These are some of the questions which Mike Reynolds, as Network Rail’s Group Investment Controller, set out to answer, and came up with a management tool to aid robust governance. He will explain some of the challenges and the importance of this work.
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1. / Benefits Management, Network Rail Benefits Management Mike
Reynolds Group Investment Controller Network Rail 9th September
2014 1
2. / Network Rail Responsible for owning, maintaining and
enhancing the UK rail network. Driven by safety, performance and
cost efficiency. Significant challenges to achieve deliverables of
funding settlement. 9th September 2014 Benefits Management, Network
Rail 2
3. / Issues as set out in CEO escalation Issues Articulation of
benefits is not completed in a consistent manner across the
business. Benefits identified during early programme definition are
not always continually reviewed or maintained. The recipients of
change are not always committed to the benefits specified There is
challenge around the tracking of intangible benefits 9th September
2014 Benefits Management, Network Rail 3
4. Background Currently tracking and realising the benefits
from investment schemes, primarily financial but also performance,
safety and other qualitative deliverables is not a transparent
activity. There is no corporate tool for tracking and reporting
claimed benefits. This leads to issues realising returns on
investment, ensuring value for money and directly attributing
project successes; or learning from our mistakes. Previously the
cash benefits have been tracked via look-back reports, close out
reports and pre-budget reductions. There is an increase focus on
returns and our ability to report successful delivery of scheme
objectives, maintain focus on commitments, remove duplication of
claims, justify investment and secure RAB additions within the
spend to save framework. / 9th September 2014 Benefits Management,
Network Rail 4
5. / thats not to say benefits tracking isnt taking place.
..plus otherslevel crossing safety..etc 9th September 2014 Benefits
Management, Network Rail 5 Confidential information from slide
removed
6. / Vision Greater Security & Realisation Prioritisatio n
Managed Risks Articulated Benefits Management Confidence Better
Benefit Management One Version of the Truth Benefit Culture Clear
Accountabilities 9th September 2014 Benefits Management, Network
Rail 6
7. / What are we setting out to achieve? Why ? What is the
problem we are trying to address? What are the benefits of solving
the problem? Qualify &/or Quantify: Determine the benefits
Identify the business case Success Criteria What are the key
performance indicators? What does good look like? Have we delivered
on our commitments? Confidence Levels: Likelihood to deliver
Mitigate risk to benefits Understand current position Realise:
Business recognises benefit Ensure embedment Lessons learnt 9th
September 2014 Benefits Management, Network Rail 7
8. / Business and Programme Benefit Objectives Assist sponsors
with the articulation of benefits in a consistent and useful way
Senior management, Executive and Board confidence Emphasis on
benefits-led culture for activities outside core Enhancements &
Renewals Increased confidence in the benefits case as the programme
matures Process in place to enforce Benefit Owner sign-off Audit
trail Standardised proof of benefits and contract between programme
and the business Improved realisation Lessons learnt and optimism
bias One version of the truth Value for Money comparisons and
prioritisation 9th September 2014 Benefits Management, Network Rail
8
9. / Identifying Benefits & Incremental Costs Exit Rate
Target Rate Business Change Initiatives Minor Schemes &
Investments Incremental Costs / Disruption Local Improvement
Initiatives Volume of benefit Generally, whatever the benefit
(financial or non-financial) there will be a certain level of
expectation built into current assumptions. There may also be
incremental costs, disruption or risk associated either with the
introduction of a specific initiative or a change of circumstances
within the BAU operations. Understanding as much of this as
possible is key to recognising the impact of schemes. 9th September
2014 Benefits Management, Network Rail 9
10. / Identifying Benefits & Incremental Costs Exit Rate
Target Rate Business Change Initiatives Minor Schemes &
Investments Incremental Costs / Disruption Local Improvement
Initiatives Volume of benefit Challenges include identifying
schemes claiming the same benefit or effecting the same business
area, changes to costs and confidence / optimism bias within
initiatives. This exercise will allow us to get a better
understanding of the duplicates and a greater confidence of genuine
outputs to be delivered by each scheme. 9th September 2014 Benefits
Management, Network Rail 10
11. / Benefits in Investment 9th September 2014 Benefits
Management, Network Rail 11
12. / Project & Programme Management GRIP Governance for
Railway Investment Projects Investment Authority required
throughout the life of the project MSP4NR Managing Successful
Programmes (MSP) 9th September 2014 Benefits Management, Network
Rail 12
13. 9th September 2014 / Benefits Management, Network Rail
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14. 9th September 2014 / Benefits Management, Network Rail
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15. / Benefits Management, Network Rail The Benefits Circle 9th
September 2014 15 The benefit tool has been built to align with the
4 quadrant model. Quadrant 4 Quantitative reduction in costs 1 3 2
4 Internal benefit External benefit Increases in productivity
Investments within Network Rail are considered equally on their
contribution to the above groups and alignment to supporting the
corporate strategic themes
16. / Benefits Management, Network Rail Benefit principles All
investments must state a benefit from at least one category above.
Benefits should be directly attributable to the proposal (not wider
programme or subsequently enabled project). Sponsor, Deliverer and
benefit recipient (Client) are all required to endorse facts and
statements made in the investment proposal. Accountability for the
delivery of the benefits sits with the Sponsor in line with the
Clienting guidelines. 9th September 2014 16 At the point of
requesting authority:
17. / Investment Systems 9th September 2014 Benefits
Management, Network Rail 17
19. / The Benefits Reforecasting tool Purpose: i) current view
of the programmes Benefits Case as the programme matures ii) build
up of detail and breakdown for the completion of the Benefits
Profile and handover to the Benefit Owner Contents: Data required
for articulating the programme benefits case, for obtaining Benefit
Owner approval , in building the Benefit Profile and for portfolio
aggregation and analysis. Responsibilities: The Benefits Lead for
the programme is responsible for completing the tool. The Programme
Sponsor is ultimately accountable for the benefits case. 9th
September 2014 Benefits Management, Network Rail 19
20. / The NR Benefits Realisation Lifecycle 1. Articulate
Business Case An initial business case is outlined in Investment
Papers for investment schemes offering ROI 2. The Benefits
Reforecasting tool: i) current view of the programmes Benefits Case
as the programme matures ii) build up of detail and breakdown for
the completion of the Benefits Profile and handover to the Benefit
Owner 3. Benefit Profile - sets out exactly what the benefit is,
any further actions necessary for realisation and the dates for
realisation. 4. Benefits Realisation - confirmation and evidence of
realisation as baselined in the Benefit Profile. d 9th September
2014 Benefits Management, Network Rail 20
21. / Accessing Information 9th September 2014 Benefits
Management, Network Rail 21
22. / Benefits Management, Network Rail Accessing Information
9th September 2014 22
23. Financial and Non-Financial benefits Articulation Financial
benefits are defined in the Benefits Principles and consist of cost
savings, increased income or non-cashable process efficiencies or
productivity. Non-financial benefits will utilise the Framework
currently being put in place which will allow projects and
programmes to articulate benefits cases in standardised terms e.g.
categorisation in terms of benefit type (and metric where
possible). Realisation Financial benefits will utilise budget
reductions/increased income and variance analysis to observe
realisation. Non-financial benefits will rely on the Benefit Owner
to confirm the realisation of benefits. / Health Track Failures
Structure Failures Earthworks Failures Signalling WSFs Level
Crossings (Road Vehicles) SPADs Objects On The line Buffer Stop
Collisions Irregular Working FWI SAFETY Close Call Incidents Level
Crossings (Pedestrian) Suicides Route Crime & Trespass Employee
Health & Wellbeing Environmental Incidents Carbon Emissions
Construction Waste Stations E&P Telecoms Regulaor Enforcement
Avoidance Reputational Train Accident Risk Workforce Public Safety
Environment Other 9th September 2014 Benefits Management, Network
Rail 23
24. 9th September 2014 / Benefits Management, Network Rail
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25. 9th September 2014 / Benefits Management, Network Rail
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26. / CEO escalation CEO Escalation Whats the solution?
Articulation of benefits is not completed in a consistent manner
across the business. Corporate Benefits Principles are being rolled
out and programmes will use a standardised methodology and
reporting tool so aggregation and a corporate view of the total
benefits can be maintained and improved benefits cases will be
seen. Benefits identified during early programme definition are not
always continually reviewed or maintained. The Reforecasting Tool
will allow a current benefits case to be maintained and will allow
the addition of detail such as the programme, and benefits case,
maturity and confidence. The recipients of change are not always
committed to the benefits specified Benefit Owner approval and sign
up are a necessary stage in the benefits lifecycle and we will be
in a position to carry out exception reporting. The tool will
require endorsement via MOSS workflow to baseline a forecast
position. There is challenge around the tracking of intangible
benefits The establishment of a non-financial benefits framework
will define benefits ownership and accountability post programme
delivery. 9th September 2014 Benefits Management, Network Rail
26