008 benefits mnagement
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ASSOCIATION FOR PROJECT MANAGEMENT
•APM’s mission statement is: “To develop and promote the professional disciplines of project and programme management for the public benefit”.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT •All organisations invest in change in order
to deliver their business strategy and this is necessary to remain competitive.
BENEFITS MANAGEMENT •Benefits are the single reason why we
undertake change.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT •Often the race for delivery of the project
detract managers from the reason why change was undertaken in the first place.
BENEFITS MANAGEMENT •Most organisations undertake formal
projects and programmes to deliver change.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
•Portfolio management has become the accepted standard for managing the overall set of projects and programmes across an organisation or business area.
BENEFITS MANAGEMENT •Change such as organisational design, employee
engagement and customer communications are all part of benefits change.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
•Formal benefits management is less than twenty years old and has developed out of the limitations of more traditional investment appraisal techniques, such as Return on Investment.
BENEFITS MANAGEMENT •Benefit management is still developing and the
reasons are:
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT •senior executives becoming dissatisfied with
process-led project and programme management not delivering the expected business outcomes;
BENEFITS MANAGEMENT •benefits management is often wrongly seen as a
specialist discipline requiring deep expertise;
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT •benefits management is often misperceived as
only a financial skill-set;
BENEFITS MANAGEMENT •a misperception that benefits management is
benefits tracking which provides monitoring of metrics only after the change has occurred.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
•The increased emphasis on benefits management in the APM Body of Knowledge, PRINCE2 and Managing Successful Programmes is starting to make a difference.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
•The economic climate is driving the requirement for greater value for money, including cost reduction, across both public and private sectors;
BENEFITS MANAGEMENT
•Most business organisations in the UK are experiencing a tightening of financial spending, particularly those in the public sector.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
•Government is facing massive cuts-choices over resource allocation, head-count, capital programmes etc.
BENEFITS MANAGEMENT
•The private sector is facing difficult choices in order to minimise costs in challenging market conditions.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
•In the recent APM national survey, 54% of respondents indicated that cost reduction is a primary driver of projects and programmes in their organisation.
•Approval for investment in change now requires tangible evidence of sustainable benefits, both financial and non-financial.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
•Change is almost continual for business organisations and many people are impacted.
BENEFITS MANAGEMENT
•Portfolio management is now recognised as a standard board-level competency
BENEFITS MANAGEMENT
•According to John Kotter in his Harvard Business Review article on leading change, ‘Up to 70% of change initiatives fail to deliver on the benefits that they set out to achieve’.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
•Traditionally, project and programme management has had limited exposure in the board room.
BENEFITS MANAGEMENT
•Portfolio management is now the accepted standard for managing the overall se of projects and programmes across an organisation.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
•Portfolio management ensures alignment of change with corporate business strategy whilst prioritising the use of resources.
BENEFITS MANAGEMENT
•Ultimately, senior executives are interested in the strategic benefits from change and the associated risks to them.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
•Successful benefits management provides the framework to ensure that portfolio management is benefits focussed.
BENEFITS MANAGEMENT
•The need to align the management of change with corporate performance management across the organisation
BENEFITS MANAGEMENT
• All organisations undertake performance management at a corporate level whether through monthly management accounts, performance reports or other measures.
BENEFITS MANAGEMENT
BENEFITS MANAGEMENT
•Public Service Agreements detail the aims and objectives of UK government departments over a three-year period.
BENEFITS MANAGEMENT
•Such agreements also describe how targets will be achieved and how performance against these targets will be measured.
BENEFITS MANAGEMENT
• In the recent APM national survey, 60% of respondents indicated that their organisation had a standard set of key performance indicators to measure corporate business performance.
BENEFITS MANAGEMENT
• However the same survey revealed that only 12% of respondents used a software application to support management information on benefits.• This implies a lack of maturity in the
software market for benefits management.
This strategy will consist of above elements:
Benefits Identification
Benefits Profiling
Benefits Planning
BENEFITS MANAGEMENT
Benefits/Dis-benefits
Quantifiableimprovement
Measurable improvement
Benefits Management
Initialization of project
production of pictures
Agreementto continue
Benefits Management
Evidence collection
Review and learning
Developmentof updated
pictures
Productionof pictures
Initializationof project
Agreementto proceed
Review andlearning
Evidencecollection
Systemdevelopmen
t
Developmentof updated
pictures
Future/Maintenance
project
AbandonProject
-Formativereview
- Variance- Determinetrade-offs
- Determination ofbusiness
opportunity- Validatedopportunity
- Determinations ofprimary
stakeholders- Opportunity/solution lexicon
Development of:Business picture,Financial picture,Project picture
Involving primarystakeholders
ABR process (Remenyi & Sherwood-Smith, 1998)
ProductSelectionAppraisal
Initializationof project
Agreementto proceed
Review andlearning
Brainstorming stageEvidencecollection
SystemDevelopment
Developmentof updated
product
Future/Maintenance
project
APPROVED
Formativereview of the
selectedproduct
Start of VE
Determination ofbusiness opportunityValidated opportunity
Determinations ofprimary stakeholders
ETC
Development of BusinessPlan
Financial Feasibility study,Project plan
Involving primarystakeholders
Adoption of Supply chainManagement
Internationalcompetitors
Nationalcompetitors
DISAPPROVED
Benefits Management process (OGC, 2008)
The benefitsmanagement
strategy
The benefitsrealization
plan
BenefitsIdentification
Optimizingthe mix ofbenefits
Reviewing andmaximizing
benefits
Realizing andtrackingbenefits