www.apmg-international.com

APMG-International Webinar

Optimizing Return on Investments Introducing the new Managing Benefits Guidance

Wednesday 2 October 2012 / 14:00

Presented by Steve Jenner, Author & Chief Examiner

www.APMG-International.com

Agenda • Welcome & introduction

– Mark Constable, Communications Co-ordinator, APMG-International

• Managing Benefits Optimizing Return on Investments

– Steve Jenner, Author & Chief Examiner and PPM/Benefits Specialist

• Q&A • More Information • Close

About APMG-International • Global Examination & Accreditation Institute • Official accreditation/qualification body for Cabinet Office

(formerly OGC) PPM portfolio • Full portfolio of professional management qualifications • Accredit ATOs & ACOs (275+) • HQ in UK; Operational offices or formal representation in

11 countries • Over 17,000 examinations sat every month • Full details at www.APMG-International.com

Presenter • Stephen Jenner Mst, MBA, BA (Hons), FCMA, FAPM • Author & Chief Examiner • Portfolio and Benefits Management Professional • Chief Examiner & Co-author of Management of Portfolio (MoP) • Author of several publications in portfolio and benefits management fields

• Extensive experience in managing large and complex portfolios, programmes and projects

• Designed, implemented and operated the CJS IT approach to Portfolio & Benefits Management, recognized internationally

• www.stephenjenner.com / Stephen.Jenner5@btinternet.com

1. Why develop this Guide?

2. What’s the scope of the Guide?

3. What’s the format of the exams?

4. What schedule are we working to?

5. Q&A

Scope of this Briefing

Benefits are not just one dimension of portfolio, programme and project management; rather, they are the rationale for the investment of taxpayers’ and shareholders’ funds in change initiatives.

Why this new Guide?

Existing guidance includes…

“Deficiencies in benefits capture bedevils nearly 50% of government projects” and “30-40% of systems to support business change deliver no benefits whatsoever.” OGC

“Most large capital investments come in late and over budget, never living up to expectations. More than 70% of new manufacturing plants in North America, for example, close within their first decade of operation. Approximately three-quarters of mergers and acquisitions never pay-off…And efforts to enter new markets fare no better”

Lovallo & Kahneman

“The brutal fact is that about 70 per cent of all change initiatives fail.” Beer & Nohria

But the track record isn’t good….

9

And research suggests things aren’t getting better…..

The existing guidance is necessary but not sufficient to overcome 4 key obstacles:

1. The ‘Knowing-Doing’ gap

2. ‘Box ticking’

3. Cognitive Bias

4. Strategic misrepresentation

So ‘Managing Benefits’

The Benefits Management Cycle A Multi-disciplinary practice based on learning & insight from:

• Project & Programme Mgt • Management Accounting • Economics • Behavioural finance • Psychology • Neuroscience • Change Management • Systems thinking

An approach characterised by:

• Key Success Characteristics: Active, Evidence-based, Transparent, Benefits-led, Forward-looking, and Managed across the full business change lifecycle.

• Realism in planning based on benefits-led change initiatives,

within the context of clearly articulated (but often emergent) strategy, consistent portfolio-wide and evidence-based approaches, applied across the business change lifecycle.

• Enthusiasm in delivery based on an active search for value,

on-going participative stakeholder engagement, and managed with a forward-looking perspective, based on transparency, insight, learning and continuous improvement.

With techniques from around the world

BENEFITSPROBLEM SOLUTION

Southbank Arts Precinct Redevelopment (Fictional) Department of Premier and Cabinet

Investment Logic Map

Generate vision for use of arts precinct

over 20 years

Existing facilities will not support Victoria’s continued leadership position in the arts

(60%)

Create a precinct which functions as a distinctive attraction

(40%)

Arts precinct is dislocated and is no longer aligned with the way the city is

developing (40%)

Improve the connection of the arts

precinct with Melbourne and its local community

(20%)

Renew and upgrade existing facilities so

they can meet current and future

needs(40%)

DRIVER EnablingAssetsOBJECTIVE CHANGESBENEFITS

Strengthen enterprise and precinct marketing

Redeveloped Arts Centre

New Sturt Street Ramp

Develop integrated ticketing, security and precinct management

systems

Establish a precinct governance and

management model

Make physical changes to arts

precinct

New CRM - ticketing platform and services

Strengthen the Victorian

community(40%)

Improve Victoria’s industry

(20%)

Enhance Victoria’s arts profile and

reputation (40%)

BENEFITS DEPENDENCY NETWORK

IS/ITEnablers

EnablingChanges

BusinessChanges

BusinessBenefits

InvestmentObjectives

DRIVERS

JW113

And techniques that include… • Driver-based analysis

• Benefits mapping

• The ‘dog that didn’t bark’ test

• Pre-mortems

• Conversion ratios

• Reference class forecasting

• Ethnography

• ‘Booking’ the benefits

• The Delphi technique

• The ‘Scout and beacon’ approach

• Insight via a ‘rich picture’

• Narrative leadership

• Activist accountability, etc

With practical examples from around the world including:

• Bristol City Council

• WiBe® Framework - Germany

• Tetra Pak

• Openreach

• NASA

• Obayashi Corporation - Japan

• Western Australia Police

• Tell Us Once

Fundamentally - A benefits-led practice Strategic Drivers

Investment Objectives

Increased competitive environment

Intermediate Benefits

Practices

Maximised Value for

Money from available funds

End Benefits

Benefits Logic Map – Benefits Management

Emergent benefits realization optimized

Benefits realization sustained for

longer

Consistent practices

Clear of line sight from change initiatives to

strategic objectives

Minimized impact of dis-benefits

Efficiency savings in management of

initiatives

More engaged stakeholders

Reduced nugatory benefits

management activity

Benefits realized re-cycled to fund

new initiatives

Continuous improvement

Financial & economic constraints

Funding & regulatory body

expectations

Inability to demonstrate

return on investment

Optimized Strategic

Contribution

Fit for purpose,end-2-endpractices applied

consistently

Earlier realization of planned

benefits

Improved organizational

reputation

Increased realization of

planned benefits

Principles

Align benefits with strategy

Start with the end in mind

Utilize successful delivery methods

Apply effective governance

Develop a Value Culture

Identify & Quantify

Value & Appraise

Plan

Realize

Review

More accurate forecasts

Improved Portfolio Prioritization

Integrate benefits & performance mgt

Portfolio-based benefits

management

Thanks to the Review Group:

• Rod Baker APM Group Director • Best Management Practice • Michael Acaster Cabinet Office, Efficiency Reform Group • Michael Dallas MoV Lead author & Chief Examiner • Craig Kilford MoP Co-author and P3O Lead Reviewer/Mentor • Keith Williams P3M3 & ‘Change Management’ Chief Examiner • Benefits Management Practitioners • Peter Glynne Co-chair, APM Benefits Management Specific Interest Group • Sarah Harries Head of Business Improvement, BT • Steve Parker (Interim) Value & Benefits Lead, TfL PMO Centre of Excellence • John Thorp International benefits management thought-leader • Accredited Training Organizations/APMG assessors/ACOs • Jeroen Geurtsen European ATO representative • Mark Ives Australian ACO representative • Paulo Keglevich South American APMG assessor • Patrick Mayfield Part MSP author & UK ATO representative

Progress to date & the next steps • Guide published – Now! • Executive Guide - Christmas • Webinars – Europe (Oct 3rd); Australia/NZ (Oct 18th); US

(tbc) • Showcases – London, Brisbane and Frankfurt • APM Branch/SIG events – Oct 2nd, Nov 12th, Nov 22nd • Managing Benefits Repository - soon • Train the trainer events completed – Amsterdam,

London, Brisbane • Foundation exams – Late September • Practitioner exams – February 2013

More Information

• APMG-International website: – www.APMG-International.com

• Community of Interest: – http://www.linkedin.com/groups/Managing-Benefits-Community-Interest-4493501

• Stephen Jenner – Stephen.jenner5@btinternet.com – www.stephenjenner.com

www.apmg-international.com

Find out more about us at our website: www.APMG-International.com

THANK YOU FOR ATTENDING