1 - Transform - Assess v1.1 FINAL

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Version 1.1 January 2009

A Delivery Framework for Large, Complex Programmes

powered by Making Change Stick


powered by Making Change Stick


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PricewaterhouseCoopers LLP2

Making change stickPerformance Improvement Consulting


transform*powered by Making Change Stick







Section Page

1 Stage 1: Assess......................................................................... 4

1.1 Introduction......................................................................... 4

1.2 Interdependencies.............................................................. 6

1.3 Benefits .............................................................................. 6

1.4 How to Access Reference Materials................................... 6

1.5 How to apply Value Chain Consulting (VCC) methodology 7

A Determine Business Needs & Benefits .................................. 8

A1 Review Strategy & Drivers............................................ 10

A2 Customer / Market Needs & Insights ............................ 14

A3 Consider Operational Locations.................................... 19

A4 Legal, Regulation and Internal Boundaries................... 21

A5 Legal Structures & Taxation.......................................... 23

A6 Supply Chain ................................................................ 25

A7 Sourcing........................................................................ 27

B Benefits, Project, Programme and Change Management.... 29

B1 Project Initiation ............................................................ 32

B2 Project Governance ...................................................... 37

B3 Project Management..................................................... 42

B4 Programme Governance .............................................. 46

B5 Programme Set-up ....................................................... 52B6 Quality Management..................................................... 57

B7 Agree Benefits Process ................................................ 62

B8 Programme Planning .................................................... 65

B9 Benefits Planning.......................................................... 70

B10 Best Fit Change Approach............................................ 76

B11 Transformation Vision................................................... 83

B12 Change Leadership and Organisational Capability....... 87

B13 Transformation Capability Route map .......................... 92

B14 Resource Planning ....................................................... 98


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B15 Stakeholder Engagement ........................................... 101

B16 Communications ......................................................... 109

C Create Transformation Baseline ........................................ 115

C1 Prepare for Data Gathering......................................... 120

C2 Data Gathering ........................................................... 126

C3 Review Existing Governance Structures..................... 131

C4 Review Existing Operational Models .......................... 133

C5 Review Existing Physical Locations............................ 136

C6 Review Facilities Principles......................................... 138

C7 Customer / Market Analysis........................................ 142

C8 Review Service Metrics / KPIs.................................... 146

C9 Review Organisation Policy and Standards................ 148

C10 Review IT Principles................................................ 151

C11 Data Review............................................................ 157

C12 Leading Practice Gap Analysis ............................... 160

D Create Case for Transformational Change ........................ 172

D1 Agree Evaluation Criteria & Scoring Mechanism ........ 174

D2 Opportunity Evaluation ............................................... 177

D3 Develop High Level Operating Models ....................... 181

D4 Agree Improvement Opportunities .............................. 187

D5 Build Business case.................................................... 189

2009 by PricewaterhouseCoopers LLP

All rights reserved.

No part of this publication may be reproduced or distributed in any

form or by any means or stored in a database or retrieval system,

without prior written permission of the publisher.

COPYRIGHT 2009 PricewaterhouseCoopers LLP.

PricewaterhouseCoopers LLP has taken all reasonable steps to

ensure that information contained herein has been obtained from

reliable sources and that this publication is accurate and

authoritative in all respects. However, it is not intended to give legal,

tax, accounting or other professional advice. If such advice or otherexpert assistance is required, the services of a competent

professional should be sought.


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1.1 Introduction

The Assess Stage of transform* is used to confirm the organisations business needs, to assess the

selected areas of the current environment for improvement opportunities and to agree upon the opportunities

for improvement. This is through defining the High-level Blueprint for the new organisation and the Case

for Change and the portfolio of initiatives that will transform the organisation, whilst achieving short- and

medium-term fiscal and operational / service goals.

There are four Phases within Assess:

Phase A Determine Business Needs and Business Benefits. The scope is confirmed and the

project is commenced. The organisations business needs are planned, business benefits are reviewed

and confirmed.

Phase B Benefits, Project, Programme and Change Management. Project initiation, and change

diagnosis are undertaken. During this Stage, development of programme governance, programme plans,

resource plans and benefits plans are developed . The best fit change approach is diagnosed, a vision

for the transformation is developed and leadership aligned to support it. With a view to creating the

conditions required for sustainable change, the leadership and organisational capacity for transformation

are assessed and a high level transformation route map is developed. Initial stakeholder analysis is

completed and communications planning is commenced following a communications audit. Phase B is across-life cycle Phase as different components from this Phase are used and completed in other Stages;

Defining the High-

level Blueprint for

the new organisation

and the Case for

Change, and the

portfolio of initiatives

that will transform the

organisation, while

achieving short- and

medium-term fiscal

and operational /

service goals

Creating the

detailed Target

Operating Model

and plan for the

organisation (e.g.

new org structures,

processes,

locations, skills, IT

etc), whilst also

implementing quick

win initiatives

Build new

processes and

supporting IT,

locations, org

structures, skills

etc., to support new

ways of working.

Understand in detail

the requirements to

implement these

across the

organisation

Implementing the

portfolio of group-

wide and

organisation-wide

initiatives, pro-

actively ensuring

benefits are tracked

and realised,

addressing any

shortfalls (i.e.

portfolio leakage)

Structure

Facilities

Process / Service

People & Organisation

Enabling Technology

Change Management

Programme Delivery

Strategic Direction Assess Design Construct Implement Operate &

Review

Rollout new

ways of

working and

ensure

benefits are

realised

Build the

new ways

of working,

and design

rollout

Detailed

Design,

TOM and

Quick Wins

Create

Case for

Change

and scope

initiatives

Operate new

organisation

and implement

continuous

improvement

Operate the

transformed

organisation, deliver

the benefits, and

instigate a culture of

continuous

improvement

Defining the High-

level Blueprint for

the new organisation

and the Case for

Change, and the

portfolio of initiatives

that will transform the

organisation, while

achieving short- and

medium-term fiscal

and operational /

service goals

Creating the

detailed Target

Operating Model

and plan for the

organisation (e.g.

new org structures,

processes,

locations, skills, IT

etc), whilst also

implementing quick

win initiatives

Build new

processes and

supporting IT,

locations, org

structures, skills

etc., to support new

ways of working.

Understand in detail

the requirements to

implement these

across the

organisation

Implementing the

portfolio of group-

wide and

organisation-wide

initiatives, pro-

actively ensuring

benefits are tracked

and realised,

addressing any

shortfalls (i.e.

portfolio leakage)

Structure

Facilities

Process / Service


Enabling Technology

Change Management

Programme Delivery


Review

Rollout new

ways of

working and

ensure

benefits are

realised

Build the

new ways

of working,

and design

rollout

Detailed

Design,

TOM and

Quick Wins

Create

Case for

Change

and scope

initiatives

Operate new

organisation

and implement

continuous

improvement

Structure

Facilities

Process / Service


Enabling Technology

Change Management

Programme Delivery


Review

Rollout new

ways of

working and

ensure

benefits are

realised

Build the

new ways

of working,

and design

rollout

Detailed

Design,

TOM and

Quick Wins

Create

Case for

Change

and scope

initiatives

Operate new

organisation

and implement

continuous

improvement

Operate the

transformed

organisation, deliver

the benefits, and

instigate a culture of

continuous

improvement


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1.2 Interdependencies

The Assess Stage is the cornerstone of a successful programme as the baseline for all further activity within

the programme is completed within this Stage. Therefore, all later Stages of the programme have a

dependency on the Assess Stage. In particular:

A diagnosis of the best fit change approach will inform the transformation plan, and the appropriate

balance of directive and inclusive change management activities, or how the changes are delivered

throughout all the Stages. This includes identification of the change principles, and the best fit design

and implementation approach that will enable benefits and changes to be sustained.

Initial alignment of the leadership of the organisation later Stages rely upon continued robust leadership

to maintain the transformation effort, embedding new ways of working into the business such that the

change is sustained and full benefits realised;

The baseline of the current organisation is created measurement of benefits and the good news

messages that maintain a transformation programmes momentum, need a robust baseline against whichto compare the change.

1.3 Benefits

The benefits of completing the Assess Stage for the organisation are that it creates a robust vision, strategy

and route map for moving the organisation forward. It helps the leadership, the individual of the organisation

and key stakeholders to understand the need for change, its impact and also what the organisation might

look like once it has changed. Equally important, the vision and route map create a shared understanding of

what success looks like, and generates enthusiasm for the change when it is created by involving and fully

engaging with the people that will make the change happen and those who will be impacted by the change.

1.4 How to Access Reference Materialstransform* is available for practitioners to use in a variety of ways:

Making

change

stick

Benefits

Involvement

Sustainability

Making

change

stick

Benefits

Involvement

Sustainability

Benefits

Involvement

Sustainability

Best-fit change approachIn the Assess Stage, a diagnosis into the best-fit change approach

is gained through an enquiry into 5 key areas. In understanding

the Context, Complexity and Consequence of the transformation,

and the organisations Culture and Capability, it is possible to

identify the Change Principles, and best fit Design Approach and

Implementation Approach. The Change Principles permeate allaspects of the change approach and address how the change

should be designed and implemented. Identifying the best fit

change approach in this Stage will inform how benefits,

involvement and sustainability issues should be addressed in the

transformation.

BenefitsIn the Assess Stage, the focus is

establishing an appropriate benefits

management process. Sponsors and

stakeholders are involved in agreeing to

a benefits realisation process, in

benefits planning and in defining thebenefits linked to the vision.

InvolvementIn the Assess Stage, involvement

and engagement of keystakeholders begins as part of

undertaking assessment activities.

For example, appropriately involving

stakeholders in identifying the

change approach and benefits

maximises levels of engagement.

Likewise, in order for the Assess

stage activities to be undertaken

successfully, it is vital to begin

engaging the front-line by consulting

them and keeping them informed

through appropriate

communications. In parallel, a

stakeholder analysis and

communications audit is undertaken

in order to develop a stakeholder

engagement and communications

strategy/plan for the programme,

aimed at maximising commitment

and minimising resistance to the

transformation. This strategy/plan

will be informed by the diagnosis of

the best fit change approach,

through which the appropriate

balance of directive and inclusive

change management activities will

be identified.

SustainabilityIn the Assess Stage, an assessment is

made into the change capability of the

leaders and the organisation so that

appropriate change leaders can be

identified and change capability

developed in the later Stages. Equallyan analysis of the organisations culture

in terms of current ways of working is

undertaken to identify the behaviours

that would support and hinder the

transformation programme. An

assessment of the current

organisational structure and its design is

undertaken to identify improvement

opportunities so that a best-fit

organisational structure can be

developed aligned to the transformation.


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Online through Gateway An online version of the framework is available through gateway using the

following link Gateway transform*. The online version contains all of the detailed descriptions of the

Stages, Phases, Tasks and Steps within the framework. It also contains contextual links to reference

materials for each of the tasks and links to other relevant methodologies, tools and guidance;

Offline Navigator An offline version of the navigation for the framework is available for use as an aide

memoire and also to support explanation of the framework to organisations. The offline version does notcontain the reference materials but does contain links to the Gateway content;

Downloadable Documents Downloadable Word documents are available for each of the Stages within

the framework. These are useful to support the creation of proposals, etc. where practitioners need to

copy some of the content. The reference materials are not included within these documents.

The reference materials within the Gateway version of the framework are linked to each of the tasks. At the

bottom of each task page are three buttons that perform a contextual search for reference materials:

Templates Are example templates that can be used to complete the task;

Tools & Guidance Are additional tools or guidance notes that are

relevant to the task;

Example Deliverables Are examples of the output deliverablesdescribed within the task.

1.5 How to apply Value Chain Consulting (VCC) methodology

Value Chain Consulting (VCC) is a problem solving methodology. It can be used to structure the approach

to performing a task, or a series of tasks within transform*. Whilst the scope of transform* tasks to be

performed will vary by organisation, the way in which the tasks are addressed needs to be consistent.

Examples of how VCC may be applied across the four Phases of the Assess Stage are provided within each

of the Stages.


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The key interdependencies include the Transformation Vision and the Transformation Baseline. Typically, as

information is gathered to form the baseline, the organisations business needs and benefits can be further

defined.

The Tasks in this Phase are used to provide clarification on what direction the organisation wants to take by

reviewing the vision and clarifying the organisational objectives. The benefits of this Phase include:

Understanding legislative and other requirements;

Informing the baseline by which the organisation can measure the success of the transformation;

Bringing clarity to the organisational direction and defining the drivers behind this;

Achieving stakeholder buy-in to the direction through their involvement in defining the outcomes, benefits

and vision;

Clarifying the expected business outcomes and benefits;

Being clear about the customer needs and insights required to inform the direction; and

Validation of why the transformation is required.

The key tasks within Phase A are:

A1: Review Strategy and Drivers;

A2: Customer / Market Needs and Insights;

A3: Consider Operational Locations;

A4: Legal, Regulation and Internal Boundaries;

A5: Legal Structures and Taxation;

A6: Supply Chain; and

A7: Sourcing.


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A1 Review Strategy & Drivers

Purpose

To provide a strategic direction for the transformation that addresses the requirements and objectives of the

organisation.

Overview

This task involves a high-level review of the business strategy and meetings / workshops with key senior

management to gain an understanding of the drivers and objectives of the business transformation

programme.

For example, the organisation may be facing a new competitor with a lower cost base. There is a need to

develop a strategic response. VCC, together with appropriate industry and organisation-specific knowledge

can be used to develop an appropriate strategy and review relevant scenarios.

Interdependencies

Interdependencies

C: Create Transformation Baseline Establishing the baseline from which to establish the transformation

B10: Transformation Vision Clarity on the current transformation vision

Inputs

Inputs

Background Information Organisation background information on objectives, performance

measures and targets, current improvement initiatives, etc.

Strategic Documents All documents and plans related to strategic direction

Vision A copy of the current organisational vision

Business Plans Related business plans with projected outcomes and benefits

Task Description

Tasks

A1.1 Review Business Strategy Gather and review background information and to understand the

drivers behind the transformation

A1.2 Transformation Objectives Test the organisations current thinking and positioning on major

business objectives and to challenge the current strategies through

visioning sessions, leading practice, performance indicators and

policies

A1.1 Review Business StrategyThe first step in a transformation journey is to gather and review background information on the

organisation. This may be conducted by interviewing key stakeholders and senior management and by

reviewing strategic documentation such as business plans, strategic documents and visions for the future.

It is important to understand the drivers for transformation. Transformation is required when a stepchange in performance is needed and there is a burning platform or imperative situation that needs to

be addressed. This can be related to market forces, financial performance or change of direction and the


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current business strategy should be used as the primary source of where the organisation wants to go

and how it achieves its plans for the change programme.

Interviews with the senior management are an effective way of achieving this and questions may include:

What is the vision for the future of the organisation?

How can the organisation achieve its vision? What are the major barriers that need to be overcome?

What are the drivers for transformation and why?

How will the transformation journey be achieved?

Do financial targets or benefits exist that are a prerequisite for transformation?

A1.2 Transformation ObjectivesDefining the transformation objectives is typically achieved by holding a senior management workshop

that is designed to test the organisations current thinking and positioning on major business objectives

and to challenge the current strategies through the use of visioning techniques, reviewing leading

practices, performance indicators and policies. It also used to initiate and engage the leadership team for

the transformation through early involvement and consultation.

The main outputs of the workshop include:

An aligned and energised executive and

management team;

Initial area of focus for the transformation;

Areas requiring detailed investigation;

Key work-streams and resourcing for the

transformation;

Documented visions for the key initiatives andprioritisation of resource;

An introduction to all activities required to complete

the transformation; and

A document that captures all of the above that can

be communicated to all individual.

The aims from the workshop are to describe the direction

the leaders of the organisation want to go to create the new

organisation and why. It is a starting point: opportunities

will be refined and adjusted as the approach progresses. It

is a statement of intent by the leadership team of where

they want to go and how they are going to get there. Insummary, it is a unified commitment to act by the leadership

team.

For an HR transformation programme, for example, a

similar approach would be taken to engage with senior stakeholders. This is referred to as a mobilisation

workshop. The focus of this is to bring key stakeholders together, confirm the objectives of the

transformation project, vision, scope, why the project is important, project plan, establish any challenges

or risks to the project and how to overcome them, and establish a way of working which is later followed

by creation of a PID or project charter.

The output from this workshop form the transformation principles and are captured in a Transformation

Objectives document, which is used to support the transformation ensuring focus on the critical tasks to

deliver the Assess and Design Stages.

For example, this Objectives document may:

Lesson Learnt

Creating a Transformation Objectives

document describes why the

transformation is being undertaken and

provides inspirational goals for the

transformation that can be used to provide

positive messages and momentum for the

programme. If the goals of the

transformation are not well defined and the

reason for it well understood and accepted

by management, then the programme will

be more likely to suffer from changes in

scope, duration and levels of engagement.

The Transformation Objectives document

should be considered a key communication

document and hence may be used with a

number of different types of stakeholders

for communications, buy-in and

engagement purposes. Hence thedocument may need to be presented in

different forms to suit different types of

stakeholders.


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Describe the vision and strategy for the organisation (or reference other documents that describe

this);

Describe how the organisation will change in terms of areas such as the customers it serves, its

operations or services it provides, the channels through which it operates or provides services,

the market perception and branding that are to be created;

For example, a new front-office customer service centre is to be created (to improve access timesand channels to contact the organisation). It will support the provision of new customer-focussed

services based upon customer insight and understanding of customer segments (e.g., demographic

changes);

Describe how the organisation will reconfigure itself to provide these changes e.g., creating a

new back-office shared services (Finance, HR, Procurement, Property and IT) or a new policy /

commissioning model, separating policy from delivery of services. Alternatively the organisation

may try to become more adaptable in order to flex to changes in demand or invest resources in

different areas over time;

Describe how the organisation will change in terms of its finances, both revenue and capital e.g.,

describe How the operating costs of the organisation need to reduce by X% over the next 1-5

years, with income increasing by Y% and capital receipts needed of Zm to fund investment innew or changed products or services.

Depending upon how well defined the transformation is, this document may not need to be large but

merely reference what is already established. The purpose of the document is to ensure that the scope

of the transformation is defined. and should explicitly state what is not changing as well as what is.

The potential requirement for an initial high-level business case

As well as defining the objectives for the transformation, it may be necessary to create an initial high-level

business case for the transformation, in advance of doing any significant data gathering and baselining in

Phase C, if

There is scepticism about the achievability and affordability of doing the transformation;

The Data Gathering in Phase C has the potential to be expensive, and costs need to be justifiedby providing a view of the scale of savings available; and/or

The measures for success need to be clearly articulated, both fiscal and non-fiscal.

Note that at this point the benefits may be conceptual (e.g., based on general principles, observations,

benchmarks, estimates from executive interviews / team workshops), as actual opportunities may not

have been defined in detail. For example:

We need to save X% from our revenue budget starting from financial year XX;

We have an additional revenue budget of Ym and capital budget of Zm to invest in identifying

savings all other revenue and capital costs must be met through savings;

We believe that we can save X% from our revenue budget because:

o Our costs are X% higher compared to similar organisations (through simple benchmarks

e.g., benchmarking club);

o Our assessment of our processes in area XYZ is that they are poor;

o Our assessment of our manufacturing downtime is that it is excessive;

o Our assessment of product quality is that it is poor;

o Our assessment of our use of IT in area XYZ is that is poor;

o Our assessment of our skills base and investment in people in area XYZ is poor; and

o Our assessment of our use of our assets (buildings, contracts, etc.) in area XYZ is poor;

We believe we can increase our service to our customers through:o Improving product reliability;


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o Increase in customer satisfaction rates to 90+% on first point of contact;

o We will increase the hours and channels of access to our services and target this

services to specific segments of our customer base;

o We will be pro-active in providing our services i.e., reaching out to our customers;

o We will partner with other organisations to build services based around customer needs,not our own ways of working; and

o We will provide more visibility and accountability for our services through new reporting

and democratic arrangements.

We believe that we will become a more adaptable organisation through:

o Separating policy and strategy from delivery and improving our commissioning and

sourcing of delivery;

o Implementing a flexible resourcing model to meet fluctuations in demand;

o Reducing our unwanted individual turnover to less than X%;

o Setting minimum targets for training and becoming an accredited Investor in People;

o Creating a new performance management regime, focussing on improving individual and

team performance and not accepting poor performance; and

o Measuring employee satisfaction every quarter, with a target of 90% employee

satisfaction by 20XX.

We believe we will become a more sustainable organisation through:

o Ensuring all new investments pass gateways tests for sustainability and economic re-

generation; and

o Setting a new target of XXX for carbon emissions and energy usage across the

organisation, with accountability identified for hitting these targets.

Outputs & Deliverables


A1 i: Transformation Principles A set of principles to underpin the business transformation

Benefits

Senior management engagement and agreement on the vision and objectives of the transformation.

Clarity of direction to proceed with the next stage of the transformation.

Knowledge Transferred to the Organisation

An understanding of the objectives and a set of common principles to underpin a transformation

programme.

An approach and process for information capture to establish a baseline position on the business needs

and benefits.


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A2 Customer / Market Needs & Insights

Purpose

To verify the alignment of the organisations vision with that of the market and its customers.

Overview

This task is used to establish a position on areas such as:

Understanding strategies for growth

Organisational development and where the organisation is in terms of maturity, and what needs to be

addressed to take the organisation to leading practice levels

Understanding customer needs

Identify groups of customers whose requirements are currently not fully addressed and understand

where current offerings fail and which product / service attributes customers really want.

Validating market opportunitiesSegment customers based on desire or ability to buy the product or use the service and identify the

early adopters, whose demand / willingness is highest. Quantify market in terms of size (volume of

customers) and characteristics.

Understanding the landscape

Evaluate prior commitments (e.g., technology, supply chain, or processes) that could influence strategic

choices and ability to respond. Identify sources of growth that the business can use to increase or

improve customer service

Assessing alternative business models

Test the boundaries for the business case address all the what ifs; address the opportunity from

different perspectives. Understand the pay offs to different customers under each option or scenarioas a predictor of future industry out-turn and potential reactions and evaluate the current state of overall

business activities and functions relevant to service improvement. Develop market benchmarks to

provide the background context and highlight potential market positioning and direction. Outline the

direct financial constraints and outline and establish process to comply with existing and expected legal

and regulatory requirements. Take account of the organisations leadership resolve, attitude towards

risk, capacity for change, HR considerations and the ability of the existing infrastructure and technology

to support the level of change necessary.

Market testing

Through pilot testing, regularly assess how realistic the planning projections are and make adjustments

as appropriate. Monitor actual versus budgeted spending and the assumptions supporting the time and

cost projections until full volume capability is achieved.

Understanding influences on demand

Use analytical models to gain key insights and a deeper understanding of customers behaviour and

their needs. Apply customer insight models to develop targeted sales and marketing activities - identify

customer behaviours that present the opportunity to improve service provision. Set effective,

measurable goals for each segment and gain quantitative insights into why organisations lose their

customers and develop models to help customers.


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Interdependencies

Interdependencies

B10: Transformation Vision Clarity on the current transformation vision and identification of the

best fit change approach

Inputs

Inputs

A1 I Transformation principles The set of transformation principles to underpin the transformation


measures and targets, current improvement initiatives etc..




Current Customer / Market Data Information on how service is provided today, key measures and

targets, current experience and standards of measurement,

channels of use, segmentation plans, key processes, cost to serve,

etc.

Task Description

Tasks

A2.1 Customer Want and Dont Wants A polling of customers to establish needs

A2.2 Customer Alignment Needs aligned to the transformation

A2.3 The Customer Centric Organisation Principles for developing a customer centric organisation

A2.4 Market Analysis Environment, competitive and growth strategies

A2.1 Customer Wants and Dont WantsComplete a polling of customers either through electronic media or face-to-face to gather a list of wants

and dont wants from the customer base. A sampling approach can be used and key customer segments

should be targeted to derive a balanced view of the customers needs. This can be used to either validate

or amend the transformation principles that have been developed.

With the changing nature of the marketplace, determining customer needs and wants has taken on

immense prominence for companies that apply best practice. With competition on a global scale,

companies know that to differentiate themselves, they need a closer relationship with customers one

that can anticipate needs and wants and satisfy them. As a result, rather than focusing primarily on the

sell aspect of their business, leading companies are looking at the people factors and working to

establish strong, long-term relationship with customers. Such relationships are essential for longevity of

the company and the best strategy for increasing and maintaining relationships.

Implement segmentation for greater insight into customer needs and wants - gather basic

demographic data such as age, income and geographic location but look for more complex

behaviours and preferences to analyse so they have deeper insight into customer needs and

wants and whether the organisation is meeting them. To deliver required benefits data must bereliable so it is important to assess the data and how it is interpreted in terms of completeness


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and accuracy. Leading organisations recognise that quality data is essential to effective

segmentation variables and invest heavily in data modelling, data warehousing and data mining

to capture and scrutinise extensive customer information. Self-segmentation in an offer may be

packaged in a number of different ways so it is not about the choice of which service but the

choice of which experience. The customer takes control of which choice;

Exploit multiple channels to capture comprehensive feedback about customerexpectations - Invest in data-collection and integration technology to track evolving customer

needs and wants. Collect a mix of transactional data and behavioural information and capture

unexpressed customer feedback by observing use of the service in real-life settings. Administer

detailed customer surveys regularly to uncover areas of change and conduct live interviews with

customer that elicit unique insight;

Convert customer knowledge into product and service solutions - exploit the power of the

Internet to gather customer knowledge and target customer needs. Incorporate customer

knowledge into organisational wide planning and operating activities. Develop a working

knowledge of the system architecture of business customers. Create a comprehensive system

for gathering in-depth customer knowledge. Position transaction data as a central component of

customer knowledge and collect knowledge that will strengthen relationships with the

organisations customers;

Accommodate customer service needs at every point of contact - Monitor incidents closely

to identify true customer needs and identify customer service needs in real time. Direct

employees to take ownership of the customer experience; and

Leverage CRM technology to support customer needs and wants - Use analytical CRM

applications to develop strategic customer insight and enforce data quality as the foundation of

CRM initiatives. Personalise customer communications to build relationships and integrate

customer information from all channels to provide a complete real-time view of the customer.

Secure leadership commitment to an organisational wide CRM strategy. Organise the business

around customers in order to provide solutions to their problems and Use online CRM marketing

tools to capture customer data in real time.

Figure a: Customer Wants and Dont Wants

A2.2 Customer AlignmentHaving collected the customer wants and dont wants they should be compared with the transformation

principles and any conflicts resolved with the transformation principles updated. This can be achieved

through a desktop exercise, with any conflicts documented and resolved through discussion with senior

management.


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A2.3 The Customer Centric OrganisationOne of the functions of the organisation is to strengthen customer relationships. Best practice

organisations view their association with a customer as a continually evolving relationship. All points of

customer contact contribute to this relationship; face to face; call centre; Internet and web; and

correspondence. Because each of these contacts delivers information or service to the customer, it is

necessary to connect them all so the organisation presents a single face to the customer. By breaking

down the silos of the organisation and tying together all the front office systems that touch the customer,

information about the customer flows freely across the various business units. This free flow of

information allows the organisation to develop a closer relationship with the customer, providing a more

individualised service and enhancing the customers experience. The practical implications of the

customer-centric organisation include the need to be able to:

Respond to customer contact in a way that deepens relationships with customers with the aim

that a satisfied customer is happy with the result of a single transaction; a loyal customer buys

not once but repeatedly and even becomes an ambassador preaching the virtues of the

organisation to others. This holds true for both private and public sector organisations;

Private sector companies stand to differentiate themselves in the marketplace if they put the

customer at the heart of their strategy and approach rather than design around internal

organisational structure.

Develop a customer-centric culture that supports customer facing individual by giving them

access to up-to-the-minute information on both services and transactions that are complete or in

progress;

Design the structural core of the organisation and not just services using customer focused

design principles; and

Unify the organisations front office functions and integrate them to back-end computer systems

to create a single interface for the customer.

A2.4 Market Analysis

There are three areas of consideration in market analysis:

Environment: Strategy does not originate in a vacuum. To understand a companys strategy, it is

important to explore the competitive situation, industry, economic and industry trends, technology,

regulations and demographics that impact the organisation. he extent of these impacts looking across

all organisational factors needs to be fully understood to ensure that appropriate action can be

identified to align the changes;

Growth strategy: Organisations attempt to succeed by developing strategies for growth. It is important

to understand how the company has grown historically and how it is positioning itself for growth in the

future. The existing asset base and the organisations access to capital are either enablers of growthor constraints of any growth strategy; and

Competitive strategy: To succeed companies must compete. The competitive strategy dimension

considers how an organisation creates and protects value. Competitive advantage is formed by an

organisations mission, values and goals. Organisations also leverage what they do best to formulate

and execute a competitive strategy.

Questions to consider when understanding competitive strategy include:

Where is the organisation positioned in its chosen markets?

Is the organisations competitive strategy one of cost leadership, product innovation, or customer

intimacy? Does the organisation lead or follow the market?


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A2 i: Updated transformation principles (with

customer / market insight)

Revised set of transformation principles to underpin the

transformation

Benefits

An understanding of the customer requirements and verification of their alignment with the principles of

transformation.


An approach to polling customers to capture high level requirements.


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A3 Consider Operational Locations

Purpose

To consider the optimum operational locations for the future business operations taking into account

considerations such as market forces, globalisation and other international considerations.

Overview

This task is used to consider the implications of the transformation principles and emerging business

strategy on operational locations.

Interdependencies

Interdependencies

B10: Transformation Vision Clarity on the current transformation vision

Inputs

Inputs

A2 - i: Updated Transformation Principles (with

Customer Insight)

It is important to have an understanding of both customer needs

and markets to inform decisions on operational locations

Task Description

Tasks

A3.1: Translate business strategy into location

requirements

Assessing the location constraints and opportunities of each aspect

of the emerging business strategy

A3.2: Vision of future operating locations High level vision of broad geographical arrangement of operations

A3.1 Translate business strategy into location requirementsThe geographical deployment of resources and activities should be derived from the business strategy.

At this stage the assessment of physical location will be driven by the transformational principles and

emerging business strategy. The location implications should be considered for each aspect of the

emerging strategy or transformation principle.

To a large extent the locations of business units will be driven by organisational logic. For instance, units

can be more or less rigidly organised by activity (a functional-based design), by output (as in organisation

by product line) or by customer (organisation by market segment or geography). The location constraints

and opportunities for each aspect of the structure should be identified at a high level. Some units may be

autonomous whilst others will be highly constrained in terms of location.

Factors influencing location include:

New or existing markets likely to see growth;

Speed to market;

Labour pools with relevant skills;

Cultural fit;

Industrial relations (e.g., the impact of redundancies arising from relocation on workforce

relations).

Access to finance;

Tax, legal and regulatory environment;


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Current locations and the cost of relocation;

Cost of production;

Industry clusters;

Proximity to raw materials;

Communications and accessibility;

Geopolitics and stability;

Business continuity; and

Legal factors in maximising benefits in certain jurisdictions.

An organisations physical locations will also be influenced by the operating models adopted e.g.,

outsourcing, alliances and joint ventures. Depending on the degree of control required by the

organisation, location decisions for aspects of the business may be transferred to business partners.

A3.2 Vision of future operating locations

Use the identified constraints and opportunities to develop a vision for the future operating locations.Where units are autonomous, an initial list of location options will need to be narrowed by assessing

against relevant criteria, many of which will be drawn from the headings set out above at A3.1.



A3.2 Vision of future operating locations A description of the broad geographical distribution of future

operations, drawn from consideration of the location constraints

and opportunities flowing from the transformation principles and

emerging business strategy.

Benefits

An early indication of possible new operating locations and surplus locations.


The key determinants of location as applied to the organisations specific business.


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A4 Legal, Regulation and Internal Boundaries

Purpose

To investigate and confirm if there are any legal, regulatory or internal constraints or drivers to the

transformation principles.

Overview

This task involves a discussion with legal representatives from the organisation to determine if there are any

current or planned legal constraints that could be applicable to the transformation programme. This task

should also involve discussions with organisations within the organisation responsible for setting internal

boundaries (codes of conduct, internal policies etc) that frame the voluntary boundaries the organisation

must stay within in meeting its objectives.

It is also important to take into consideration regulatory issues. Typical questions may include:

Is the desired organisational vision aligned with international and territory legal structures?

Are there any immediately obvious legal barriers which could obstruct the transformation, or alternativelylegal factors which could help the transformation and how it is undertaken?

Are there regulatory requirements that need to be taken into account?

Are there internal boundaries (codes of conduct, internal policies etc) that need to be considered as

either a driver or constraint for transformation?

How does the organisation currently define its risk appetite?

Interdependencies

Interdependencies

C Creating the transformation Baseline Establishing the baseline from which to establish the transformation

B10: Transformation vision Clarity on the current transformation vision

Inputs

Inputs


measures and targets, current improvement initiatives etc..




A1 i: Transformation Principles The set of principles that underpins the business transformation

Task Description

Tasks

A4.1 Legal constraints and drivers Understanding with legal or policy representatives what theconstraints and drivers are to the transformation


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A4.2 Regulatory Issues Understanding on the regulatory environment that the organisation

is operating within.

A4.1 Legal Constraints and DriversThe legal constraints and drivers are a key input to the objectives of the transformation. This Step is

about understanding, through discussion with legal or policy representatives, what the constraints and

drivers are to transformation. To achieve this step, interviews are conducted and any updates to the

transformation principles are made based on specific requirements.

For example, a business which manages large amounts of customer data will need to address data

protection / privacy law requirements. Whilst these should not prevent the project taking place, they may

influence the chosen structure and steps taken to influence it.

A4.2 Regulatory IssuesLaws in certain countries may provide a benefit to the project e.g., using third party rights to help

enforceability of contracts in a structure which otherwise gave third parties too much scope for reneging

on the original deal. Compliance with regulatory bodies is mandatory in both the public and privatesectors and failure to satisfy regulatory requirements can lead to significant fines and reputational

damage. In the aftermath of the high-profile scandals that have hit the international business world in the

past few years, corporate compliance is not a casual optionits a matter of survival.

Through discussion with regulatory representatives, understand the regulatory environment that the

organisation operates in. Identify relevant regulators, understand the regulators remit and power and

determine the activities that the organisation is currently undertaking to ensure compliance.




Legislative & Regulatory Requirements)

Revised set of transformation principles to underpin the

transformation

Benefits

An understanding of constraining factors or opportunities for transformation as specified by policy,

regulatory or legal issues.

Early consideration of feasibility issues (see section A5.2)


The process of challenge in a legal or policy context.

Understanding impact on a project and how these issues have been met in the past or might be

overcome in future


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A5 Legal Structures & Taxation

Purpose

To consider the optimum high level legal and taxation structures for the future business operations taking

account of considerations such as reductions in complex tax models, simplified legal company structures,

and partnerships arrangements.

Overview

In this task, questions that should be considered include:

What is the optimum legal structure for the organisation or group?

How can corporate structure and taxation models be simplified?

What partnerships or business relationships exist and how should they look in the future?

Have major third party contracts been reviewed?

Has the organisation recently re-assessed its legal entity structure? e.g., legal entity structures can be

changed to minimise tax burdens related to state and local taxes. International considerations include

the ability to minimise tax and to repatriate profits.

Is there an opportunity to benefit from structuring options such as European Companies (SEs) or use of

cross-boarder mergers to facilitate the transformations?

Interdependencies

Interdependencies


Inputs

Inputs


Operational Location Options)

Identification of potential operational jurisdictions is required to

review the legal and taxation issues.

A4 - i: Updated Transformation Principles (with Legal

& Regulatory Requirements)

Identification of potential regulatory jurisdictions is required to

review the legal and taxation issues, and review of major third party

contracts.

Task Description

Tasks

A5.1: Industry Insight A review of models that have previously been used within the

organisation industry sector.

A5.2: Evaluate and Document Evaluation and documentation of appropriate models, including

SEs or use of cross-border mergers.

A5.1 Industry InsightUsing experts within the fields of company structures and taxation to provide organisation insight on

models that are currently being used within the industry and any potential future trends.


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For example in the public sector this may include details of:

How joint ventures have been set-up;

The use of joint committees;

Charitable status and tax efficient models.

A5.2 Evaluate and DocumentEvaluate the current environment compared with industry trends. In consultation with the organisations

senior management team, agree the feasible options for the organisation. Liaise with the appropriate

experts to ensure the validity of the options. Document the evaluation and feasible options.



A5 - i: High-Level Review of Legal Structures &

Taxation Issues

A review of potential high level legal and taxation issues and

structures aligned to the operational location models.

Benefits

Early consideration of the feasible models for the organisation ensuring that later evaluation work is

targeted towards things that will work.

Early understanding of how the project might impact third parties and how they might need to be

managed.


The typical models that have been used in the past and feasible options that others have implemented.


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A6 Supply Chain

Purpose

To consider the optimum high level supply chain structures for the future business operations taking into

account considerations such as operational locations, partnerships arrangements, and lean and cost

effective models.

Overview


How should the supply chain be structured to meet the organisational location model?

How do partnerships affect the supply chain?

How should best practice lean and cost effective models be applied?

Interdependencies

Interdependencies


Inputs

Inputs



An understanding of the potential operational locations is needed to

be able to consider supply chain models

Task Description

Tasks

A6.1: Review Existing Supply Chain Review the existing supply chain and potential models

A6.2: Review Existing Partnership Models Review existing partnership network and potential models

A6.3: Evaluate & Document Evaluate feasible options and document

A6.1 Review Existing Supply ChainReview the existing supply chain at a high level by addressing questions such as:

Who are the major suppliers?

How is strategic procurement managed?

What is the stratification of suppliers like?

Is spend managed by category?

How is supply chain technology used? i.e., use of e-procurement.

Use existing best practice to discuss possible options with senior management organisation.

A6.2 Review Existing Partnership Models

The models for partnership working in the supply chain should be discussed and an evaluation of theexisting model in use within the organisation. This should include an early review of the most critical

contracts to assess how the project might impact those relationships and how that in turn might impact


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the project plan e.g., by recognising essential consents needed or requiring additional steps in the plan

which would impact timing,

A6.3 Evaluate & DocumentAn evaluation of the potential options should be discussed with the senior management teamto identify

feasible options for further review and assessment. The feasible options should be documented.



A6 - i: High Level Review of Supply Chain Issues and

Direction

A review of the supply chain issues related to the high level

operational location models.

Benefits

Early consideration of critical suppliers and vendors and how they will be impacted by the project.


Potential supply chain models and techniques.


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A7 Sourcing

Purpose

To consider the optimum high level sourcing options for the future business operations taking into account

considerations such as operational locations, partnerships arrangements, where to manufacture, make or

buy, outsourced operations.

Overview


What are the most appropriate mechanisms for sourcing?

What partnerships, business arrangements need to be in place?

Is outsourcing an option that should be considered?

Interdependencies

Interdependencies


Inputs

Inputs



Operational locations are important considerations when making

decisions on sourcing options

A5 - i: High-Level Review of Legal Structures &

Taxation Issues

An understanding of the potential legal structure of the organisation

or group may impact upon sourcing options and also local lawissues in the operational locations.

A6 - i: High Level Review of Supply Chain Issues and

Direction

Supply chain models will impact upon the sourcing options

Task Description

Tasks

A7.1: Sourcing Insights A review of models that are have previously been used within the

organisations industry sector.

A7.2: Evaluate and Document Evaluation and documentation of appropriate models.

A7.1 Sourcing InsightsUse experts within the fields of sourcing options to provide organisation insights on models that are

currently being used within the industry and any potential future trends.

For example this may include details of:

How outsourcing models work for different types of activities;

The use of the private sector and individual secondment models;

Sourcing using shared services models;

Sourcing from the third sector; and

Working with communities to deliver services.


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The impact of Transfer of Undertakings (Protection of Employment), or similar / equivalent laws in

other territories ,on arrangements

A7.2 Evaluate and DocumentEvaluate the current environment compared with industry trends. In consultation with the senior

management team, agree the feasible options for the organisation. Liaise with the appropriate experts to

ensure the validity of these options.

Document the evaluation and feasible options.



A7 - i: High-Level Review of Sourcing Issues and

Direction

A high level description of the potential sourcing options

Benefits Early consideration of the types of feasible sourcing models.


Typical sourcing models in use within the organisations industry sector.


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B Benefits, Project, Programme and Change Management

Purpose

To provide programme and project management, benefits management and transformation capability

expertise to support the change initiative. The tasks are supported by Making Change Stick to enable thechanges and benefits to be sustained after the programme is closed.

Overview

Phase B is a Cross-Life Cycle Phase that cuts across the major Stages. The tasks completed within this

Phase may be repeated though-out the lifecycle of a transformation programme. However, within each

Stage the activities undertaken are usually subtly different in inputs, dependencies and outputs.

The tasks that are referred to as Cross-Life Cycle activities are either ongoing tasks (such as stakeholder

management) or tasks that need to be started early in the project but cannot be competed until later in the

project. An example of this latter type of task is the benefits realisation process where steps related to

achieving the planned business benefits are incorporated within the overall programme plan from

programme inception but the detailed tasks and steps to realise the benefits will largely not be undertakenuntil the project post-implementation / continuous improvement phases are initiated.

It is important that early consideration is given in programme and project planning to the Cross-Life Cycle

tasks to determine which tasks should be used, when they should be commenced, which deliverables should

be produced and a definition of the sign-off responsibilities for each of the deliverables. The timing of these

tasks may vary significantly between projects and programmes. The management tasks in the Framework

which are regarded as Cross-Life Cycle tasks include:

Programme Governance considers areas such as governance structure, the roles and responsibilities

of key groups and delegation of authority;

Programme/Project Management - addresses such items as programme / project plan and Programme/ Project Initiation Documents development and maintenance, programme / project monitoring and

reporting, scope, issue, risk, dependency and assumption management;

Benefits Management - addresses the tasks necessary to ensure that the benefits are realised (includes

project visioning, Recognition Events identification, benefit valuation, Backcast Planning and linkage of

Recognition Events to benefit valuation) and may include the use of a Benefits Realisation

Programme/Project Office and Isochron Benefits Realisation technique as some of the approaches to

assist in the realisation process. Refer to B7 Agree Benefits Process for further information on Benefits

Management approaches.;

Design Authority - the key purpose of a Design Authority is to act as the business integrator who is/are

the custodian(s) of the process that will determine the solution that is to be designed, implemented and

operated. It ensures that development of the solution is in accordance with agreed business designprinciples and that a holistic approach is adopted to ensure the integration of the organisation streams of

work. Includes the definition of a common vocabulary, a common process and a common understanding

of how the transformation design will be delivered; and

Change management - the key purpose of this task is to turn potential failure of a transformation

programme into success, through the application of a number of key success factors. In addition to

Benefits and Project/Programme Management, these success factors help accelerate the delivery of

benefits and sustain changes. They include such activities as diagnosing and applying the best fit change

approach and engagement strategy, developing a transformation vision, aligning leadership to the

transformation, developing the organisation's capability to lead and deliver change (including

skills/knowledge transfer), and aligning the whole organisation (including structure, culture and ways of

working) to the transformation to enable sustainability.

In recognition of the Cross-Life Cycle nature of many of the activities included in Phase B, each Stage


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B1: Project Initiation;

B2: Project Governance;

B3: Project Management;

B4: Programme Governance;

B5: Programme Set-up;

B6: Quality Management;

B7: Agree Benefits Process;

B8: Programme Planning;

B9: Benefits Planning;

B10: Best Fit Change Approach

B11: Transformation Vision;

B12: Change Leadership & Organisational Capability;

B13: Transformation Capacity Route map;

B14: Resource Planning;

B15: Stakeholder Engagement;

B16: Communications.


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B1 Project Initiation

Purpose

To set-up and agree the initial scope, timescales, governance and objectives of the Assess Stage of the

programme (with a view to building the Case for Change for the wider transformation programme).

Overview

This task describes the steps necessary to plan and

schedule the project activities for the Assess Stage.

The mandate for completing project initiation is

usually contained within a project brief (or tender

documentation). The mandate usually covers the

scope of the Assess Stage where the business can

justify the investment required to collate the

information required to make the Case for Change

in an outline business case for the wider

transformation programme.

Various formal methodologies may be used for thedetailed work tasks and steps agreed as part of

Project Initiation (and wider Project Management

e.g., PRINCE2, the PwC Project Office Methodology

or Project Management Institute (PMI) approaches).

The project initiation and mobilisation phase is often

regarded as week 0 of a project plan. It is a critical

stage that sets the foundation for how the

organisation transformation team will operate

together and with others. A successful mobilisation

mitigates a number of common pitfalls often

associated with the early stages of a transformationsuch as:

Inconsistent messages and terminology used

between organisation team members and

stakeholders;

Ambiguous objectives and team member roles;

and

Inefficiencies during the early stages of the

project;

The activities undertaken as part of Project Initiation are documented in a Project Initiation Document (PID).

The PID is defined as developing the basis for managing the project, including the planning objectives,

deliverables, interim work products, procedures, organisation, chain of activities, resources types and

numbers, timing, routines and finances.

The purpose of the PID is to:

Allow a formal opportunity for the Project Sponsor to assess the viability of the project;

Ensure that all parties have a common and agreed understanding of the purpose of the project, the

objectives, what will be delivered and the responsibilities in achieving the stated goals. Acceptance of

this PID is taken to mean the above issues are understood and that commitment is given to providing the

resources and effort identified as necessary for successful completion of the project. In this way this PIDacts as a formal agreement between the Project Sponsor and the project team; and

Use of Project Office Methodology Detailed

Work Tasks and Steps

Summary steps only are included within this task

as the detailed work steps to prepare, maintain

and manage all of the various Programme /

Project Plan components are contained in the

Project Office Methodology in such Phases as:

Phase C - Planning and Scheduling;

Phase D - Resource Management;

Phase E - Dependency Management; Phase F - Assumption Management;

Phase G - Project Finances;

Phase H - Business Case Monitoring

and Benefits Realisation;

Phase I - Communications Management;

Phase J - Stakeholder Management;

Phase K - Project Monitoring and

Reporting;

Phase L - Risk Management;

Phase M - Issue Management;

Phase N - Scope Management and

Change Control; Phase O - Supplier Management;

Phase P - Quality Management; and

Phase Q - Knowledge and Office

Management.

For each engagement, the appropriate detailed

tasks and steps should be referenced and drawn

from the Programme / Project Office

Methodology.


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Provide a base against which any need for alterations to the project can be measured. Once the PI