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Capabilities based planning (v2)

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Capabilities based planning is the Critical Success Factor for defining what "done" looks like in any project or program

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Capabilities based planning (v2)

  1. 1. Capability Based Planning for Enterprise Services Prepared by Capability based planning fits Niwot Ridge, LLC naturally with Strategy Based May 2005 Planning and Business Process Improvement 1/35
  2. 2. Risk management is the delivery of a positive outcome in the presence of uncertainty Political disorders can be quickly healed if they are seen well in advance; when, for lack of a diagnosis, they are allowed to grow in such a way that everyone can recognize them, remedies are too late. Niccolo Machiavelli, Il Principe, 1513 2/35
  3. 3. “End to end” delivery of Enterprise Services rests on the keystone of Project Portfolio Management, balanced by a Scorecard and a Capabilities Plan Project Portfolio Management “Demand” “Done”  Business Mission and Vision  Capabilities Based Planning drives capabilities need defines business outcomes  Balanced Scorecard defines  Event based tasks are the the testable strategies for basis of increasing delivering business value capabilities maturity 3/35
  4. 4. The supporting elements must be in place to enable Capabilities Based Planning to succeed. This presentation focuses Capabilities Based Planning Project Portfolio Management “Demand” “Done”  Project Portfolio Management  Capabilities Based Planning defines the “trade space” for defines business outcomes decisions that impact value resulting from these decisions  Event based tasks are the delivery mechanisms for increasing maturity of the capabilities 4/35
  5. 5. Capabilities Base Planning transforms enterprise services from the delivery of features and functions to the delivery processes that support strategy  Capabilities Based Planning is planning, under uncertainty, to provide capabilities suitable for a wide range of business challenges and circumstances, while working within an economic framework  Capabilities Based Planning emphasizes flexibility, adaptiveness and robust capabilities, implying a modular building-block approach to Enterprise Services  When transformation takes place it is because new modules have come into use 5/35
  6. 6. Capabilities Based Planning is understood at the execution level, but needs to be raised to the level of enterprise process analysis 1. Identify a needed capability in operational requirements terms; 2. using the set of capability options to; 3. assess the effectiveness in a operations paradigm, and; 4. make choices about requirements and ways to achieve the capability using an integrated portfolio framework; 5. to produce of output set of options based on these operational paradigms. 6/35
  7. 7. For a requirement (1) consider the options (2), apply mission system analysis (3) to circumstances (4) to generate assessment of options (5) 2 Optional Capabilities 1 3 5 Business Analysis of Assessment Mission and Capabilities of Options Vision 4 Scenarios 7/35
  8. 8. Many enterprise projects focus on the delivery of improved features and functions; ignoring the delivery of the capabilities needed to implement strategy Standish Chaos Report Failure Modes Capabilities Based Planning Absence of a clear vision and statement Maturity assessment program events of the requirements expectations provide visibility of progress independent of effort or time Estimating difficulties and organizational Capability assessment points define politics result in unrealistic expectations “done” using agreed on measures of progress Poor project decomposition Master Plan and Master Schedule vertically and horizontally integrated Inadequate staffing Resource loaded schedules Lack of stakeholder involvement Capabilities defined by business needs Lack of strategic focus Capabilities connected to Balanced Scorecard 8/35
  9. 9. Putting Capabilities Based Planning to work requires a change in our approach to planning – a business process improvement maturity focus  Emphasis on operations rather than features and functions  Operational capabilities are the building blocks of change  Emphasis on evaluating capabilities under conditions of uncertainty  Deploying robust building blocks  Analysis illuminates the feasibility of alternatives 9/35
  10. 10. Capabilities Based Planning starts with business scenarios, the tasks needed to implement the scenarios, and testable capability outcomes Scenarios Work Tasks Capabilities The business units The individual work The planned capability of operational needs in processes needed to fulfill the Business Units at each scenario terms the scenarios level of maturity Merge a General Ledger 1. Define the data to be “Acquire a $100M business from a 3rd party database acquired from the new unit in 90 days or less” through a data firm conversation process 2. Verify data “Process 100% AP invoices conversation can take from tier 1 vendors saving place $9M annually” 3. Verify that business operations can continue Business Process Project Management Strategy Management Improvement 10/35
  11. 11. Balanced Scorecard is augmented through a capabilities based planning process by mapping strategies to assessment maturity events  Balanced Scorecard is a framework with intrinsic stakeholder focus – placing emphasis on internal alignment and elimination of projects with little or no strategic value  Balanced Scorecard does not adequately reflect a project management focus, instead on objectives and their process indicators 11/35
  12. 12. Defining the desired maturity of a business processes is the starting point for integrating Balanced Scorecard with the Enterprise Services deployment processes  The Integrated Master Plan (IMP) for Enterprise Services starts with the identification of increasing maturity of capabilities  The successful delivery of supporting features and functions can be measured by the completion of the Significant Accomplishments and their Criteria 12/35
  13. 13. The focus of Capabilities Based Planning is on assessing the increasing maturity of functionality defined by the Balanced Scorecard strategy  Planning under uncertainty, provides capabilities suitable for a wide range of challenges and circumstances while working within an economic framework that necessitates choice  Focus on “possibilities” rather than features  “What features do we need to achieve the desired capabilities?”  “How much of each capability to we need at this point in time?”  “How robust, flexible, and capable should we be at a point time to provide the needed capability?” 13/35
  14. 14. Capabilities Based Planning takes a near term and long term view of the emerging functional maturity needed to implement the Enterprise Services strategy  Near term effective use of processes, tools, features and functions  Future use of sound infrastructure and system capabilities  Joint solutions to problem by identifying vertical connections between business processes  Risk tradeoff assessment of vertical solutions within and across business processes  Build capability to respond to a wide variety of possible demands 14/35
  15. 15. The difference between capability and function is the difference between the delivery of a solution and the creation of the foundation for change  Focus on outcomes is important  Focus on the underlying tasks that produce outcomes is all important  Defining the needed maturity and assessing its presence provides feedback to the business strategy in ways KPI’s can’t 15/35
  16. 16. Six trusted friends of a project based organization are the basis of capabilities based planning and balanced scorecard Why are we doing this? Balanced Scorecard What is it we’re doing? Program Events How is this going to be accomplished? Significant Accomplishments When will we know it is done? Accomplishment Criteria When will we be done? Tasks Who going to do the work at what cost? Resources Where will the work take place? Teams 16/35
  17. 17. Start the hierarchy of Enterprise Services processes with strategy and end with plans; traceable to this strategy through portfolios of projects Strategies define the desired outcome Capabilities enable the strategy Portfolios manage capabilities Plans manage the delivery effort 17/35
  18. 18. The measure of Enterprise Services Business Effect’s is made visible at each maturity assessment point. “Is this want done looks like?” must be the question Business Business Capability 1 Capability 2 Effect Effect Sub- Sub- Sub- Capability Capability Capability Capability Capability Capability Sub-Sub- Sub-Sub- Sub-Sub- Capability Capability Capability Sub- Capability Sub- Sub-Sub- Sub-Sub- Capability Sub-Sub- Capability Capability Sub- Capability Sub- Capability Sub- Capability Capability  Functional decomposition of capabilities  Derive business effects from capabilities  Capabilities must be Collectively Exhaustive  Link capabilities to effects and Mutually Exclusive  Explicitly identify cross links and  Provide a “menu” from which operations can interdependencies between capabilities choose required capabilities  Highlight “enabler” capabilities 18/35
  19. 19. Evidence that the strategy is being fulfilled is tested in the “units of measure” of the capabilities of a project whose maturity is assessed at periodic events Program Maturity What are the maturity assessment points Assessment along the way to completion? Events Significant What accomplishments must take place in Accomplishments order for this maturity to have occurred? Accomplishment What is the evidence that the Criteria accomplishments occurred? Tasks What effort must take place for the accomplishments to have be completed? 19/35
  20. 20. Capabilities Based Planning separates effort from results, measuring an assessment event’s effect on the organization, rather than the passage of time  The passage of time does not mean progress; delivery of capabilities does  Measuring increasing maturity of capability makes visible the systems value in terms the business units can directly assess 20/35
  21. 21. The process drivers for Capabilities Based Planning starts with functionality and ends with deliverable effects on the business process  Functional or feature planning does not deliver the real value to the business units  Features are not connected to strategy  Balanced Scorecard connections are capabilities not features  Testing strategy involves a capabilities impact not the presence of a feature  Features are not connected to business value  Business strategy is tested through scenarios and capabilities  Delivered value results from the use of a capability in a scenario 21/35
  22. 22. Capabilities Based Planning augments features with business value, traceable to strategy through a portfolio of projects and their Program Events  Plan the delivery of capabilities rather than the delivery of features and functions  Features and functions are the raw materials of Capabilities  Capabilities enable the delivery of the strategy 22/35
  23. 23. Program Events are evaluation points in the project for assessing the maturity of the capability and its effect on the business  Program Events are Celebratory Opportunities along the path to maturity  Significant accomplishments enable a new capability that supports a strategy  The maturity of the derived effects are assured through the assessment of the Significant Accomplishment 23/35
  24. 24. Significant Accomplishments describe the delivery of capability needed to fulfill a business strategy using work processes of the system  A Capability is the deployment or delivery of a feature or function in support of a business process, product or service initiative  Significant Accomplishments deliver this capability  Stating the needed maturity connects the capability with strategy 24/35
  25. 25. Accomplishment Criteria are the “exit criteria” for the Significant Accomplishments, assuring the intent of the Accomplishment is met  Exit criteria are the evidence that the significant accomplishment has been achieved  The gathering and assessment of the Balance Scorecard KPI in support of a Significant Accomplishment 25/35
  26. 26. Tasks are the raw material to implement the functionality needed for the business process to deliver on the capabilities  The effort expended to deliver the Accomplishment Criteria in support of the Significant Accomplishment  Short duration activities (20 to 40 working days) with clearly defined deliverables  0% or 100% credit for the deliverables  No partial completion of tasks  Predefined technical outcomes 26/35
  27. 27. Management consists of Capabilities Assessments (Events), the Significant Accomplishments (SA) and the Accomplishment Criteria (AC) Defines Events State of the Business Strategy Project Team Status Customer/Program Direction Demonstrates Accomplishments State of the Something WBS Element or Maturity Subsystem Capability Completed Significant Accomplishments (SA) Program/Team Team Status Direction State of the Subsystem Identifies Criteria Process End Item Accomplishment Criteria (AC) Performance Team Direction Deliverables Effort Expended IMP Process Step How Tasks 27/35
  28. 28. A set of concise capability specific phrases provide a “stand alone” description of “done” independent of the existence of individual features Maturity Action Capability State Adjective Verb Noun Verb Demonstrates Closure Perform Maturity Step in the Process End Item State Work Preliminary Close General Ledger Successful “A01B02a: Preliminary Month End Close of the General Ledger Successful” 28/35
  29. 29. Starting with a “mini-Kaizen,” the maturity Assessment Points (Events) are gathered along with the Significant Accomplishments and Accomplishment Criteria 29/35
  30. 30. A mini-Kaizen transfers “Sticky’s” to a Mind Map, then to a Master Schedule then, to a Hanging PERT – producing a “Wall of Truth” for Enterprise Services Working session Sticky’s A Mind Map™ of the Sticky’s PERT Chart Expert™ on the Wall of Truth MS Project™ export of the Mind Map 30/35
  31. 31. The three levels of the Integrated Master Plan define the granularity of the deliverables, report progress to plan and project the future cost and effort of tasks Monthly statusing: – Validate schedule status WBS (start/complete/slip) IMP – Validate work package Levels % complete 1, 2, 3 – Claims earned value – Identify/process cost ETCs Funding Profile Weekly statusing: Near term RW period – Roll up of lower level WBS Planning Package Future RW periods schedule Levels status 4, 5 Schedule tasks – Roll up of lower level % complete (at Work Package or level) – Milestone start/complete – Milestone slip (early/late, 20 to 40 start/complete) WBS’s Workday tasks Schedule tasks – % complete of tasks Below (one/two levels Weekly statusing: Work – Milestone start/complete below WP level) – Milestone slip (early/late, Package Or even weekly tasks start/complete) – % complete of tasks 31/35
  32. 32. A simple example of vertical and horizontal linking of the capability — provisioning a new employee illustrates the assessment of maturity Capability: Provide Buying Authority within 10 working days of hire Human Resources Information Technology Finance Supply Chain Management New Employee Ready to Work Charge account setup Laptop Account Setup Buying authority available Insurance Orientation 32/35
  33. 33. Maturity assessments allow progress to be measured in how terms of “capability” effects the business; not just the consumption of time and resources  Define the desired maturity points along the path to completion  Measure the accomplishments  Assess the effect on business improvement  Engage all participants in a conversation about capability 33/35
  34. 34. The deployment of Capabilities Based Planning is the basis of managing the deployment of Enterprise Services  What does done look like in terms of operational capabilities?  How can we measure the increasing maturity of Enterprise Services in terms of “done,” rather than the passage of time?  How can the user community define their operational needs in terms of capabilities rather than features and functions? 34/35
  35. 35. References  Miller, Roger and Donald R. Lessard, The Strategic Management of Large-Scale Engineering Projects: Shaping Institutions, Risk, and Governance, MIT Press, 2001.  Guide to Capabilities Based Planning, The Technical Cooperation Program, Joint Systems and Analysis Group, Technical Panel 3.  Allen, Tom, Analysis to Support Capabilities-Based Planning, Capabilities-Based Planning Workshop, October 19-21, 2004.  Davis, Paul K., Analytical Architecture for Capabilities-Based Planning, Mission-System Analysis, and Transformation, RAND Corporation, MR1513  Davis, Paul K., “Exploratory Analysis Enabled by Multiresolution, Multiperspective Modeling,” Proceedings of the 2000 Winter Simulation Conference.  Machiavelli, Niccolo, The Prince and The Discourses, Introduction by Max Lerner, Modern Library,1950 35/35

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