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Barclays Internal Audit How can you help Change Programmes to deliver

Agenda. Benefits of Change AuditKey ChallengesBusiness Case ReportingOverall AssessmentsCollaborative WorkingKey SuccessesQ

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Barclays Internal Audit How can you help Change Programmes to deliver

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    1. Barclays Internal Audit How can you help Change Programmes to deliver…? BANKING AND FINANCIAL SERVICES INTERNAL AUDIT GROUP 30th January 2008 Chrissie Renyard – Audit Manager

    2. Agenda Benefits of Change Audit Key Challenges Business Case Reporting Overall Assessments Collaborative Working Key Successes Q&A’s Strategic Change Project Failure Statistics Examples of Project Failure Key reasons for Project Failure Change Audit – Mission Key Project Management Risks Key Project Lifecycle Risks

    3. Strategic Change Boards are increasingly making commitments to achieve business results through programme outcomes These commitments are delivered through projects with project outputs articulated as benefits in a business case For those organisations that measure benefits, on average they are 25% behind their original portfolio commitment Only 2% of organisations achieved targeted benefits all the time In addition to the the top line being affected customers are often impacted by the costs of failure! Source: KPMG Assurance Services

    4. Project Failure Statistics Across all industries, project performance is generally poor: 53% of all projects are delivered late, over budget & with reduced benefits 18% of all projects fail - cancelled prior to completion Only 52% of required features & functions make it to the released product 56% of firms wrote off at least one project with average loss incurred of 8m 60% of firms experienced difficulty in identifying key project requirements Only 29% of all projects succeed - on time and on budget with the required features and functions Source: Deloitte Assurance Services

    5. Examples of Project Failure The Channel Tunnel Initial cost £4 billion - final cost £7.5 billion Canary Wharf Initial cost £1.7 billion - final cost £2.8 billion Euro Disney Initial cost £1.3 billion - final cost £2.3 billion Swanwick Air Traffic Control Centre Initial cost £300 million - final cost £600 million The ‘state of the art’ operation delivered six years late!

    6. From The Times January 29, 2008 Taxpayers face £500m bill for BAE projects Two of BAE Systems’ flagship projects have experienced a massive budget blowout over the past two years, leaving British taxpayers facing a £500 million bill. BAE was forced to write off £800 million in 2003 after delays to Astute and Nimrod, the coastal surveillance aircraft, became so severe that the contracts had to be renegotiated. According to the select committee, the four Astute submarines will now cost £3.79 billion against an initial budget of £2.58 billion, a 47 per cent increase. The six Daring-class destroyers will cost £6.46 billion compared with an initial estimate of £5.47 billion, an increase of 18 per cent. The destroyers will enter service two years late and the submarines at least six years late. James Arbuthnot, the committee chairman, said: “We do not understand precisely where these extra costs are coming from and we are disappointed that the MoD has failed to limit the increases. We want more clarification on why these projects are getting more expensive.”

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