benefits focused portfolio management - beyond project delivery!

Matt Williams PMP MAIPM

Managing Director

Connexion Systems

Benefits-focused Portfolio Management:

beyond project delivery

Transforming project outcomesInto stakeholder value

About Connexion Systems

Connexion Systems knowledge areas:

• Benefits Realisation Management

• Project Portfolio Management

• Project Investment Management

• Best Practices (PRINCE2, MSP, P3O)

• Project Controls (Schedule, Earned Value)

Enterprise Systems = People + Process + Tools


Some of our Customers


What is the problem?

• Major improvement in the maturity of

project delivery

PRINCE2, PMBoK

Project Risk Mgmt (AS4360)

• But project ‘success’ rates are not

improving: (Standish)


“A measurable improvement resulting from an outcome perceived as an advantage by one or more stakeholders”.

-UK Government Cabinet Office

“A business outcome that delivers value to the organisation.”

-NSW Department of Finance & Services

Benefits defined


“The identification, definition, tracking, realisation and optimisation of benefits at initiative

and portfolio level.”

- Steve Jenner, Managing Benefits (APMG)

Benefits Management defined


Why Now?

• Benefits Realisation is not a new idea

• So why is there so much interest right now?

Uncertain economic times

Shrinking Budgets

Demanding Customers

Globalisation

• Mean we need to get it right the first time


The Objective

• Select the right projects

that contribute to strategic objectives

that deliver the necessary change to the organisation

• Create accurate, validated business cases

• Maximise return on capital investment

Track and report on the benefits being realised

during and post execution


What is the Problem?

Traditional approach is:

Define the business case,

Get approval and funding,

Hand over to the project delivery team

Monitor progress

Receive the finished product/output


Problem 1- Responsibility

Either:

a) the project/programme is made responsible for

benefit realisation, or

b) No-one is!

Project/Programme managers are focussed

on delivery, not business benefits

Time/Cost/Quality are their measures of success


Project Handover Process

Project Benefits


Problem 2 - Visibility

• The link between project outputs,

capabilities, outcomes, benefits and goals

is often unclear or poorly defined

• This means we lack early-warning

indicators of missed goals and outcomes


Problem 3 - Validation

No processes or systems in place to

validate benefit estimates (assurance)

This can lead to optimistic estimates

Double-counting can occur

Need to validate assumptions during execution

Complex models without appropriate supporting

processes and tools can lead to errors


BenefitsProject

Benefits

Benefits

Benefits

Benefits

Project

Project

Project

Project

Optimistic Estimates example


Project

Project

ProjectAssumption

Goal

Capability

Business Change

Benefits

Double counting example


Complex Model example

Complex to build, impossible to maintain

– a calculation sheet for a single benefits can

have up to 5-deep linked files and be spread

across multiple sheets within the files.

Addressing the issues

- the more complex the model is to maintain the

less integrity there is around with the numbers

overtime and the less accountability and

ownerships it will have. Add on top the

inefficiency of management it on an ongoing

basis.


Benefits-focused Approach

• Many organisations only perform the first step

• Need to follow a defined lifecycle, that includes the whole Benefits Realisation team

• Strong governance with clear accountabilities and a defined framework


Benefits Identify Plan Realise Evaluate Payback

Programme Definition Delivery

Project Initiation Delivery

Benefits-focused Approach


Step 1 – Identify

• Ideally, this should occur before the establishment of an

initiative, not after.

• First, identify the stakeholders

• Then, identify the intended benefits and their ownership

• This encourages a collaborative approach to Benefits

Identification, and attains buy-in from all parties


Step 1 – Identify

• Three Column Analysis technique involves asking 3 simple

questions, and using the answers to graphically develop a

benefits pathway in one page.

• Represents how current business problems can be

addressed to achieve the desired benefits.


Step 2 - Plan

• Benefit Maps are a ‘road map’ to support understanding and

management of the complexity inherent in the benefits

realisation process.

• A Benefit Map is normally created from Right to Left

(Starting with the end in mind).

• The Benefits identified in this map become the

measurement points for tracking benefits realisation.


Step 2 - Plan

• If a benefit is “a measurable improvement resulting from an

outcome perceived as an advantage by one or more

stakeholders”,

• Then the ability to measure these improvements is essential

in order to quantify the benefits achieved.

• A Benefit Profile allows us to set a time-phased target

benefit value, against which we can track the improvement

over time.


Benefit Profile


Step 3 - Realise• Take measurements at pre-defined intervals Responsibility can be assigned to appropriate

person (eg in HR, Payroll, IT etc)

• Automate where possible Semi-automated - Notifications (email, dasboard etc)

Fully-automated – Integrate with source systems


Step 4 - Evaluate

3 key activities for evaluating outcomes/benefits:

1. Compare and Verify

2. Report the Results

3. Take Corrective Action where necessary


Step 4 - Evaluate

• Monitoring, reporting and escalation of actual vs. targeted

performance is supported by the benefits reporting function.

• It provides realisation progress and informs corrective actions

required.

• A continuous process that commences as soon as business change

starts to be delivered.

• In the post implementation phase, reporting should continue beyond

program closure.


Conclusion

A Benefits-focused Portfolio Management approach

leads to more successful outcomes by:

1. Assigning responsibility for realisation to those

who can make it happen (the business)

2. Defines visibility of the link between project

outputs, outcomes and business objectives

3. Validation of the estimates and assumptions

made, using a consistent, repeatable and

verifiable process


Remember

• … to get the best benefits from application

investments,

• The first step is actually trying to measure the

results.

• Only 37% of companies actually measured

their business cases at least once after go-

live.

Bill Swanton, Gartner 2011

Matt Williams PMP, MAIPM

Managing Director

Connexion Systems Pty Ltd

E: [email protected]

M: +61 414 847 040

www.connexion.com.au

QUESTIONS?

mailto:[email protected]

http://www.connexion.com.au/