Benefits in Practice Series: Identifying and Managing Benefits
1. Benefits in Practice Series
Identifying and Managing Benefits
19th June 2013
The Innovation Space, BIS
2. Agenda
1:30 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
3. Introduction to Presenters
Peter Glynne – Co-Chair of Benefits Management SIG
Nick Wensley – Co-Chair of Benefits Management SIG
Neil White
Hugo Minney PhD
4. 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
5. Setting the Context
Corporate Strategy and Benefits Realisation
“A world in which all
projects succeed”
APM’s 2020 Vision
Impossibility or deliberately
aspirational?
7. MeasurementActivists
Full Cycle Governance
A future in which all projects succeed…
Right
Things
Right
Way
Done
Well
Portfolio Management
Leadership, Alignment, Value Optimisation,
Programme selection, Portfolio Adjustment
Programme
Management
Business Sponsorship, Ownership, Coordinate
complementary and interdependent projects to
realise …
Project Management
Management of budget, schedule and
resources to deliver …
Capability
Benefits
Strategic
Objectives
Getting Benefits
John Thorp
8. 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.
9. Case Study Exercise 1
HS2 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
Identify the top six stakeholder groups
From the point of view of DfT: Consider six points of strategic value
for their investment in HS2
11. All the focus has been on the success of
Project & Programme Management……
12. 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….
13. Should we not apply the same
professionalism to Benefits Realisation?
15. 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
17. 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
Mile
Last
Mile
PricePrice
Phase
2
Phase
2
Legislation
to
compulsory
purchase
land
Legislation
resource
release
18. 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)
ObjectiveBenefit
Business
Changes
Enabler Disbenefit
19. Named New
Capability
Project, Programme or
Portfolio
NewCapabilitiesStrategicValueOperationalBenefits
Strategic
Objective
Effectiveness
Strategic
Objective
Effectiveness
Strategic
Objective
Effectiveness
Action led word
describing the
Operational
Benefit
A
Benefit 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 MEASUREMENT
1.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 improvement
4.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
21. 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
24. CONVERGENCE
What are the Opportunities for
collaboration?
Operational
Performance
Management Financial
Forecasting/
Budgeting
Strategic
Planning and
Evaluation
Benefits
Realisation
PMO
Change
Management
Ever increasing professionalism in the management of change within organisations
Communications
(internal and
external)
25. Benefits Realisation: Effective Partnership Working
Likely 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
28. People looking to find a problem for a
waiting benefits solution....
My favourite solution will solve any ill...........
29. Limiting the focus to only the Project or
Programme.......
We don’t want to INVOLVE other areas of the business.. too political
30. 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
31. Groupthink on the approach to benefits
realisation......
We all agree so it must be the right approach.....???
32. 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
33. 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.
34. An example Governance Model for a Single Organisation
An actual model used within a UK public sector organisation
35. An Example Governance Model for Multiple Organisations
During Implementation
An actual model used within a UK public sector organisation
36. An Example Governance Model for Multiple Organisations
Post-implementation
An actual model used within a UK public sector organisation
37. Pushing the Boundaries of Change
Benefits 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
39. 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?
41. Org 5
Customer
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
42. Sample Operational Benefit Dashboard
Ref: BenefitA Description Impact Summary
Measurement
Question
Method and Unit of
Measurement
Baseline
Value
Target Value Actual Values
Measurement to
be done by
Priority
Likelihood of
Failure
Dependency on other
Benefits
Benefit
Category
Actions Required to Realise the Benefit Ownership
Start
Date
End
Date
Risks Impacting Realisation of the Benefit Impact Probability Mitigation
Director Owner
Operational Owner
Current RAG Status
Exposure Rating 16
AN 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
Notas do Editor
Importance of Portfolio, aligning the Strategic Objectives and constraining to Corporate Governance. Everything within constraint of a single portfolio – avoid double-counting by defining measurement and collecting results at Portfolio level Not getting into discussion on definition of Programme and Project Motivating people (activists) Analogy with flying an aeroplane
We’ll come on to this in the Benefits Lifecycle section
You have the whole of the space in The Innovation Space, but please don’t go outside Please be back in time for 2:30 start on Benefits Lifecycle This forms the foundation for the next exercise so feedback will be after the next exercise
2:30 start
Lots of reports on Project Management, you will probably recognise a lot of them including Standish Chaos reports
5 criteria for success used by PwC – Iron triangle Business Objectives On this basis 68% fail. 60% of failure is due to internal problems in particular failure to plan. You wouldn’t trust a pilot to fly you across the Atlantic who had just completed an online course and got a certificate – you’d want to see ability and experience. Do you let novices loose on your big project investment?
Some reports where PAC and MPA are asking to see benefits, or align delivery with benefits
Strategy dictates what are the gaps that need filling, whether Opportunity Response to legislation change (what would it have cost to comply without change?) Cost improvement Benefits the WHY of projects Four stages of Benefits Management, starting with the idea and proposal to start an OBC and BC. Benefits Planning will influence decisions during project/ programme delivery, to optimise benefits Not constrained by tolerance on the upside, although on downside always consider changes in the environment (cost of finance, key skills etc) which might pull rug from business case Handover and commitment by frontline staff to realise benefits Benefits Review leading to further optimisation, perhaps without a new project
Note: MSP Benefits Map (p62), Benefits Logic Map (p65) or Investment Logic Map (p32) not used. Some factors to help decide when each of these methods should be used: Where are you in the process? If change are underway then the value to gained through stakeholder inclusion is lost. Use value mapping or results chain. If at beginning or cycle then those techniques that major on drivers and objectives could be favoured. Is consensus desirable or sought? Bradley BDN enables stakeholder participation. How large is the programme? Value Mapping favours large initiatives. Objective and benefits relational maps may get unwieldy. Benefits Management Capability maturity of organisation? Choice of mapping technique could be made to favour existing capabilities of personnel.
Cassandra / Cranfield Benefits Dependency Network (developed 2006) Given understanding of prevailing change drivers: Work to right to identify strategic objectives. Objectives are analysed and mapped to benefits to be realised on meeting of objectives. Each benefits is now mapped (right to left) to the changes needed to realise it. This approach recognises the fact that some business changes themselves required to be enabled by upstream changes e.g. IS/IT Working from Right (the Future) to Left What we want What we have to become to get what we want What we have to do to become what we need Working from Left (what we’re doing) to Right Justify a previous decision Find a return for the investment Strengths Simple – can be done in 15-30 minutes Clear linkage between change in the environment and change in the project Collaboration and group working is easy Weaknesses Without good facilitation can become unnecessarily complicated Confusion over definitions and failure to align in neat columns (this project leads to this benefit which leads to this project …)
Results Chain (DMR/Thorp) Provides a graphical representation of the vents and conditions required to achieve stated business outcomes. Four components: Outcomes (benefits) – circles Initiatives – squares Contributions – shown as arrows Assumptions – hexagons Strengths Impact of change in environment or programme/project delivery easy to follow Tasks associated with benefits Promotes discussion Consensus building Shared agreement of how changes will add value Use of Assumptions makes implicit thinking explicit and therefore open to debate Weaknesses Typically maps from the activity to find outcomes Unlikely to unearth new information – usually done by Project Team rather than all stakeholders From single project, benefits may multiply (leading to double-counting)
Gerald Bradley’s Benefits Dependency Map - Neil Dependency path from required enabling changes through to objectives. Three stages: 1 - Building a Strategy Map of linked objectives ( maybe 10 to 16) to explore objectively what the changes must achieve – arrive at 2 to 4 ‘bounding objectives’ to scope the programme 2 - Creating a Benefits Map for each ‘bounding objective: For each bounding objective a Benefits Map is developed. This is developed by working from right to left from the objective, identifying, at each stage, a set of directly contributing benefits. The test for each set is that they are: Collectively sufficient Individually necessary Mutually independent Likely to lead to different kind of change needs 3 - Transforming the resulting Benefits Map into a Benefit Dependency Map : Add the business and enabling changes needed to enable the delivery of the benefits. Strengths Provides a clear line of sight from changes through to objectives - a logical flow Particularly effective in engaging and gaining buy-in from Stakeholders Cane be used to depict progress being made in achieving objectives – benefits can be weighted to show contribution to objectives/ Weaknesses Maps can get complicated – this can be reduced by depicting only bounding and end benefits
What is point regarding explicit and implicit objectives? * VERY IMPORTANT AND USUALLY MISSED I think that the context should explicitly position the people factor. * TOO EARLY – IT COMES UP LATER
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What is point regarding explicit and implicit objectives? * VERY IMPORTANT AND USUALLY MISSED I think that the context should explicitly position the people factor. * TOO EARLY – IT COMES UP LATER
What is point regarding explicit and implicit objectives? * VERY IMPORTANT AND USUALLY MISSED I think that the context should explicitly position the people factor. * TOO EARLY – IT COMES UP LATER