Benefits in Practice SeriesIdentifying and Managing Benefits

19th June 2013The Innovation Space, BIS

Agenda1:30 Welcome and Introductions

1:45 Setting the Context: Corporate Strategy and Benefits

2:10 Case Study Exercise 1 (groups of 3 participants)

2:30 Benefits Lifecycle

» Benefits identification and modelling

3:00 Case Study Exercise 2

» 3:30 Feedback to group (content)

» 3:50 Aligning Benefits Realisation to the wider organisation

» Ownership, Governance and Convergence

4:25 Summary and Close

Introduction to Presenters

Peter Glynne – Co-Chair of Benefits Management SIG

Nick Wensley – Co-Chair of Benefits Management SIG

Neil White

Hugo Minney PhD

What are you going to get from this afternoon?

Establish a strong base of practical experience

Consider different approaches to benefits identification and modelling

Consider new ways of thinking and how to drive innovation

Explore effective benefits leadership

Network and share experience

Setting the ContextCorporate Strategy and Benefits Realisation

“A world in which all projects succeed”

APM’s 2020 Vision

Impossibility or deliberately aspirational?

Discussion Point:

What does Benefits realisation mean to your organisation?

In three words or less…..

MeasurementActivists

Full Cycle Governance

A future in which all projects succeed…

Right Things

Right Way

Done Well

Portfolio ManagementLeadership, Alignment, Value Optimisation, Programme selection, Portfolio Adjustment

Programme Management

Business Sponsorship, Ownership, Coordinate complementary and interdependent projects to

realise …

Project ManagementManagement of budget, schedule and

resources to deliver …Capability

Benefits

Strategic Objectives

Getting BenefitsJohn Thorp

A future in which all projects succeed

Engage the right people in the business – so they want success

Effective cross-boundary working and decision-making at executive level

Incentivise organisational convergence to pull together work on business benefits

Recognise the need for agility and flexibility … instead of just working to the next milestone

A clear connection with corporate strategy. The ‘WHY’ of projects.

Case Study Exercise 1HS2 Context and Strategic objectives

20 minutes in groups of three

Consider the following Nathan Coyne article: http://www.politics.co.uk/news/2013/05/09/make-the-case-for-hs2-benefits-say-experts

Identify the top six stakeholder groups

From the point of view of DfT: Consider six points of strategic value for their investment in HS2

Benefits LifecycleBenefits Identification and Modelling

All the focus has been on the success of Project & Programme Management……

What makes Project Management successful?

Project Management Success Criteria

– Time / Budget / Quality

– Business Objectives and Business Benefits

PwC 2012 – greater maturity, higher success rate

– Use an established method for project management

– Use certified practitioners (you wouldn’t trust a pilot . . )

In a nutshell: Professionalism….

Should we not apply the same professionalism to Benefits Realisation?

The Benefits LifecycleA Strategic and Integrated Approach based on partnership

Benefits Mapping – Some Techniques

Considering specific aspects of HS2

Cassandra Benefits Management model (Cranfield)

Results Chain (DMR / Thorp)

Benefits Dependency Map (Bradley)

Benefits Value Mapping (Glynne)

The benefits map or model is ONLY as an aid to communication and decision making. It must be simples, easy to understand and easy to communicate.

Too many models are only understood by the author

Key Point

Cassandra / Cranfield

ENABLERSENABLING CHANGES

BUSINESS CHANGES

BUSINESS BENEFITS

INVESTMENT OBJECTIVES

Treasury guarantees

Planning laws

Public consultation

Investment

Routes for line

Linked investment

Stations and

community travel

High Speed line

Journey times

Link economic centres

Major infrastructure

build

Results Chain (DMR/ Thorp)

HS2HS2

Shorter Commute

TimesFaster

More reliable

Shorter Business

Meeting journey times

Work London, Live

in regions

Work in Regions,

more business

Regional Economic

Growth

constraint is journey

time

more meetings = more

business

Last MileLast Mile

PricePrice

Phase 2

Phase 2

Legislation to

compulsory purchase

land

Legislation resource release

Benefits Dependency Map (Bradley)

To Increase Regional Economic

Growth

To increase jobs in regions

To widen labour pool

To increase passenger satisfaction

Reduce commute time

Shorter meeting

journey time

Increased UK Trading

Improved GDP

Increased regional spend

More good workers attracted

to London

HSR Bill

HS2 Hybrid Bill

Link economic centres ( 2)

Link Midlands to London ( 1)

ObjectiveBenefitBusiness Changes

Enabler Disbenefit

Named New Capability

Project, Programme or Portfolio

New

Cap

abili

ties

Stra

tegi

c Va

lue

Ope

ratio

nal B

enefi

ts

Strategic Objective

Effectiveness

Strategic Objective

Effectiveness

Strategic Objective

Effectiveness

Action led word describing the

Operational Benefit

ABenefit Type (1 of 5)

How to Read the Benefits Value Map.....

New tangible capabilities directly attributable to the investment in the

project, programme or portfolio. New to the business area or organisation

e.g. What we are buying for our investment?

Operational, functional day to day benefits relevant to the organisation Five types of operational benefit to enable consistency

and comparability. KEY LINK TO OPERATIONAL PERFORMANCE

MANAGEMENT

A dashboard is developed for every operational benefit showing key

performance indicators, priority ranking and ownership

There must be a direct correlation/relationship from a capability to an

operational benefit

Five Types of Operational Benefit CRITICAL TO MEASUREMENT1.Time – measured in hours, day, weeks etc.2.Cost – measured in £3.Satisfaction/Assurance – measured by a before and after perception survey showing a measurable improvement4.Income – measured in £5.Disbenefit – the negative consequences of change - measured using one of the four types described above

The colour boxes highlight the contribution of the operational benefit to

strategic value in the bottom row. It must reflect the organisation’s or group’s business plan or strategy

Unique identifier for each operational

benefit

Showing the contribution of individual operational benefits to the business plan or strategy. Two categories:1. Efficiency 2. Effectiveness

Benefits Value Mapping

Ope

ratio

nal B

enefi

tsH

ow w

ill it

cha

nge

our

perf

orm

ance

?St

rate

gic

Valu

eH

ow w

ill it

con

trib

ute

to s

trat

egy?

New

Cap

abili

ties

Wha

t are

we

inve

sting

in?

Time Time

Income

Time

Income

Cost

Satisfaction

Assurance

INCREASED ECONOMIC

INVESTMENT IN REGIONS

Effectiveness

INCREASED PASSENGER

SATISFACTION WITH SERVICES

Effectiveness

?Effectiveness

?Effectiveness

A

B

C

D

E

F

G

H

I

J

Focus on change, business performance and measurement

Exercise 2 – HS2 Benefits at operational level 30 minutes in threes

Partially completed template – fill in the gaps

Share from your group – please nominate spokesperson (1 minute feedback time)

– Results of discussion on HS2

Aligning Benefits Realisation to the Wider Organisation

Ownership, Governance and Convergence

Benefits Realisation Common Behaviours across organisations

And there’s always the impact of the media.....

CONVERGENCEWhat are the Opportunities for collaboration?

Operational

Perform

ance

Management Financial

Forecasting/

Budgeting

Strategic

Planning and

Evaluation

Benefits

Realisatio

n

PMO

Change

Management

Ever increasing professionalism in the management of change within organisations

Communications

(internal a

nd

external)

Benefits Realisation: Effective Partnership WorkingLikely degree of engagement across the Change Journey within a typical organisation.

Typical Professional Group Strategy / Policy Delivery Embedding of Change

Project/Programme Management

Finance Profession

Sponsors of Change

Economists

Strategists

Business Change Managers

External Relations/Communications

Human Resources

Operational Management

Procurement

Contract Management

Organisation Executive Board

Internal Audit

Understanding Behaviours, Governance and Convergence

What to look out for across your organisation?

Process Obsessed Benefits Realisation

We MUST follow the prescribed process/manual

People looking to find a problem for a waiting benefits solution....

My favourite solution will solve any ill...........

Limiting the focus to only the Project or Programme.......

We don’t want to INVOLVE other areas of the business.. too political

Believing that lack of success is other people’s issue for not understanding how important something is..........

They won’t listen and they don’t want to understand

Groupthink on the approach to benefits realisation......

We all agree so it must be the right approach.....???

Governance of Benefits

Governance is one of the most important factors in the successful realisation of benefits. Not just at Portfolio level which is critical to success!!

Governance needs to be a ‘partnership approach’ between the project/ programme and wider business organisation (operational/business as usual)

The wider business organisation should always own the benefits. Align director level and operational ownership. Two level ownership.....portfolio level and operations

The project/ programme should facilitate the benefits on behalf of the business organisation – not own the benefits……….

Governance is closely linked to leadership and organisation culture – arguably the most important aspect of successful benefits realisation. GET IT WRONG AT YOUR PERIL as governance can be difficult to change once implemented

Key Point

Challenges in Implementing a Robust Governance Model

• Getting senior executives to take responsibility for individual or collective benefits, especially if there is a history of project/programme failure within the organisation

• Jargon/technical language trap

• Ensuring that there is a clear understanding of roles and responsibilities for benefits realisation. Communication, Communication, Communication

• Maintaining momentum – if the governance model becomes ineffective, senior managers will very quickly lose confidence in it.

An example Governance Model for a Single Organisation

Senior Benefit Owners are also likely to be members of the Executive Committee / Steering Group

Organisation Board

Executive Committee/ Steering Group

Senior Benefit Owner(s)

Benefit Owners

Programme Management Office (PMO)

Benefit Owners will be drawn from across the organisation based on the most appropriate fit

Support for benefits management across all levels of the governance model including:

- Management Information

- Specialist advice and support

- Appropriate Challenge

- Oversight of double counting

Project/ Programme Delivery

Facilitate the identification and planning of benefits on behalf of the wider business

An actual model used within a UK public sector organisation

An Example Governance Model for Multiple OrganisationsDuring Implementation

Regional Organisation Board x 11

Chief Information Officer (CIO)

RegionalBenefit Leads

Local Organisation Board x 150

ICT Director

National Change and Benefits Management

team

Programme Benefits Manager

Programme Manager

Project Manager

NationalImplementation

Managers

SUPPORT SUPPORT

LocalBenefit Leads

National Programme Board

Parent Organisation Board

Project Board

Programme Implementation

Core Benefit Owner(s)

Programme Delivery Business As Usual

Senior Benefit Owner(s)

Action Owner(s)

Project Delivery Business As Usual

CIO Forum

An actual model used within a UK public sector organisation

An Example Governance Model for Multiple OrganisationsPost-implementation

Regional Organisation Board X 11

Chief Information Officer (CIO) Regional

Benefit Leads

Local Organisation Board x 150

ICT DirectorNational Change and

Benefits Management team

Programme Benefits Manager

SUPPORT SUPPORT

LocalBenefit Leads

Parent Organisation Board

Benefits Realisation

Core Benefit Owner(s)

Business As Usual

Senior Benefit Owner(s)

Action Owner(s)

Business As Usual

An actual model used within a UK public sector organisation

Pushing the Boundaries of ChangeBenefits Realisation across Local Government

Thought Leadership: Six Action Points:

1.Incentivise organisation wide convergence in benefits realisation

1.Move beyond an over reliance on isolated process, low-value templates and certification driven technical knowledge

2.Establish appropriate benefits leadership at the portfolio level

3.Greater external partnership working to deliver change and benefits

4.Greater integration of the cost reduction agenda and benefits realisation

5.Invest in professionalism; innovation and collaboration

Summary and Close

Conclusions – where to go from here

Recap

– Benefits Mapping in context

– Benefits Lifecycle

– Ownership and Governance

– Conclusions from exercises

What would people like to see next?

Some Examples of Approaches

Org 5Customer Group 1

Customer Group 2

Customer Group 3

Org 6

A

B

C

D

E

F

G

Example Stakeholder and Benefits Impact Matrix

High Low

H

The above table illustrates the impact of each benefit on the each stakeholder group. Benefits are in order of sequence only

Org 4Org 3Org 2Org 1

Greater assurance in the quality and integrity of returns

Main Organisation Other Stakeholders

Reduced staff costs on administration of customer's hard copy financial accounts

Increased assurance in the accuracy of returns and statements being filed

Increased customer satisfaction with the filing of financial accounts

Increased assurance in debt management in Collector Generals

Increased satisfaction with the quality and access to information on financial accounts

Increased confidence in the targeting of interventions based on risk profile

Increased confidence in the targeting of interventions based on risk profile

Operational Benefit

Source: Glynne

Sample Operational Benefit Dashboard

Ref: BenefitA Description Impact Summary

Measurement Question

Method and Unit of Measurement

Baseline Value

Target Value Actual ValuesMeasurement to

be done by

PriorityLikelihood of

Failure

Dependency on other Benefits

Benefit Category

Actions Required to Realise the Benefit Ownership Start Date

EndDate

Risks Impacting Realisation of the Benefit Impact Probability Mitigation

Director Owner

Operational Owner

Current RAG Status

Exposure Rating 16AN Other

AN Other

Question to be asked to measure the benefit

How will the benefits be measured and what is the unit of measurement. Alignment with organisational performance management including relevant KPIs

Measurement Dates

? ?Baseline

Actual(s)

Time ?Cost?Satisfaction ?Income ?Profitability ?

4 4

Owner

End date to be realised TBC

Source: Glynne