White Paper Realising benefits: How to plan for success

Transcription

1 Realising benefits: How to plan for success UK Government departments are currently facing significant challenges prioritising their initiatives effectively under increased resource constraints. Robust benefits management is a recognised technique for achieving value and sustainable change, but there are many hurdles to overcome. An integrated approach to benefits realisation, based on the principles of systems thinking, gives increased certainty that benefits are achievable and realistic, makes change techniques effective in complex situations and facilitates robust investment decisions

2 Realising benefits: How to plan for success The investment challenge Government departments in the UK are currently facing significant challenges in ensuring that departmental initiatives are prioritised effectively to deliver public services under increased resource constraints. Robust benefits management is a recognised technique for identifying and realising the value of lasting changes but, as demonstrated by past failures to achieve desired impacts, there are many hurdles to overcome before success can be demonstrated. Benefits realisation cannot be considered in isolation. It is one facet of an overall approach to change, and one perspective for considering the change environment. Because of the increasing constraints and levels of interdependency around many government initiatives, an integrated approach to benefits realisation is needed that makes portfolio, programme and project management techniques effective in complex situations an approach based on the principles of systems thinking. By taking an integrated systems approach, organisations can make robust investment decisions based on an increased certainty that benefits are achievable and realistic. Past examples of a systems based approach have provided a foundation for robust investment decisions at the portfolio level, a clear focus for delivering lasting change, confirmation of the effectiveness of that change and an integrated framework visible to stakeholders. The future challenge On 21st July 2015 HM Treasury launched the start of the 2015 Spending Review. This included an invitation to government departments to submit plans on how they would reduce their resource budgets within two scenarios of savings of 25% and 40% by Within this context the Spending Review 1 will also look to invest in priority areas and deliver changes that achieve better outcomes for citizens To undertake such changes under significant constraints will require robust investment decisions to prioritise change initiatives, as well as the effective execution of those initiatives so that the intended benefits are fully realised and an efficient return on the constrained investment is achieved. Whilst the key factors that increase the likelihood of successful outcomes continue to be highlighted 2, it is recognised that many past programmes have not been successful in defining and delivering the intended benefits. 1 HM Treasury, A country that lives within its means: Spending review 2015, Major Projects Authority, Annual Report , 2015

3 Realising benefits: How to plan for success Why is it so difficult? The rationale for undertaking any change is aimed at achieving the value of the benefits of the change. The Managing Successful Programmes framework highlights this by defining a change programme in terms of delivering outcomes and benefits related to the organization s strategic objectives 3. Benefits management is undertaken throughout the change life cycle, from strategic objectives and portfolio definition through to the transition to new operations - and beyond. It provides the rationale behind categorisation, prioritisation and balancing of portfolios 4, the validity of business cases, the needs of stakeholders, the definition of the phasing of change programmes and final implementation. The realisation of benefits as change is embedded is also the foundation for ex-post monitoring, evaluation and validation 5. As the National Audit Office has indicated 6, there have been recognised issues related to benefits and their management across past public-sector change initiatives. Misrepresentation and over-optimism Benefits can be at risk of being overstated in business cases in order to support specific economic interests or to justify a preferred investment option. This results in an emphasis on identifying benefits rather than managing their realisation 7. Defining the true benefit Over-optimism and attempts to maximise potential returns on investment are also linked to over-extending the benefits map and results chain. Farreaching end benefits can sometimes be claimed where the relationship to direct benefits (those immediately arising as a result of actions) is tenuous. Lack of shared experience and accountability Benefits identification and analysis that is undertaken in isolation, away from stakeholders such as those involved in implementation, will not result in effective, accepted and assured change owned by senior management.

4 It is not possible to compare the total forecast benefits set out in the benefits statement with what was expected at the outset of the National Programme because the Department did not establish a comprehensive baseline. National Audit Office, Review of the final benefits statement for programmes previously managed under the National Programme for IT in the NHS, 2013 Obtaining evidence A 2013 NAO review 8 found shortfalls in the manner in which ex-post evaluation was planned and executed. It recommended that the approach to evaluation should be published before the initiative is commenced, and that complete evaluation information should be published. Complexity Complexity places significant challenges to the identification, management and realisation of benefits. A lack of understanding of the change context, and of the interdependencies between different influences, will result in poorly defined, unrealistic and unachievable benefits being claimed. Facing greater levels of integration Both the NAO 9 and the APM 10 have recognised the increasing levels of integration and co-operation required in change initiatives and meeting spending challenges. The difficulty then arises when the scale of interdependencies or poor integration implementation prevents effective benefits realisation. 3 Axelos Ltd., Managing Successful Programmes, Axelos Ltd., Management of Portfolios, APM, Benefits Management, APM Body of Knowledge. (6th. Ed.) 2012, pp National Audit Office, Overoptimism in government projects, Jenner, Stephen, Benefits realization - building on (un)safe foundations or planning for success? Project Management World Journal. 2012, Vol. 1, 1 8 National Audit Office, Evaluation in government, National Audit Office, Integration across government, HC Historically, the majority of major projects in government have not delivered the anticipated benefits within original time and cost expectations. Factors that contribute to over-optimism Behaviours and incentives Independent challenge and accountability Evidence base Complexity Stakeholders Source: National Audit Office, Over-optimism in government projects, APM Benefits Management Special Interest Group, Pushing the boundaries of change: Benefits realisation across local government, 2013.

5 Realising benefits: How to plan for success Taking a systems approach Providing a flexible framework Benefits management is integral to, and intertwined with, all other aspects of change management. It is therefore one perspective or view of the overall change environment, and cannot be considered in isolation. A robust grasp of benefits requires the understanding of how they relate to strategic objectives, assumptions, investment decisions, stakeholders, external factors, change outcomes, risks and so on. A means of addressing interrelationships and patterns, as well as objects, is provided by taking an approach based on the general principles of systems thinking. This helps to address difficult challenges through consideration of the interconnected nature of the wider environment rather than separate elements. It is as applicable to social interactions and organisations as it has been to engineering and IT applications. A systems approach works in conjunction with portfolio, programme and project management to manage change in complex and uncertain environments. It considers not only the elements and relationships that make up the current and future states, but also the change journey itself and the factors within the immediate and external environment that influence the journey a wider perspective that can be termed the change ecosystem. A fusion of P3M and systems techniques A systems approach provides a flexible framework and discipline that supports all the key elements of P3M whilst creating a single-point-of-truth platform for robust decision making. Using business architecture techniques, systems methodologies and P3M, an appropriate scaleable representation of the change ecosystem can be generated. This can then be interrogated as required to provide the various different perspectives that are needed. This representation is maintained through the life cycle, not only providing a baseline at initialisation, but a firm platform for continued justification of business cases through to final evaluation of organisational performance. Executive governance This approach provides a basis for ensuring that there is a clear and communicable representation of the rationale for change, that the various elements and relationships are assigned accountabilities, and that there is a transparent translation of policy and objectives into specific aims for individual tasks, linked through to benefits.

6 Agility and flexibility to achieve benefits realisation must prevail over rigid methodologies and low-value templates. APM Benefits Management Specific Interest Group, Pushing the boundaries of change: Benefits realisation across local government, 2013 Investment decisions The representation can be used to undertake multi-criteria analysis and decisions across the investment portfolio, including sensitivity analysis and exploring what-if options to understand impacts on the potential return on investment. Up-front definition of how the benefits will be realised and evaluated (and under what circumstances) results in robust and effective business cases. Effective controls In this approach not only does the benefits and realisation planning underpin change programme definition, but the representation provides a basis for clear line of sight controls, reporting and business case tracking. Portfolio definition and delivery The portfolio perspective provides for the definition of value chains, profile and drivers, all related through to benefits. Identification and categorisation is integral to the architectural approach, which in turn supports the analysis needed for prioritisation and balancing. Providing assurance Fundamental to the systems approach is the principle of do the right things, do things right. The approach can focus on threats to benefits and their realisation, incorporate tripwires for changes in the external environment and demonstrate continuing coherency across activities. Evaluating change Using the use-case scenarios which link directly back to the requirements, business cases and objectives, benefit realisation can be confirmed, substantiated and evaluated once the change has been implemented. Economy Policies Voluntary sector Legislation Risks Responsibilities Cultures A systems approach encompasses all the elements and relationships that make up the wider change ecosystem, not just those that define the start and end states. Dependencies Assumptions Current service portfolio Technology People Future digital service portfolio Technology Opportunities Behaviours People Processes Information Processes Information Extend the change boundary Society Private sector Environment Media

7 Realising benefits: How to plan for success The benefits perspective The benefits perspective refers to the views of the change ecosystem that underpin the work of benefits management. Elements such as risks, assumptions, stakeholder parameters, objectives, milestones (and so on) all have relevance to the definition, management and realisation of benefits. Agreeing a common understanding A key value is achieved through the discipline needed to work with all stakeholders to generate the information required within the ecosystem representation and establishing a transparent single-point-of-truth definition that supports all the benefit management products and activities. Profiles, inter-dependencies and chains By defining the relevant information with stakeholders, the representation can then be interrogated to provide views such as individual benefit profiles, overall model hierarchies and specific chains. These are dependent on robust definitions of dependencies, but these will address a source of past benefit realisation failures in not identifying such causal relationships. Categorisation and weighting Relative weighting and relationship strength information is captured and held in the system representation, thus providing the platform for consistent multicriteria decision analysis, option assessment, and prioritisation through the life cycle. An example graphical representation of the benefits perspective: an extended benefits map highlighting the impact of a change in an assumption

8 Cross-programme coordination and mapping of programme interdependencies has been important National Audit Office, The London 2012 Olympic Games and Para-Olympic Games post games review, 2012 Stakeholder analysis Stakeholder analysis and engagement, particularly of beneficiaries or those impacted by dis-benefits, is supported through the initial identification and engagement, the transparent relationship definitions and the ability to assess impacts of decisions across the stakeholder community. Assumption and risk assessments By including the relationships with assumptions and risks, impact assessments and criticality evaluations can be carried out on a consistent basis, as well as aiding the identification of threats Benefits realisation planning and evaluation The benefits perspective gives an integrated platform for realisation planning, as well as determining the ways and means for evaluating the success of the resulting benefits. Doing the right things This approach helps make the most of a constrained environment: A means for effective portfolio balancing and prioritisation A coherent approach to both financial and non-financial benefits supporting investment decisions Benefits-based robust decision making through the change life cycle A consistent and transparent approach using a single point of truth. Supporting robust change The benefits perspective on the change provides: A strong foundation for governance and stakeholder engagement Clear line of sight basis for controls and reporting Improved understanding of the impacts of risk and assumptions on potential benefits Continuing validation of business cases Managing integration A systems approach has at its core a focus on interdependencies: Can identify impacts of other policies, and initiatives, departmental relationships and emergent issues on intended benefits An understanding of complexity drivers Confirming success The approach is a platform for future success: A framework for the verification and validation of benefits A foundation for a robust evidence base Support to ex-post evaluation Knowledge capture and lessons for future use

9 Realising benefits: How to plan for success Delivering value Portfolio optimisation BMT Hi-Q Sigma provided a small team of specialists to support EDF, one of the UK s largest energy companies in making important investment decisions across a portfolio of programmes and projects. Our approach delivered: a stakeholder endorsed system model to capture the complex interactions across the portfolio a systematic, independent and auditable approach to benefits management targeted, evidence-based investment decision making support resulting in recommendations on the value and financial viability of a number of projects across the portfolio This work enabled our client to prioritise their investments and take a conscious strategic decision of alternative action. This resulted in a saving of 30m, reducing pressure on the annual investment portfolio. Past applications for clients of BMT Hi-Q Sigma have achieved: 30m savings in re-prioritisation of investments in a change portfolio; 100m savings in quick win benefits in an enterprise change programme; Visible benefits management to address stakeholder perceptions; Integrated solutions including the overall programme governance and control frameworks, and training of operational change leaders, Integrated benefits BMT HQS has worked with the Ministry of Defence to transform and converge the way key maritime systems are developed and acquired. As part of this work, we delivered: A tailored and pragmatic benefits strategy and plan Benefit profiles with quantifiable measures and targets Integrated benefits mapping at programme and project levels A control framework with reporting processes and formats for benefits accrual Workshops and training to business change leaders to embed good benefits practices Our work put in place a coherent and consistent approach to benefits suited to the enterprise. The programme has already accrued quick win benefits of over 100m with further benefits identified. Pragmatic approaches suited to the client environment.

10 I was impressed with BMT s systematic, evidence based process which quantified the benefits of a complex, interrelated set of projects. This provided clarity thus enabling us to prioritise work more appropriately across the portfolio EDF Programme Manager Managing stakeholder needs BMT Hi-Q Sigma has supported the nuclear decommissioning and dismantling programme for the UK s redundant submarine fleet. Long timescales, various options and key stakeholder interaction pose significant challenges for the programme. A focus on benefits underpinned options analysis as well as tranche definition and individual project specifications. Rolling funding approval strategy aligned with intermediate benefit realisation phasing and planned reductions in uncertainty. Transparent benefits approach shared in consultations and includes public perception and confidence. User and systems requirements incorporated within benefits approach. This work put in place a long-term approach that uses benefits realisation planning to address uncertainty, external influences and inter-dependencies. Benefits realisation phasing in the programme is aligned with government funding approvals, key decision points and fully support stakeholder engagement activities. Consolidating multiple perspectives To date, the work of BMT Hi-Q Sigma has brought together the principles, methods, tools and techniques of portfolio, programme and project management, business and organisational analysis, systems engineering, investment analysis and knowledge transfer to deliver a robust, coherent and integrated approach to benefits management for its clients. As shown by the work we have carried out for our clients, this approach helps to address the challenges faced by many public sector bodies who have to prioritise their efforts to deliver benefits in a constrained environment. Increasing levels of integration across multiple stakeholders exacerbate the barriers to achieving lasting benefits, but a systems approach brings together the multiple perspectives of change and places the focus on achieving the required benefits. Increasing future value BMT Hi-Q Sigma continues to advance its systems approach to benefits in order to generate further value for our clients. We are developing even stronger techniques for integration with organisational and business analysis methods whilst ensuring that our approach remains pragmatic and scaleable for our clients. Our experts in P3M, SE and organisational analysis continue to support the work of professional bodies such as APM and INCOSE UK, with representation on APM Specific Interest Group committees for Benefits Management and Programme Management (amongst others), and support to the joint working group on SE/PM integration.