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SOLUTIONS PRESENTATIONS . Project Challenge – Mar 2007 . Benefits Realisation Management. Ensuring change adds value and delivers planned business benefits. Gerald Bradley (Chairman of Sigma) 14 th March 2007. Achieving the expected or potential benefits is not the norm.

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SOLUTIONS PRESENTATIONS


Project Challenge – Mar 2007

Benefits Realisation Management

Ensuring change adds value and delivers planned business benefits

Gerald Bradley

(Chairman of Sigma)

14th March 2007


Achieving the expected or potential benefits is not the norm

  • OASIG Survey Results:

    • 80-90% do not meet their performance goals

    • ~80% of systems delivered late or over budget

    • ~40% of developments fail or are abandoned

    • <40% fully address training and skill requirements

    • <25% properly integrate business and technology objectives

    • 10-20% meet all their success criteria

  • sigma’s View:

    • Most companies achieve between 10% and 25% of potential benefits from their IT Investments and change programmes

  • Recent survey on Benefits from IT Projects:

    • Only 25% of organisations are measuring benefits

    • Of these 25% only 25% are observing benefits in line with expectations

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Who are we sigma
Who are we (sigma)?

  • Pioneer of the leading methodology for Benefit Realisation Management (BRM)

  • Established 1986

  • Specialist provider of Benefit Realisation Management consultancy, education and software

  • Partner to many leading private and public sector organisations


Sigma s clients include

Banking and Financial Services

Abbey National

AXA Insurance

Barclays Bank

Bradford & Bingley

Cornhill Insurance

Friends Provident

Hewitt Bacon & Woodrow

Lloyds TSB

Mellon Bank

NatWest Bank

UnumProvident

Healthcare and Pharmaceuticals

Amersham Health

AstraZeneca

GlaxoSmithkline

sigma’s clients include:

  • Central Government and other Public Sector

  • Department for Transport

  • Foreign & Commonwealth Office

  • Highways Agency

  • Home Office

  • MOD

  • National Air Traffic Services

  • Office of National Statistics

  • OGC

  • Oil and Gas

  • BP

  • Canadian Natural Resources Limited

  • Shell

  • Police

  • Over 30 Police Forces

  • Police IT Organisation (PITO)

  • Scottish Police IS Group (SPIS)

  • Miscellaneous Private Sector

  • Associated British Foods

  • BT

  • General Motors

  • Lloyd's Register of Shipping

  • Orange

  • United Utilities


Benefits – why consider them? what are they?

Foundations for success

Be serious about realising benefits

Don’t neglect ‘business change’

Begin with the vision or end goal

Some proven tools and techniques

Strategy Maps

Benefits Maps

Benefit Dependency Maps

Investment Assessment Matrices

Process, roles & responsibilities, available support

Successful Benefit Realisation


Benefits why how and what
Benefits – why? how? and what?

  • The only valid reason for investment in change is the realisation of benefits

  • So change should always start with benefits and end with benefits

  • In fact benefits should be the core of any change project – the central theme – not an afterthought

  • But what is a benefit – ‘an outcome of change perceived as positive by a stakeholder’

So success is the timely realisation of the expected benefits

  • This is not automatic, it doesn’t just happen, it must be managed – Benefit Management


Purpose to improve the roi from change
Purpose: To improve the ROI from change

What is success? - the purpose of programmes/projects

Return

More

benefits

Sustained

benefits

Earlier

benefits

Time

Fewer wasted

investments

ChangeDirector


Why consider benefits

To justify?

To measure?

To harvest?

In UK until 1990

In UK in the new millennium

In UK in the 1990s

Measurement

Measurement

Justification

Justification

Justification

Achievement

Emphasis shift

Harvesting

Measuring

Justifying

Why consider benefits?


Process focus on the real goal objectives benefits

External Drivers

Cultural Factors

Stakeholders

Business Change

BRM

Enablers

Benefits

Objectives

Process:Focus on the real goal - Objectives & Benefits

As is

Can be


Bridging between enablers and objectives
Bridging between enablers and objectives

Projects delivering Capabilities

The bridges may consist of processes or changes or intermediate benefits

To reduce costs

Corporate or Programme Objectives

To increase effectiveness

To Improve deployment

To speed up responses


Top level control

Projects delivering Capabilities

To increase

effectiveness

Centralised delivery

Business unit delivery

To Improve

deployment

Enabling

Changes

Intermediate

Benefits

Business

Changes

End

Benefits

Enablers

To speed

up responses

Business change activities

Business change activities

Programme level work streams

To reduce costs

Business Case

Project(s)

Project(s)

Building a programme around its benefits

Corporate or Programme Objectives

Benefit Realisation Plan

Vision

End Goal

Drivers


An example of a bridge which distinguishes between features changes and benefits
An example of a ‘bridge’ which distinguishes between Features, Changes and Benefits

Change in Working Practice

Benefits

Feature

Improved

succession

planning

Business Objective

Technology

Improved performance of Country Mgrs.

Interactive working with Country Mgrs.

Improved launch

planning

Electronic communication

Increased

sales

Maximised

launch

impact

Cross-fertilisation

between Countries

Information sharing

Meetings Management

More

focused

selling

Shared

‘best

practices’

Captured learning

To

Increase

profit

Co-authoring documents

Faster resolution of pricing issues

Increased

margin

Improved

pricing

Document Management

Electronic discussion

Increased effectiveness

More focused

sales force

Search facilities

Reduced

costs

Increased efficiency


Engage Features, Changes and Benefits

stakeholders

Change Process with Review Points

1.

Set vision and objectives

R6

R1

2.

Identify benefits and changes

6.

Manage performance

Strategy

R5

R2

Delivery

3.

Define

initiatives

5.

Manage

initiatives

4.

Optimise

initiatives

R3

R4


Use drivers to determine objectives for the change Features, Changes and Benefits

From a representative set of stakeholders gather answers to the why question - why do we want to undertake this change?

Group these answers and determine group headings expressed as objectives

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Confirming Programme Objectives Features, Changes and Benefits

For a programme to roll-out Benefit Realisation Management (BRM) within an organisation, clustering and linkage resulted in the following Objectives Linkage Diagram (Strategy Map). What would you choose as a set of key objectives for the programme?

To

produce better

quality business

cases

To

improve project

prioritisation

and selection

To improve

stakeholder

management

To improve

benefit tracking

and reporting

To maximise

benefit delivery

from each

programme

To increase

shareholder

value

To introduce a

standard Benefit

Management

Methodology

To improve

business

strategy

To change to a

more benefit

focused culture

To increase

awareness and

understanding of

benefit realisation

issues


Confirming Programme Objectives Features, Changes and Benefits

For a programme to roll-out Benefit Realisation Management (BRM) within an organisation, clustering and linkage resulted in the following Objectives Linkage Diagram (Strategy Map). These objectives are key and bound the programme.

To

produce better

quality business

cases

To

improve project

prioritisation

and selection

To improve

stakeholder

management

To increase

shareholder

value

To improve

benefit tracking

and reporting

To maximise

benefit delivery

from each

programme

To introduce a

standard Benefit

Management

Methodology

To improve

business

strategy

To change to a

more benefit

focused culture

To increase

awareness and

understanding of

benefit realisation

issues


1. Features, Changes and BenefitsImproved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

2. Improved

management of

investment process

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

3. Improved

awareness

of options

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

Creating a Benefits Map for each of the bounding objectives

To improve

project

prioritisation

and selection


Creating the Benefit Dependency Map from the Benefits Map Features, Changes and Benefits

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

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project

prioritisation

and selection

2. Improved

management of

investment process

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

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3. Improved

awareness

of options

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

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1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

1. Improved

understanding

of requirements

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Benefit classification
Benefit Classification Features, Changes and Benefits

  • Benefits can be usefully classified in a number of ways.

  • Some frequently used classifications are:

  • Beneficiary - Stakeholders who will feel they receive the benefit

  • Benefit category - generic or family grouping

  • Boston Grid - Business impact

  • sigma Value Type - value expectation

  • Change Type - degree of change required for benefit achievement

Classification frameworks may be used as an aid to benefit identification or to classify benefits already identified in order to aid analysis and the management of expectations



Sigma value types
sigma Features, Changes and Benefits value types

Value may be predicted with confidence

Fewer steps in a process

Reduced costs

Quicker performance of tasks

Value may be predicted on the basis of historic trends

Increased sales

Logically a change may be anticipated whose value may be measured but not predicted

Improved management of insurance risk

Greater customer satisfaction

May be anticipated, but difficult to substantiate

Improved image

Example

Value type

Definition

Financial

Non-financial

Tangible

Definite

Expected

Logical

Intangible


4. More time spent with customers Features, Changes and Benefits

2. Faster response to customers

8. Increased sales revenue

9. Improved networking

5. More coffee breaks

1. Fewer steps in a process

3. Improved productivity

6. Shorter working day

10. Improved staff morale

11. Reduced salary costs

7. Fewer staff

Value benefits in the way they are described

If the benefit is “fewer steps in a process”, the measure, which is also the value of the benefit is the number of steps in the process – the baseline may be 72 and the target 55 and the value at any point is the current number of steps in the process.

It is important not to try to give this a financial value, as of itself it is not a financial benefit. It may lead to a financial benefit, which would be shown on the Benefit Map, but this depends on the intention.

Based on the above map, reduced salary costs is only one of four possible end benefits, it may occur several months after fewer steps has been achieved and additional changes (e.g. making staff redundant) may be required in order to achieve this later benefit.


Benefit linkage chart for the whole investment Features, Changes and Benefits

Case Example Major Bank

Improved customer service

Improved image

Fewer complaints

More high value customers

Fewer errors

Less unpaid overtime

Improved staff morale

More high

value sales

Customer

database and

sales processing

system

Easier sales processing

More quality time with customers

Increased productivity

Better information on customers and sales profitability

More focused selling


Four reasons for tracking all / most of the benefits in the Benefit Linkage Chart

  • To know that a change in the end benefit can be attributed to the project/programme

  • To know that all paths in the linkage chart are operating in order to generate the maximum improvement in the end benefit

  • To satisfy the needs of different stakeholders - e.g. sales processing; customer relations; HR

  • To have some interim milestones, rather then waiting two years to see whether the sales had improved


Predictive model
Predictive model Benefit Linkage Chart

Value of the measure

Target

Baseline

M2

Target

Baseline

M1

T1 T2 T3 T4

Time

Don’t try and be more sophisticated than this in your predictions and use months (or preferably quarters) as your minimum time interval


Tracking the benefits
Tracking the benefits Benefit Linkage Chart


Software supports RAG Status Benefit Linkage Chart(including on Benefit Linkage Charts)

Case Example Major Bank

Improved customer service

Improved image

Fewer complaints

More high value customers

Fewer errors

Less unpaid overtime

Improved staff morale

More high

value sales

Customer

database and

sales processing

system

Easier sales processing

More quality time with customers

Increased productivity

Better information on customers and sales profitability

More focused selling


Obtaining further help Benefit Linkage Chart

The book gives a very full and comprehensive treatment of benefit realisation with application to projects, programmes and portfolios.

The book, published in June by Gower @ £55, is available from Sigma’s stand today @ £48.


Complete toolkit: Benefit Linkage Chart

  • Methodology A consistent, comprehensive, flexible and scaleable process

  • A circular process which can be entered at any point

  • A proven process tested in many different environments

  • A bag of many different techniques to suit a wide variety of situations

  • Education Education to change mindset

  • War stories from a diverse variety of organisations

  • Consultancy To embed the approach in the behaviours and culture of the organisation

  • Workshop facilitation to engage stakeholders and secure commitment

  • Partnership consultancy to transfer skills through whole life-cycle

  • To advise and mentor in unusual and complex situations

  • Training To introduce an extensive set of techniques.

  • To give guidance as to their use - why? when? how?

  • Software To manage the data, in order to:

    • Improve the quality and consistency of information

    • Analyse and prioritise solution options

    • Manage cross-programme dependencies

    • Monitor programme and portfolio performance


Some good news Benefit Linkage Chart

Benefit Realisation Management (BRM)

can and does make a difference

Instead of 20% of potential benefits you could be enjoying at least 80% of potential benefits


SOLUTIONS Benefit Linkage ChartPRESENTATIONS


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