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BCS – North London Branch. Benefits Realisation Management. Ensuring IT and change adds value and delivers planned business benefits. Gerald Bradley Ann Watts 19 th March 2007. Achieving the expected or potential benefits is not the norm. OASIG Survey Results: - PowerPoint PPT Presentation
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© Sigma (Bookham) Ltd1
Benefits Realisation Management
Gerald BradleyAnn Watts
19th March 2007
BCS – North London Branch
Ensuring IT and change adds value and delivers planned business benefits
© Sigma (Bookham) Ltd2
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
sm260
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
sigma’s View:
• Most companies achieve between 10% and 25% of potential benefits from their IT Investments and change programmes
Achieving the expected or potential benefits is not the norm
© Sigma (Bookham) Ltd3
• 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
Who are we (sigma)?
© Sigma (Bookham) Ltd4
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
Oil and Gas
• BP
• Canadian Natural Resources Limited
• Shell
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
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
© Sigma (Bookham) Ltd5
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
© Sigma (Bookham) Ltd6
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
© Sigma (Bookham) Ltd7
Purpose: To improve the ROI from change
Fewer wastedinvestments
Earlierbenefits
Morebenefits
Return
Time
Sustainedbenefits
What is success? - the purpose of programmes/projects
© Sigma (Bookham) Ltd8
Justifying
In UK until 1990
To justify?
Justification
Measuring
Emphasis shift
To measure?
Justification
Measurement
In UK in the
1990s
To harvest?
In UK in the new
millennium
Harvesting
Achievement
Measurement
Justification
Why consider benefits?
© Sigma (Bookham) Ltd9
EnablersBusiness ChangeBRM
External Drivers
Stakeholders Cultural Factors
Benefits
Objectives
Process:Focus on the real goal - Objectives & Benefits
As is
Can be
© Sigma (Bookham) Ltd10
Corporate or Programme Objectives
To increase effectiveness
To Improve deployment
To speed up responses
To reduce costs
The bridges may consist of
processes or changes or
intermediate benefits
Bridging between enablers and objectives
Projects delivering Capabilities
© Sigma (Bookham) Ltd11
Business change activities
Project(s)
Projects delivering Capabilities
Corporate or Programme Objectives
To increase effectiveness
To Improve deployment
To speed up responses
To reduce costs
VisionEnd Goal
Business Case
Benefit Realisation Plan
Programme level work streams
Business change activities
Project(s)
Drivers
Centralised delivery Business unit delivery
Top level control
EnablersEnablers EnablingChangesEnablingChanges
IntermediateBenefits
IntermediateBenefits
BusinessChangesBusinessChanges
EndBenefits
EndBenefits
Building a programme around its benefits
© Sigma (Bookham) Ltd12
To Increase
profit
Business Objective
Benefits
Technology
Feature
Change in Working Practice
Electronic communication
Meetings Management
Co-authoring documents
Captured learning
Interactive working with
Country Mgrs.
Search facilities
Document Management
Information sharing
Electronic discussion
Shared‘best
practices’
Increased efficiency
Increased effectiveness
Increasedsales
Increasedmargin
Reducedcosts
Improved performance of Country Mgrs.
More focused selling
More focused sales force
Faster resolution of pricing
issues
Cross-fertilisation between Countries
Maximisedlaunchimpact
Improvedpricing
Improved launch
planning
Improvedsuccession
planning
An example of a ‘bridge’ which distinguishes between Features, Changes and Benefits
© Sigma (Bookham) Ltd13
Strategy
Delivery
Change Process with Review Points
1. Set vision
and objectives
2. Identify
benefits and changes
3. Define
initiatives
4. Optimiseinitiatives
5. Manage
initiatives
6. Manage
performance
R6
R5
R4 R3
R2
R1
Engage stakeholders
© Sigma (Bookham) Ltd14
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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Use drivers to determine objectives for the change
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© Sigma (Bookham) Ltd15
Confirming Programme Objectives
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 increase awareness and
understanding of benefit realisation
issues
To maximisebenefit delivery
from eachprogramme
To improve project
prioritisationand selection
To introduce a standard Benefit
ManagementMethodology
To produce better
quality businesscases
To improve stakeholder management
To improve businessstrategy
To change to a more benefit
focused culture
To improvebenefit trackingand reporting
To increase shareholder
value
© Sigma (Bookham) Ltd16
Confirming Programme ObjectivesFor 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 increase awareness and
understanding of benefit realisation
issues
To maximisebenefit delivery
from eachprogramme
To improve project
prioritisationand selection
To introduce a standard Benefit
ManagementMethodology
To produce better
quality businesscases
To improve stakeholder management
To improve businessstrategy
To change to a more benefit
focused culture
To improvebenefit trackingand reporting
To increase shareholder
value
© Sigma (Bookham) Ltd17
Creating a Benefits Map for each of the bounding objectives
To improve project
prioritisation and selection
3. Improvedawarenessof options
1. Improvedunderstanding
of requirements
2. Improvedmanagement of
investment process
© Sigma (Bookham) Ltd18
3. Improvedawarenessof options
1. Improvedunderstanding
of requirements
2. Improvedmanagement of
investment process
Hope this works tom morrow
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Hope this works tom morrow
Hope this works tom morrow
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Hope this works tom morrow
Hope this works tom morrow
Hope this works tom morrow
Hope this works tom morrow
Hope this works tom morrow
Hope this works tom morrow
Hope this works tom morrow
Hope this works tom morrow
Hope this works tom morrow
Hope this works tom morrow
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Hope this works tom morrow
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Hope this works tom morrow
Hope this works tom morrow
Hope this works tom morrow
Hope this works tom morrow
Creating the Benefit Dependency Map from the Benefits Map
To improve project
prioritisation and selection
© Sigma (Bookham) Ltd19
To reduce the number of crimes
Fewer crimes by re-offenders
Fewer crimes by first time
criminals
Creating a Benefits Map starts with the identification of ‘end benefits’ which equate to the objective
© Sigma (Bookham) Ltd20
To reduce the number of crimes
Fewer crimes by re-offenders
Fewer crimes by first time
criminals
Less propensity to commit crime
Less opportunity to commit crime
Increased deterrent to
commit crime
Continuing the development of the Benefits Map
© Sigma (Bookham) Ltd21
Completing the Benefits Map
To reduce the number of crimes
Fewer crimes by re-offenders
Fewer crimes by first time
criminals
Less propensity to commit crime
Less opportunity to commit crime
Reduced criminogenics
Fewer drug users
Improved personal crime
prevention
Improved community
crime prevention
Increased deterrent to
commit crime
Better offender management
Increased police
presence on streets
Increased clear-up rates of targetted
crimes
Improved detection
Improved vocational training in
prisons
Improved awareness of crime issues
Lighter streets
More community crime prevention
initiatives
Improved law enforcement
resource usage
Increased effectiveness in fighting crime
Greater awareness of drug issues amongst the community
Improved scheduling of
police
Less bureaucracy in
police
Improved skills
Greater collaboration between local
agencies
Less drug availability
© Sigma (Bookham) Ltd23
To reduce the number of crimes
Fewer crimes by re-offenders
Fewer crimes by first time
criminals
Less propensity to commit crime
Less opportunity to commit crime
Reduced criminogenics
Fewer drug users
Improved personal crime
prevention
Improved community
crime prevention
Increased deterrent to
commit crime
Better offender management
Increased police
presence on streets
Increased clear-up rates of targetted
crimes
Improved detection
Improved vocational training in
prisons
Improved awareness of crime issues
Lighter streets
More community crime prevention
initiatives
Improved law enforcement
resource usage
Increased effectiveness in fighting crime
Greater awareness of drug issues amongst the community
Improved scheduling of
police
Less bureaucracy in
police
Improved skills
Greater collaboration between local
agencies
Less drug availability
65%
35%
50%
20%
50%
25%
40%
15%
35%
30%
25%
70%
30%
20%
80%
60%
60%
25%
20%
30%
45%
30%
20%
100%
50%
100%
100%
50%
40%
45%
35%
25%30%
50%
40%
A weighted Benefits Map
© Sigma (Bookham) Ltd24
101 Cross border communications
National IT System
Focus resources on higher value
activities
MI on hot spots
Case & Custody
More street lighting
Community Education
Programme
Vocational Programmes
Co-ordintate agenecies (incl.
voluntary)
"Meet the victim" scheme
Review scheduling practices
Media campaigns
Prompt replacement of
bulbs
Crime Prevention Officer meetings
Recruit and train specials
Implement vocational progs.
Drug treatment progs.
O5 To reduce the number of crimes
Fewer re-offenders
Fewer first time criminals
Less propensity to commit crime
Less opportunity to commit crime
Reduced criminogenics
Fewer drug users
Improved personal crime
prevention
Improved community crime
prevention
Increased deterrent to
commit crime
Better offender
management
Increased police presence on
streets
Increased clear-up rates of
targetted crimes
Improved detection
Improved vocational
training in prisons
Improved awareness of crime issues
Lighter streets
More community crime prevention
initiatives
Improved law enforcement
resource usage
Increased effectiveness in fighting crime
Greater awareness of drug issues amongst the
community
Improved scheduling of
police
Less bureaucracy
in police
Improved skills
Greater collaboration between local agencies
Less drug availability
65%
35%
50%
20%
50%
25%
40%
15%
20%
30%
25%
70%
30%
20%
80%
60%
60%
25%
20%
30%
45%
30%
20%
100%
50%
100%
100%
50%
40%
45%
35%
25%
30%
50%
Survey offenders
NOMS System
ObjectiveBenefit
EnablerBusiness Change
A Benefit Dependency Map (BDM) with weighted paths
© Sigma (Bookham) Ltd25
Key
101 Cross border
communications
National IT System
Focus resources on higher value
activities
MI on hot spots
Case & Custody
More street lighting
Community Education
Programme
Vocational Programmes
Co-ordintate agenecies (incl.
voluntary)
"Meet the victim" scheme
Review scheduling practices
Media campaigns
Prompt replacement of
bulbs
Crime Prevention Officer meetings
Recruit and train specials
Implement vocational
progs.
Drug treatment progs.
1,000
05 To reduce crime
650
Fewer re-offenders
350
Fewer CJ first time criminals
500
Less propensity to commit crime
232
Less opportunity to commit crime
350
Reduced criminogenics
150
Fewer drug users
46
Improved personal crime
prevention
186
Improved community crime
prevention
267
Increased deterrent to
commit crime
203
Better offender
management
107
Increased police presence on
streets
40
Increased clear-up rates of
targetted crimes
53
Improved detection
118
Improved vocational training
in prisons
28
Improved awareness of crime issues
37
Lighter streets
112
More community crime prevention
initiatives
153
Improved law enforcement
resource usage
93
Increased effectiveness in fighting crime
42
Greater awareness of drug issues amongst
the community
69
Improved scheduling of
police
61
Less bureaucracy
in police
46
Improved skills
32
Greater collaboration between local
agencies
75
Less drug availability
65%
35%
50%
20%
50%
25%
40%
15%
20%
30%
25%
70%
30%
20%
80%
60%
60%
25%
20%
30%
45%
30%
20%
100%
50%
100%
100%
50%
40%
45%
35%
25%
30%
50%
Survey offenders
NOMS System
0
Objective
0
Benefit
0
Enabler
0
Business Change
A Benefit Dependency Map (BDM) with weighted paths and scores
© Sigma (Bookham) Ltd26
Benefit Classification
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 (Bookham) Ltd27
Key benefits and disbenefits by
stakeholder Ex
ecu
tive
Ma
na
ge
me
nt
Bu
sin
ess
Ma
na
ge
me
nt
Bu
sin
ess
Use
rs
IS F
un
cti
on
Pro
gra
mm
e T
ea
m
Fin
an
ce
Fu
ncti
on
Key Benefits More effective project portfolio
Earlier recognition of ineffective projects
More financial benefits realised
More non-financial benefits realised
Improved management of risk
Reduced IS/IT costs
Improved image of IS/IT
Key disbenefitsExtra effort by business
Slower start to programme
IS Project Targets threatened
A Programme to roll-out BM within an organisation
© Sigma (Bookham) Ltd28
Value type DefinitionExample
Financial Non-financial
Tangible
Definite
Expected
Logical
Intangible
Increased sales
Quicker performance of tasks
Improved management of insurance risk
Greater customer satisfaction
Reduced costsFewer steps in a process
Improved image
sigma value types
Value may be predicted on the basis of someone else’s experience or based on historic trends
Logically a benefit may be anticipated whose value may be measured but not predicted
May be anticipated, but difficult to substantiate
Value may be predicted with confidence or certainty – not effected by external drivers
© Sigma (Bookham) Ltd29
1. Fewer steps in a process
3. Improved productivity
5. More coffee breaks
6. Shorter working day
4. More time spent with customers
7. Fewer staff
10. Improved staff morale
11. Reduced salary costs
8. Increased sales revenue
9. Improved networking
2. Faster response to customers
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 Benefits 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.
© Sigma (Bookham) Ltd31
Case Example Major Bank
Improved image
Customer database and
sales processing system
Fewer errors
Easier sales
processing
Fewer complaints
Increased productivity
Better information on customers and sales
profitability
Improved customer service
Improved staff
morale
More high value
customers
More quality time with
customers
More focused selling
More highvalue sales
Less unpaid
overtime
Benefit linkage chart for the whole investment
© Sigma (Bookham) Ltd32
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
© Sigma (Bookham) Ltd33
Predictive model
Value of the
measure
TimeT1 T2 T3 T4
Don’t try and be more sophisticated than this in your predictions and use months (or preferably quarters) as your minimum time interval
Baseline
Baseline
Target
Target
M1
M2
© Sigma (Bookham) Ltd34
Tracking the benefits
MeasureBaseline
valueStart
PeriodEnd
PeriodTarget value
Period 1 Period 2 Period 3 Period 4
No. of errors per 100 sales 7.5 1 3 2
No. of written complaints per week 9 2 4 2
No. of phone complaints per week 2 4 5
Customer service rating (%) 55 3 6 80
No. of sales processed pp phr 8.5 2 4 12
Value of sales processed pp phr £480 2 4 £750
Total overtime worked per week (hr) 85 2 4 15
Staff morale rating (%) 68 3 6 80
Time spent with customers (hr/wk) 45 3 6 100
No. of new HV customers/period 3 4 7 10
No. of HV Customers lost/period 5 4 7 2
Lead conversion rate (%) 27 4 8 40
Value of HV Sales/period £300,000 4 9 £1m
© Sigma (Bookham) Ltd35
Case Example Major Bank
Improved image
Customer database and
sales processing system
Fewer errors
Easier sales
processing
Fewer complaints
Increased productivity
Better information on customers and sales
profitability
Improved customer service
Improved staff
morale
More high value
customers
More quality time with
customers
More focused selling
More highvalue sales
Less unpaid
overtime
Software supports RAG Status(including on Benefit Linkage Charts)
© Sigma (Bookham) Ltd36
Obtaining further help
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.
© Sigma (Bookham) Ltd37
Complete toolkit:
Methodology A consistent, comprehensive, flexible and scaleable processA circular process which can be entered at any pointA proven process tested in many different environmentsA bag of many different techniques to suit a wide variety of situations
Education Education to change mindsetWar stories from a diverse variety of organisations
Consultancy To embed the approach in the behaviours and culture of the organisationWorkshop facilitation to engage stakeholders and secure commitmentPartnership consultancy to transfer skills through whole life-cycleTo 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
© Sigma (Bookham) Ltd38
Some good news
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
© Sigma (Bookham) Ltd39
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