Implementing Benefits Realization at Farm Credit Canada. Jacob van der Merwe Project Portfolio Manager November 8, 2011

Transcription

1 Implementing Benefits Realization at Farm Credit Canada Jacob van der Merwe Project Portfolio Manager November 8, 2011

2 Learning Objectives Learn how FCC developed its Benefits Realization methodology and process Learn how FCC approached implementation and organizational change management Learn that successfully implementing Benefits Realization is a process as opposed to an event

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4 Agenda Context and Background Methodology and Process Development Implementation and Organizational Change Management Post-implementation Evolution Lessons Learned Questions

5 What is Benefits Realization? The process of formulating the expected benefits of a project, and tracking and reporting the actual benefits delivered

6 Context & Background Project Portfolio Management (PPM) at FCC Strategy Execution Team Role of CPMO Best Practice and Benchmarks

7 Business Drivers Projects deliver value Benefits drive deliverables Improved investment decisions Optimized use of resources Optimized investment outcomes Evidence of project success Clear responsibility & accountability

8 Before Benefits Realization No formal process Scope, cost and schedule performance measure Benefits not factored into performance measures Benefits defined in business case Responsibility for benefits not clear No benefits realization plans Benefits not tracked post-project

9 Today Formal benefits realization process Project performance measured against benefits Responsibilities clearly defined Benefits review plans Projects assessed against benefits Project benefits measured post-project

10 Methodology and Process Development

11 Business Requirements Clear responsibility & accountability Benefits drive deliverables Standard benefit attributes Common vocabulary Improved portfolio investment decisions Consistent and scalable process Establish benefit owners

12 Benchmarks Not widely implemented Viewed as desired practice Few have formal process Case studies referenced: BMO Armstrong World Industries

13 Key Lessons Learned Lagging and leading indicators Focus on primary benefits Go beyond cost, time, scope Add benefits, risk and quality Simplify the process Consistent vocabulary

14 PRINCE2 FCC adopted PRINCE2 benefits realization methodology with processes tailored to suit FCC s business requirements and existing processes

15 Rationale for PRINCE2 Use of proven methodology Benefits realization embedded in PRINCE2 Business case is foundational to methodology PRINCE2 methodology can be tailored Consistent with existing FCC processes

16 Methodology Overview A tailored approach to benefits realization The business case is central to the process Benefits realization plan Quantitative and qualitative benefits Metrics established upfront Benefits tracked during and post-project

17 The Business Case The development path of the business case. Confirm Benefits Confirm Benefits Confirm Benefits 9/7/2009-9/30/2009 Pre-Project 9/30/ /29/2009 Initiation Stage 10/29/ /31/2009 Subsequent Delivery Stage(s) 12/31/2009-2/7/2010 Final Delivery Stage 2/7/2010-3/8/2010 Post-Project Verify Outline Business Case Verify Detailed Business Case Verify Updated Business Case Develop Business Case Maintain Business Case

18 Defining Benefits in the Business Case Common language Measurable, achievable and repeatable Measurement criteria for non-financial benefits Metrics established Baseline and target values determined

19 Outputs, Outcomes and Benefits Output: New loan system Outcome: Loan applications are processed more quickly and accurately Benefits: Costs are reduced by 10%, volume of loan disbursements increased by 15% and revenue increased by 10% annually

20 From Identification to Achievement the Benefits Realization Plan New project deliverable Fundamental part of project Project deliverable in its own right Major component of decision-making process

21 What can we measure? Increased revenue Cost avoidance Cost reduction Revenue retention Gain/loss on sale of asset

22 Leading Indicators What are the things you need to achieve to deliver the benefit?

23 Measurement and Reporting During project life cycle: benefits included in monthly status report project sponsor assesses progress benefits on track - yes/no track and report leading indicators benefits owner monitors progress benefits realization plan updated

24 Measurement and Reporting Post-project quarterly up to 2 years / until targets met clear accountability & commitment benefits owner monitors progress benefits realization plan key important change and challenge

25 Key roles Project initiator Benefits owner Project sponsor Project manager Corporate PMO Financial Services Strategy Execution Team Organizational Change Management

26 FFC s PPM Process and Benefits Realization Gate 1 Gate 2 Gate 3 On Strategy Screening Process Prioritization and Sequencing Process Project Activation Process Project Closeout Process Benefits Realization Continuous Improvement Post-project Audit Stage 1 Stage 2 Stage 3 Stage 4, 5, 6 Stage 7 Post-implementation FCC Project Life Cycle Define Benefits Revalidate Benefits Confirm Benefits Confirm Benefits Measure & Report Benefits 9/7/ /10/2009 Pre-Project 10/5/ /10/2009 Initiation Stage 11/4/ /22/2009 Delivery Stage(s) 12/22/2009-1/24/2010 Final Delivery Stage 1/24/2010-3/8/2010 Post-Project Verify Outline Bus. Case Verify Detail Bus. Case Verify Updated Bus. Case

27 Implementation and Organizational Change Management

28 Phased Approach to Implementation Pre-phase 1 Pilot phase Portfolio level implementation Maintenance

29 Why Phased? Overcome resistance to change Lessons learned incorporated in later phases Solid foundation of project-level data Tailored solution

30 Pre-phase 1 Some deliverables already in progress Focus on establishing initial governance structure Creation of an organizational change management approach Continued stakeholder engagement Process refinement

31 Pre-phase 1 Deliverables Governance structure for benefits realization OCM strategy and tactical plan Stakeholder consultations Benefits realization simulation

32 Pilot Phase Piloted with two projects (Q ) Major benefits realization process steps piloted: Benefits definition, quantifiable measures and baselines Identifying and assigning Benefits Owner Adoption of the Benefits Realization Plan Use of leading indicators

33 Pilot Phase Deliverables First round communication to senior management Selection of pilot projects Pilot teams selected and trained Benefits realization plans for pilot projects Benefits realization templates Requirements and implementation plan for project-level phase

34 Portfolio Level Implementation Go-live October 1, 2010 New PPM projects only Formal process implemented Training to benefit owners, project leaders and team members Training PMO, OCM and Finance business partners Process and templates in production

35 Organizational Change Management Top-down alignment All impacted stakeholders engaged Key stakeholders involved throughout Tactical plan Customized communication Fit with existing PM/PPM processes Just-in-time training Tip sheet

36 Impact to Stakeholders New processes New tools New terminology/concepts Mindset change New roles and responsibilities Key messages

37 Post-implementation Evolution Refined process Updated benefits realization plan Created eligibility guidelines Revisited benefits owner role Importance of leading indicators Challenges and lessons learned Reporting

38 Eligibility Guidelines Challenge Process Assess for eligibility can benefits be quantified? can they realistically be measured? are there any leading indicators that can be measured? can any business outcomes be quantified and realistically measured?

39 Lessons Learned Lessons learned workshop July 2011 Nine months after go-live Key stakeholders Intend to repeat workshop next fiscal year Continuous monitoring of projects

40 Lessons Learned Successes Challenges Things we changed

41 Successes The process works well when: Key benefits are easily quantifiable Sponsor and benefits owner engaged Business case built before benefits realization plan Benefits owner easily identified Benefits and leading indicators easily baselined Roles are clear

42 Challenges The process does not work well when: Key benefits are not easily quantifiable Sponsor and benefits owner not engaged Business case not built before benefits realization plan Benefits owner not easily identified Benefits and leading indicators not easily baselined Roles are unclear

43 Other lessons we learned Process vs. an event Importance of leading indicators Focus on primary benefits Simplify the process Consistent vocabulary Benefits owner challenges Relatively minor process change; substantial mindset change

44 Trends Engaged sponsors and benefits owners = smoother process Appropriate level of sponsor and benefits owner = maximum influence and engagement Responsibility for benefits measures will fluctuate depending on the benefit Value of developing business case prior to consideration of benefits realization

45 Things we changed Revisited the benefits owner role Ensured appropriate level of benefits owners Reinforced the value of OCM Continue to quantify benefits and include them in business case Reinforce importance of business case Clarified rules for exempting a project from benefits tracking

46 The Future Benefits realization is applied to all projects in the organization Projects are prioritized in the portfolio based on benefits Projects are not approved if they don t deliver clear benefits Active projects are stopped when they re no longer on track towards realizing benefits

47 The Future (continued) Six Measures of Project Success Benefits Risk Quality Scope Cost Schedule

48 Conclusion FCC developed its benefits realization methodology & process in the context of: Industry best practices PRINCE2 methodology Existing project and portfolio management processes FCC followed a phased approach to: overcome resistance to change build a tailored solution

49 Conclusion (continued) We followed a formal organizational change management strategy Implemented for projects in portfolio October 2010 The process continues to evolve with input from key stakeholders

50 Learning Objectives Learn how FCC developed its Benefits Realization methodology and process Learn how FCC approached implementation and organizational change management Learn that successfully implementing Benefits Realization is a process as opposed to an event

51 Questions?

52 Thank You

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