Matt Williams' presentation will explore methods and techniques for linking the business case, project output delivery and realising business benefits and value from project investments.
A project business case would (should) ordinarily include a comprehensive, analytically derived cost/benefit analysis. The basis for approval of a business case is that the capital investment required to deliver the project will be outweighed by the financial and/or non-financial benefits that will be delivered.
There are three major factors that contribute to the expected business value from project investments not being achieved:
1. Value exaggeration - an overly optimistic cost/benefit analysis,
2. Value destruction - delays in project and programme delivery, and
3. Value decay - not transferring the value to the business.
This workshop will explore methods and techniques for linking the business case with project output delivery to realise business benefits and value from project investments.
Value destruction: why most projects fail to realise the benefits used to make the business case for change (and how to address it)
Value destruction: why most projects fail to realize the benefits used to make the business case for change (and how to address it)
Provider of enterprise systems designed to improve
project success rates and maximize business value
Connexion Systems practice areas:
•Benefits Realisation Management
•Project Portfolio Management
•Project Investment Management
•Best Practices (PRINCE2, MSP, P3O)
•Project Controls (Schedule, Earned Value)
Enterprise Systems = People + Process + Tools
ABOUT CONNEXION SYSTEMS
“A measurable improvement resulting from an outcome perceived as an advantage by one or more stakeholders”.
-UK Government Cabinet Office
“A business outcome that delivers value to the organisation.”
-NSW Department of Finance & Services
“The identification, definition, tracking, realisation and optimisation of benefits at initiative and portfolio level.”
-Steve Jenner, Managing Benefits (APMG)
“The benefits realisation approach is used to determine whether a program has produced the value claimed in the business case. It is an approach that enables key stakeholdersto clearly measure the effectiveness of the program by focussing on business metrics, rather than just program/project metrics.”
BENEFITS MANAGEMENT DEFINED
Benefits Realisation is not a new concept
So why is there so much interest right now?
Uncertain economic times
Mean we need to get projects right the first time
Valuing Non-financial benefits (egtime saved per transaction)
Cost of Money
Difficult to measure whether outcomes have been achieved
•Focus on schedule and cost not value
•Not linking delivery to value creation
•Measuring and tracking assumptions
•Not confirming hypothesis made
•Decision makers need to know ALL impacts of decisions
•Not transferring the value to the business
•Once program is complete, stop measuring
•Double-double counting (future programs steal value)
•Corrective actions may be required
WHAT IS THE PROBLEM?
Traditional approach is:
Define the business case,
Get approval and funding,
Hand over to the project delivery team
Receive the finished product
SO WHO IS RESPONSIBLEFOR DELIVERING VALUE?
a) the project/programme is made responsible for benefit realisation, or
b) No-one is!
Project and Programme managers are focussed on delivery, not business benefits
Time/Cost/Quality are their measures of success
SO HOW DO WE MAXIMISE VALUE?
PEOPLE -Create an appropriate organisational structure
PROCESS -Develop and apply a consistent approach across all projects/programmes in the organisation
TOOLS -Implement supporting tools appropriate for the size and maturity of the organisation
There are many different process descriptions available
All have one thing in common:
It’s a feedback loop;
not a ‘one-off’ step (after project delivery)
CONNEXION PROCESS IN CONTEXT
•Engage with all stakeholders
•Create realistic, measurable business case
•Plan ALL work, not just project work
•Transfer responsibility (VMO?)
•Have mechanism to take corrective actions when required
•Continue measuring until stabilised
•Start measuring as soon as possible
•Report benefit progress and forecasts in status reports
•Change requests must include the benefit impact
Matt WilliamsPMP, MAIPMManaging Director
ConnexionSystems Pty Ltd
M:+61 414 847 040