2 13 ProjectedBoard Agreed- Strategic Portfolio SOMETIMES - PRIORITIES CHANGE
  14. 14. Benefits and Outcomes Achieved 1
  15. 15. Benefits and Outcomes Achieved 1 IT Software and Infrastructure Upgrades Customer Communications TransformationNew Telephony System
  16. 16. Benefits and Outcomes Achieved YBS Branches to Agencies …and over 100 small changes Branch Quiet Hour
  17. 17. Benefits and Outcomes Achieved 1 Mortgage Platform Digital Savings App
  18. 18. Page 18 Portfolio planning and management is easy…… Isn’t it……..? Strategy and Outcomes Affordability, P&L and ROI and NPV Estimating Timescales Stakeholders Do-ability Benefits!!!!!! Risk Appetite Dependencies
  19. 19. Why did it work? 1
  20. 20. Key Points ▪ We all know that things change, priorities, estimates, benefits, funding ▪ Adapt the Portfolio ▪ Keep checking - not just individual business case and their right to have a place in the Portfolio, but the Portfolio overall ▪ Challenge assumptions and thinking Our Challenges and the Lessons we Learned 2
  21. 21. Page 21 Questions
  22. 22. 1. Planning Round Strategic Direction •5 Scenarios worked through and presented to the June Board •Planning round strategic direction with focus on manex reduction obtained from June Board. •Decision made by Board not to continue with Group’s Current Account 2. New Estimating Approach •Identified the need for new estimating approach for large programmes of work •New estimating approach for programmes established that will use cost & benefit ranges •Programmes identified and estimating sessions undertaken 3. Engagement and Champions •New stakeholder engagement approach developed to assess awareness and impact of portfolio initiatives on different areas of YBS to ensure all opportunities and risks were surfaced •Functional Business Champions working together to complete the heat-map to assess understanding and impact on their functions •Business Change outside the change portfolio initiatives getting reviewed to identify any dependencies within the portfolio 4. Benefits •New requirement to sign off benefits at the Benefit Realisation Forum (BRF) established enabling for greater scrutiny •Working closely together with Benefits Manager and Finance to understand and assess different types of benefits and our confidence in delivering them •Exceptional BRFs held to challenge and review project benefits to prevent double count 5. Priorities •Scenario X fleshed out and it is clear real demand far outstrips do-ability and prioritisation is crucial •Mandatory and Discretionary clearly separated •Different prioritisation lenses (5 Year Gross Benefits, 5 Year Net Manex Benefits, Risk (by types) & % Actual Spend of Total ELV) for discretionary projects identified and reviewed 6. Strategic Direction •Strategic direction of future demand obtained from EMC •Priority between Growth and Cost clarified by EMC •Establishment of the Planning Steering Group and Planning Working Group (re- purposing existing forums) 7. Do-ability •Challenges around assessing do-ability due to lack of clarity and definition of scope in new emerging programmes •The confidential nature has required restricted and controlled assessment of these programmes in the portfolio hampering the speed of clarifying the costs, benefits, do-ability and risk 8. Proposal for the Portfolio •Working with SMEs across the Business and Change Delivery •Assess and understand viable proposal for the portfolio, aligned to the strategic priorities •High level understanding of business case, do- ability and level of organisational change within the constrains of affordability •Further assessments on all do-ability now being progressed METHODOLOGY FOR PORTFOLIO CONSTRUCTION We presented a proposal for the Portfolio Plan, which helped address the Groups priorities of reducing operating costs. The activities and steps we have followed to iterate to an affordable and do-able proposal for the Portfolio are summarised below. Over the past year we have supported the business delivering many of the changes and business outcomes to help drive the business forward. Our experiences of working with and delivering the differing and sometimes complex nature of the Programmes and Projects has provided valuable learnings and insight into our approaches going forward. 22