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300304 1
Benefits Realisation
In RBBC projects
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Benefits in Projects
• We invest in projects because of the perceived Benefits they bring
• The Benefits justify the project– Linked to Corporate Objectives & Priorities– Can be wide-ranging
• Statutory, Social, Economic…
– Often financial (but not exclusively)– Sometimes hard to measure
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Financial Benefits
• Time saved, posts lost, costs avoided, costs reduced…– Calculate a £ figure– Work out timing (investment & saving)
• Payback (in years)– When Savings equal Investment
• NPV (Net Present Value)– A common measure of a project’s value– Cash flows adjusted for time they occur– Using a 5% discount rate
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Non-financial Benefits
• Is this a Corporate priority?• Look for a performance measure
– BVPI– Other PI
• Measure– Value at start of project– Predicted value at end of project– Actual value at end of project
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Organisation Development
• The four pillars of Change– Driven by the Customer– Improving our Performance– Learning & Developing– Optimising our Finances
• These describe the type of organisation we want to be
• Each project has to contribute
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Later Benefits
• Project puts a capability in place– To be exploited by a later project
• Must link these projects– Is funding in place for later project?– Are we committed to later project?– If not, investment in first project may be wasted
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Later Benefits
• Project delivers as expected– But Benefits only measurable later
• Need to link to process– What process?– The owner?– When and how to measure?
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Realising Benefits
• Financial saving– Remove £ from next year’s budget
– Saving included in formal budget setting process
– Clarity about what was saved where
• Posts lost– At risk register
• Identify the staff affected, communicate
– Process based on existing Council policies• Consultation, redeploy, retrain … redundancy• Minimise redundancy costs
– Affects timing of realisation of Benefits
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Tough decisions
• Cost envelope– We must stay within this
• Headcount and Budget– We need to manage both
• May require restructuring– New ways of working may mean changes to
some organisation structures
Periodic reporting to Members