APM Benefits Summit 2017 : Realising benefits in a changing world Value and benefits: Optimising benefits when affordability is an issue workshop by Steve Parker, GHD and APM Value Management 22 June 2017

1. Benefits Summit 2017
Realising Benefits in a Changing World
Value and benefits management:
optimising benefits when
affordability is an issue –
as it always is!

2. Agenda
▪ What links benefits management and
value management?
▪ What are the similarities?
▪ The business case and BCRs
▪ The case for value and benefits
management
▪ A working benefits and value appraisal
model – the Value for Money test
▪ Q&A

3. Benefits Realisation Management is one of the most
important things that an organisation needs to do ………….
but not at any cost!
Benefit:Cost Ratios (BCRs) are mostly always the
key to demonstrating the value for money (VfM)
of investments in change and projects
VfM =
Benefits
Costs
What links benefits and value management?

4. Definitions
▪ Benefits Management (and BRM)
– The identification, definition, tracking, realisation and optimisation of benefits,
usually within a programme which can incorporate benefits identified via a
MoV study … (Managing Benefits and MoV)
▪ Value Management (and MoV)
– A systematic method to define what value means for organisations and to
communicate it clearly to maximise value across portfolios, programmes,
projects and operations … (MoV)
▪ Business Case
– The justification for an organisational activity (strategic, programme, project,
operational) which typically contains costs, benefits, risks and timescales and
against which continuing viability is tested … (Managing Benefits and MoV)

5. What are the similarities? - Mapping style

6. What are the similarities? – Line of sight
Typical Benefits Dependency Map Typical Value Function Diagram

7. Similarities - The rigour and the processes

8. The business case and BCRs
▪ HMT Green Book Five Case Models will be required for all public sector spending proposals
on infrastructure, through the stages of: Strategic Outline Case (SOC), Outline Business Case
(OBC) and Full Business Case (FBC).
▪ The five cases represent a set of logical questions:
1. The strategic case – Is there a compelling case for change?
2. The economic case – Is it value for money spend from the public purse?
3. The commercial case – Is it attractive to the market and can it be procured?
4. The financial case – Is it affordable in the context of budget and other priorities?
5. The management case – Is it deliverable or achievable?
▪ DfT will require the use of their webTAG modelling and appraisal guidance as a means to
establish the economic case for a preferred scheme.
▪ But what do you do to establish a reliable vehicle for option testing over and over again? One
method is to create a Value and Benefits Model akin to Multi-Criteria analysis (MCA).

9. Similarities - Staged and iterative interventions

10. What is the difference between benefits and value?
▪ The overwhelming case for BM is that it gives assurance that the
originally planned benefits are going to be attained and have been
attained. This is considerably “better value” than not attaining them
fully or properly, but it is not necessarily best “value for money” at all.
▪ The overwhelming case for VM is that you only achieve “value for
money” if you first consider how important something is, before you
decide how much it is worth spending on it, relative to its importance.
This means that you need optimum benefits for least cost because
affordability is invariably an issue.

11. What does VM and BM have in common?
▪ Both Value and Benefits Management:
– rely on application of underlying rigour for success;
– are best applied iteratively, through stages of a lifecycle;
– are used to provide assurance that outputs and benefits are appropriate;
– lend themselves to use of workshops;
– need trained facilitators to harness creativity and manage dynamics;
– need qualified practitioners to apply rigour, use the right tools, properly and at the
appropriate time;
– need stakeholder consensus to have the proper effect;
– use mapping to show useful ‘lines of sight’;
– start with vision and objectives – i.e. from the ‘get-go’;
– identify and justify outputs; and
– improve value and used together, improve VfM.

12. What are the critical links?
▪ The evidence of alignment is clear:
– The processes and methodologies are similar
– The times for action coincide
– The skills required are similar
– Both transcend PPM – initiation, investment management, business case, asset
management and operations
▪ Both VM and BM identify outputs (enablers)
– BM articulates the importance of the benefits through mapping and profiling and
transference into the business case
– But how do we know what the shape and size of the outputs (enablers) and change
initiatives need to be, to generate those benefits when put into operation?
– How do we know how much it is worth spending on those outputs?
– We have to use VM to optimize the value of attaining benefits.

13. The case for V&B
▪ There is a convincing argument to integrate the VM & BM
disciplines over the project or business change life cycle,
over the asset life cycle, or wider for organisation
development and business as usual, whichever is the
breadth of focus.
▪ The objectives and principles of each approach need to be
carefully maintained, but they should fully interact so that
benefits can be realised that truly represent value for
money, not just improved value.

14. Cycle of V&B Management

15. A working benefits and value appraisal model
▪ The Value for Money test
▪ The economic case

16. VM & BM relationship with other disciplines

17. Q&A