Identifying and managing benefits masterclass
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The document outlines the agenda and objectives of a benefits management workshop held on June 19, 2013, focusing on effective benefits identification, modeling, and realization in relation to corporate strategy. Participants engage in case studies and exercises to explore various benefits lifecycle mapping techniques and governance structures necessary for successful project outcomes. Key themes include the importance of stakeholder engagement, cross-boundary collaboration, and the challenges of implementing robust governance within organizations.
Identifying and managing benefits masterclass
- 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?
- 6. Discussion Point: What does Benefits realisation mean to your organisation? In three words or less…..
- 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
- 10. Benefits Lifecycle Benefits Identification and Modelling
- 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?
- 14. The Benefits Lifecycle A Strategic and Integrated Approach based on partnership
- 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
- 16. Cassandra / Cranfield ENABLERS ENABLING 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
- 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
- 20. Benefits Value Mapping OperationalBenefits Howwillitchangeourperformance? StrategicValue Howwillitcontributetostrategy? NewCapabilities Whatareweinvestingin? 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
- 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
- 22. Aligning Benefits Realisation to the Wider Organisation Ownership, Governance and Convergence
- 23. Benefits Realisation Common Behaviours across organisations And there’s always the impact of the media.....
- 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
- 26. Understanding Behaviours, Governance and Convergence What to look out for across your organisation?
- 27. Process Obsessed Benefits Realisation We MUST follow the prescribed process/manual
- 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?
- 40. Some Examples of Approaches
- 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
Editor's Notes
- #8: 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
- #10: We’ll come on to this in the Benefits Lifecycle section
- #11: 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
- #12: 2:30 start
- #13: Lots of reports on Project Management, you will probably recognise a lot of them including Standish Chaos reports
- #14: 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?
- #15: Some reports where PAC and MPA are asking to see benefits, or align delivery with benefits
- #16: 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
- #17: 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.
- #18: 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 …)
- #19: 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)
- #20: 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
- #24: 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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- #40: 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
- #42: 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