HVR Ref: ISMOR21 Portfolio Presentation Slide 1 HVR Consulting Services Ltd Using portfolio analysis...

HVR Consulting Services Ltd HVR Ref: ISMOR21 Portfolio Presentation

Using portfolio analysis to provide shared BoI decision-making between supplier and customer

David Exelby

[email protected]

HVR Consulting Services

HVR Consulting Services Ltd Slide 2HVR Ref: ISMOR21 Portfolio Presentation

Introduction

Management of complex defence systems requires trade offs throughout the project lifecycle

C A D M I D

Trade-offs throughout the acquisition cycle

Technology platform

System options

Sub-system options

Updates/Modifications

Smart Acquisition acknowledges the need for Shared understanding between all stakeholders Development of through life management plans

Focus for study


Developing through life management plans

• What are the project outputs? • When are they needed? • What are the decisions (plus their criteria)

and activities needed to deliver the outputs?

• When are these decisions and activities needed and what do we need to do to get there?

• Where does the responsibility lie?• What resources and processes do we

need to put in place? • What do we need from other people?

Business and ‘political’ Environment

Time/Cost/ Performance Trade-offs

Whole life Whole system

Stakeholders(who are they, what are their needs, what is their influence?)

Project parameters and targets

Monitoring, review

Risk, Safety, ILS, legislation, etc...

Resources

Military context

Source: http://www.ams.mod.uk/ams/content/docs/tlmp/tlmdocs/writetlm.doc


Case study

Case study centres on the need to develop a long term strategy for prioritisation of work programmes and effective resource expenditure to support a major defence asset sub-system through-life.Key objectives for MoD customer and supplier

Develop a long term work plan out 3-5 yearsEnsure effective dialogue between MoD and its industrial partnerPrioritise a wide range of potential work packages

Developed a programme of work – HVR working with MoD and industrial partner:

Identifying risks associated with the assetAssess impactExplore mitigation optionsPrioritise a work plan


The risk based balance of investment (RBBOI) process

Knowledge capture

RBBOI Prioritisation

BusinessCases

Spares or Maintenance

R&DProgramme Operational

Changes

New DesignWork

PhysicalTesting

• Knowledge capture driven from identification of key risks


Interacting with the decision maker

The customer and supplier needed a shared data repository and analysis framework to develop their long term strategy jointly

MoD SupplierData and analytics

Data collected on individual safety and availability issues and associated mitigations – open book and fixed

Global data for what ifs e.g. resource productivity and cost


Top level user requirements

Visualise sets of complex data in an intuitive way

Provide an aid to communication between supplier and MoD

Provide a methodology to support balance of investment decision making. Mitigation options will be limited by available funding and the study team needs to be able to identify which options can provide maximum benefit

Ensure that a full audit trail is provided from data collection through to decision making

Ensure that supplier and MoD are easily able to update the data on an ongoing basis


Visualisation - portfolio analysis and the Boston Matrix

Relative market share

Mar

ket

gro

wth

rat

e

High Low

Hig

hL

ow£££

Cash cow– today’s breadwinner

Dog– also ran

Question mark– tomorrow’s star?

Star– tomorrow’s cash cow

A technique for charting or categorising the different businesses in a firm’s portfolio and determining implications for resource allocation. Including GE Matrix, these approaches have become universal in business


The HVR generic framework for portfolio analysis

Identify factors to score

Decompose sub factors and metrics

Score options against metrics

Determine sub factor weightings

Analysis of portfolio and recommend-ations

Objectives • To identify dimensions on which to map options

Activities • Interviews with senior managers

• To provide a scoring schema for detailed assessment

• Interviews• Desk based

research• Review

workshops

• Initial scoring of options

• Interviews• For large

portfolios e.g. defence ministries, proformas can be issued

• To determine the relative importance of each sub factor

• Workshop• Structured

weighting exercise applying well tested approaches e.g. Saaty, Swing weight

• To explore the portfolio space and identify opportunities and prioritise

• Data input to portfolio models

• Develop portfolio maps

• Review workshop

• Ongoing appraisal

Consulting support HVR’s Rapid Options Analysis

tools

HVR role

This is tailored to each individual study e.g. HVR involvement in current study centres more on approach and tool development rather than data collection


Developing a factor tree

A framework of factors and sub-factors was developed

Overall Mitigation Option Score

£ Failures UncertaintyReduction

£ Mitigation

£ Material andManpower

£ Other £ Failure # Failures

Asset YearsRemaining

# Components Failure Rate

Reduction inUncertainty

Probability ofMitigation Success

£ Material andManpower

£ Other

Simplified


Visualising the factors

The factor framework coupled with the visualisation allows portfolio mapping of options


Data collection

Supplier undertook extensive interviews using SMEs

Identifying risk scenarios

Assessing risk impacts

Drawing up mitigation options

Assessing required mitigation resources

Generated a large volume of numerical and textual data

Collated in database application

Approximately 1500 records in initial scan







Development of software support tool – RBBOI Options Analysis Tool

HVR developed a bespoke software support tool for all stakeholdersDatabase functionality

Easy updates of raw dataAnalytics

Rapid visualisation of factor scoresPrioritisation algorithmsAbility to save and exchange scenariosAbility to filter option universe







Data is easily reviewed within the application

Source: RBBOI Options Analysis Tool


Using the factor scores

Disguised data


Interpreting the portfolio

Secondary criteria based on• Failure cost• Uncertainty

reduction

Limited benefits?

Priority actions?

Problem children?

MA

cos

t

Overall MA benefit


Analysis process

Several stages

Plan the analysis in terms of initial factors to plot, prioritisation mechanism, global data

Initial exploration of the data

Prioritisation

Re-explore the emerging insights to challenge/explain prioritisation, sensitivity on global data (charge rates, etc)

Select key criteria

Visualise data

Outlier analysis

Prioritise majority data

Reality checks

Explore Prioritise ExplorePlan







Developing prioritisation approaches

Recommended prioritisation factors

• Overall mitigation option score

• Mitigation cost

• Failure Cost

• Uncertainty Reduction

Prioritisation can be made on any of the factors.

• Options can be selected through filtering and sorted

• Prioritisation for the selected options can be performed for:

• Best Estimate

• Best Case

• Worst Case

• “Value for money” Mitigation Benefit Score

• Cost of all aspects of mitigation (materials, manpower, environmental and availability)

• Cost of all aspects of failure (material, manpower, environmental and availability)

• Likely impact on knowledge gaps (probability of success and impact if successful)


Overall MA scores

Tool allows ranking across factors – user can define multiple ranking schemes


Reality check – sensitivity to uncertainty

Worst case Most likely Best caseCR4-1-12-1 CR4-1-12-1 CR4-1-12-1CR10-1-3-1 CR10-1-3-1 CR10-1-3-1CR10-1-1-2 CR10-1-1-2 CR4-1-7-1CR4-1-7-1 CR4-1-7-1 CR10-1-1-2CTS10-1-1-1 CR10-1-2-2 CTS10-1-1-1CR10-1-2-2 CTS10-1-1-1 CR10-1-2-2PP1-1-2-1 PP1-1-2-1 PP1-1-2-1CTS5-1-1-1 CTS5-1-1-1 CTS5-1-1-1CTS5-1-3-2 CTS5-1-3-2 CTS5-1-3-2CTS10-1-4-3 CTS5-1-3-1 CTS5-1-3-1CTS5-1-3-1 CTS10-1-4-3 P8-1-1-1PP1-1-1-2 P8-1-1-1 CTS10-1-4-3CTS10-1-4-1 CTS10-1-4-1 CTS10-1-4-1PP1-1-1-1 PP1-1-1-2 PP1-1-1-2

PP1-1-1-1P8-1-1-1 PP1-1-1-1P8-1-1-2 PP5-1-4-2 CTS10-1-1-2

PP5-1-4-2 PP5-1-3-2 PP5-1-4-2PP5-1-7-2 PP5-2-2-2 PP5-1-7-2PP5-2-2-2 PP5-1-7-2 PP5-2-2-2PP5-1-3-2 PP5-1-2-2 PP5-1-3-2PP5-1-2-2 P8-1-1-2 PP5-1-2-2P8-1-1-3 CTS10-1-1-2 CTS10-1-5-1CTS10-1-1-2 P8-1-1-3 P8-1-1-3CTS10-1-5-1 CTS10-1-5-1 P8-1-1-2PP4-1-2-2 PP4-1-2-2 PP4-1-2-2PP7-1-1-1 PP7-1-1-1 PP7-1-1-1

In this case appears robust to estimates

Top 6 remain across all scenarios


Conclusions

MoD has developed a comprehensive work plan for next year

Fully auditable back to source data

Rapid negotiation of packages between supplier and MoD

(both technical and commercial much shortened)

Communication through the RBBOI tools sets

The RBBOI database and options analysis tool is being updated on a regular basis

Additional mitigation options arise

Track work package progress

Anticipated that approach will be used elsewhere within MoD and industrial partner.

Collective view is that the approach has strengthened interaction between decision maker and supplier


Contact details

HVR Consulting Services LtdSelborne HouseMill LaneAltonHampshire GU34 2QJUK

Tel: +44 1420 87977Fax: +44 1420 89819Email: [email protected]: www.HVRGroup.com

HVR Ref: ISMOR21 Portfolio Presentation Slide 1 HVR Consulting Services Ltd Using portfolio analysis...

Documents

Transcript of HVR Ref: ISMOR21 Portfolio Presentation Slide 1 HVR Consulting Services Ltd Using portfolio analysis...