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Richard Pharro (CEO APMG) on ‘Agile Business Cases’. Richard is boss of one of the largest project management certification bodies in the world. The new ‘Better Business Cases’ qualification aims to reduce the risk of project failure.
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Better Business Cases
Richard PharroCEO
IP Acknowledgements
• APMG™ and APM Group™ are trade marks of the APM Group Ltd.• The APMG, APM Group and Swirl Device logos are a trade marks
of The APM Group Limited.• Any third party copyright or other intellectual property rights
subsisting in this presentation, including without limitation any text, images, graphics, trade marks, etc. are owned by the third-party providers concerned and any use of said third party intellectual property rights is intended for reference purposes only.
“© The APM Group Ltd. 2014. All rights reserved.”
• Established in 1993• Accredited by UKAS in 2000• 2012 Queen’s Award for Enterprise for our
international activities• Awarded IIP Gold in 2010 and again in
2013 • Administer Certification and Accreditation
Schemes
About APM Group
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Our Partners
IPMA
NHS Health Informatics
World Bank Group
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Project Outcomes
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Why can’t all projects succeed?
“© The APM Group Ltd. 2014. All rights reserved.”
German Projects• Inpol-neu: a system for the federal and state police
failed causing 75 Mio € damage.Secretary of the Interior (BMI)
• Fiscus: an application for the tax authorities failed causing 125 Mio € damageSecretary of Finance (BMF)
• Maut: a road charge application for federal highways (“Autobahnen”). A loss of billions of revenue in the first years of operationSecretary of Traffic (BMVBS)
Source: PRINCE2® In the Public Service and The Government of the Federal Republic of Germany. Status Report. April 2012. By Wolfgang Ksoll.
PRINCE2® is a Registered Trade Mark of Axelos
“© The APM Group Ltd. 2014. All rights reserved.”
“KPMG survey of Project Management practices in New Zealand finds some truly startling results;
Survey shows an incredible 70% of organizations have suffered at least one project failure in the prior 12 months!
50% of respondents also indicated that their project failed to consistently achieve what they set out to achieve!”
Source : KPMG (New Zealand)Type of survey : Survey of 100 businesses across a broad cross section of industries
Date : Dec 2010
New Zealand Projects
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US Projects
1. United States Government Accountability Office. Report to congressional committees. Defence Acquisitions – Assessments of Selected Weapon Programs. March 2008.
“Only 30% of our projects and programs are successful”1
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UK Projects
“Study of government projects reveals $4billion in wasted efforts as a result of failed projects.
‘Only 30% of our projects and programs are successful’ - Joe Harley, programme and systems delivery officer at the Department for Work and Pensions.”
Source : Guardian Newspaper (UK)Scope : Investigation into government waste in the UK since year 2000
Date : 5 Jan 2008
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Cyber Space Projects
“A study of 5,400 large scale IT projects (projects with initial budgets greater than $15M) finds that the well known problems with IT Project Management are persisting. Among the key findings quoted from the report:
– 17 percent of large IT projects go so badly that they can threaten the very existence of the company
– On average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted”
Source : McKinsey & Company in conjunction with the University of OxfordType of survey : Study on large scale IT Projects
Date : 2012
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‘Troubled projects’ = disappointing outcomes
Research suggests that commercial issues are the
primary cause in
~70% of ‘troubled projects’…
….and the likelihood of significant innovation or
incremental value
reduced by
≥ 60%
© IACCM 2013
© IACCM 2013
Major causes and frequency of losses
An urgent need for improvement
© IACCM 2013
Only 11% feel that their organization is well equipped for the future;
89% believe that their contract management processes and management must improve.
Observed disadvantages from lack of process ownership
• Longer lead times • Less flexible
• Lower level of automation • Poor management visibility into contract performance
• Increased risk of unauthorised commitments • Delayed take up of contract models / terms
• High personnel turnover • Poor decision making
• Perception of being difficult in the market • Reduced customer / vendor loyalty
Conclusion
We probably have a problem that current practices haven't solved in the last 50 years?
Can Agile and Better Business Cases help?
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Why are Business Cases important?
A business case provides decision makers and the public as well as the private sector with a management tool for transparent, evidence-based decision making.
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The Five Case Model (from HM Treasury)
A framework for ‘thinking’ to help answer three basic questions
‘where are we now?’,
‘where do we want to be?’ and
‘how are we going to get there?’
A step by step guide to developing a business case by:
•Establishing a clear need for intervention - the case for change.•Setting clear objectives – desired outcome•Considering a wide range of potential solutions - an optimal balance
of benefits, cost and risk.•Putting the arrangements in place to successfully deliver the proposal. Successful execution
“© The APM Group Ltd. 2014. All rights reserved.”
The process is about
thinking not writing
The process is about
thinking not writing
Management
The 5 key elements of good practice business cases
The Five Case Model
Financial Commercial
Economic
Strategic
Applicable - strategic fit & business needs
Appropriate – optimises public value
Attractive – to supply side and feasible
Affordable – within budget
Achievable – can be successfully delivered
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Three Types of Business Case
1. The key purpose of Strategic Outline Case is to:– establish the strategic context for the spending proposal; – evidence the case for change; – establish the preferred way forward
2. The key purpose of the Outline Business Case is to: – revisit the SOC assumptions and main findings – establish the preferred option – put in place the arrangements for the procurement of the scheme
3. The key purpose of the Full Business Case is to: – revisit OBC assumptions and main finding; – evidence that the most economically advantageous tender (MEAT) for
the scheme has been accepted; – establish that the management arrangements for successful delivery are
in place.
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The suggested process (use with care)
Workshop Objectives Key participants Outputs
Workshop 1: • To define and agree business needs, potential scope and
• Senior Responsible Owner;
• SMART spending objectives;
Determining the spending objectives; • Board members; • Business needs andcase for change and • To define and agree desired • Programme director; potential scope;options for service outcomes and service outputs; • Project manager; • CSFs and benefitsdelivery • To define and agree the CSFs and • External stakeholders or criteria;
benefit criteria for assessing the commissioners; • Long list of options;(SOC Stage) options; • Customer and/or user • Fundamentals of the
• To identify the potential options for service delivery. •
representatives; Technical adviser;
SOC.
• Financial adviser; • Facilitator.
Workshop 2: • To sift the long list and generate the short list;
• External stakeholders or commissioners;
• Short-listed options with preliminary assessment;
Assessing the • To identify and assess the • Director of finance; • Outline benefitsoptions potential costs, benefits and risks • Economic adviser; realisation plan;
associated with the short-listed • Customer and/or user • Inputs for economic(SOC/OBC stage) options. representatives; appraisal.
• Project manager; • Facilitator.
“© The APM Group Ltd. 2014. All rights reserved.”
Workshop Objectives Key participants OutputsWorkshop 3:
• To develop the PSC; •External stakeholders or • Preliminary PSC with
Developing the • To address all relevant issues, including risks, affordability and •
commissioners;Director of finance; •
indicative costs; Fundamentals of the
reference project/ implementation. • Economic adviser; economic and financialoutline PSC • Customer and/or user
representatives; cases.
(OBC stage) • Project manager; • Facilitator.
Workshop 4: •To develop the service specification;
•External stakeholders or commissioners;
•Preliminary riskallocation matrix (RAM);
Developing the deal • To develop the apportionment of • Director of finance; • Potential deal; risk and underpinning payment • Economic adviser; • Fundamentals of the(OBC stage) • mechanisms;
To develop the proposed contract.
• Customer and/or user representatives;
commercial case.
• Project manager; • Facilitator.
Workshop 5:• To develop the procurement •
External stakeholders or • Procurement strategy;
strategy; commissioners; • Management andSuccessful delivery • To develop the project plan; • Director of finance; delivery arrangements;arrangements • To develop supporting strategies • Economic adviser; • Post project evaluation
(OBC stage) (for change management and
contract management etc).• Customer and/or user. arrangements.
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The suggested process (cont…)
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Sources of help
Publications
• Get your copy. The five case model is freely available via: http://wales.gov.uk/funding/wiipindex/5cmodel/?status=close.d&lang=en
• Currently no plans to make the model available in hard copy format
• Guidance consolidates other reference sources and is consistent with HM Treasury’s “Green Book Guidance on Appraisal of Policies, Programmes and Projects” – UK Government’s central guidance for appraisal and evaluation of all policies, programmes and projects (available at http://www.hm-treasury.gov.uk/data_greenbook_index.htm).
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BBC Training Companies
Approved•Cupe Projects Ltd•Demos•Eleisha Training Ltd•Explosive Learning Solutions•Harry Baker Professionals Ltd•Inspiring projects •PA Consulting•PearceMayfield•QRP Management Methods•The Knowledge Academy
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For more information go to:-http://www.apmg-international.com/en/qualifications/better-business-cases/better-business-cases.aspx
Pending Accreditation•Bizness Academie SAS•CC Learning•Deloitte MCS Limited•E-quality Italia•Pink Elephant UK•Raj Khanna Associates Ltd•Snap Tech (Pty) Ltd•Training ByteSize Ltd
Courses and Qualifications
• Foundation Course and Exam– Classroom course 2 days followed by closed book exam– Closed book, multiple choice, 50 questions– 50% pass mark 40 minutes duration
• Practitioner Course and Exam– Classroom course 3 days followed by an exam on day 3– Open book exam– 4 questions per paper, with 20 marks available per question– 50% pass mark 2 ½ hours duration
• Reviewer Course – Under development/discussion
BenefitsFor Organizations:-•Reduction in unnecessary spending and consultancy costs.•A process and guidance designed to optimize value from change initiatives.•A clear, proportionate approval process and improved, more informed decision making.•Complements existing best practice•Short courses minimize disruption to business as usual.
For Individuals:-•Improved understanding of the Better Business Cases process, relevant not only to those producing business cases and spending proposals, but also those reviewing.•Understanding of an established and proven methodology which can be applied at both strategic (macro) and tactical (micro) levels.•Recognized certification for a core business competency for so many in mid and senior management roles.
Conclusion
Better Business Cases lead to:• better decisions• better investments• achievement of better outcomes.
It is about the thinking not the writing
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A final thought
$45 billion a year spent by NGOs. “© The APM Group Ltd. 2014. All rights reserved.”
Any questions
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“© The APM Group Ltd. 2014. All rights reserved.”