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© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 1
“Benefits-led” Portfolio Management: An IntroductionJanuary 2010
Daniel Fishere:
t: 07906 351008
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 2
“Benefits-led” Portfolio Management Introduction
What is it?– Features– Decisions enabled– Difference from “traditional” approaches
Business Case for “Benefits-led” Portfolio Management
Key Implementation Considerations
How Cambiel Can Help
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 3
Introduction
“Traditional” portfolio management has existed for some time:– Difficult to find case history of success– “Bottom-up” approach to tracking cost & risk (sometimes to exclusion of
benefits) perceived as bureaucratic & non- value-adding in many organisations
“Benefits-led” approach emerging as more strategic alternative:– Compelling business case– Focus on value and benefits increasingly important in period of economic
constraint– As Programme and Project Management becomes more mature, gap between
business change activity and corporate strategy is highlighted
Portfolio management finally offering genuine opportunities to “invest to save” and “invest to accumulate”
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 4
About Cambiel & Sigma
Leaders in “benefits-led” approaches to managing change portfolios and programmes
Responsible for some of the largest benefits realisation implementations across public and private sectors
Expert in training, coaching and facilitating “benefits-led” mindset, tools & techniques
More details at www.cambiel.co.uk
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 5
Portfolio Management - What Is It? A portfolio is more than just the sum total of
programmes and projects. It provides a decision-making framework for optimising the necessary contribution of change to your business strategy. It is not just a reporting overlay on top of your programmes and projects.
Portfolio management is the process of:– Ensuring that you are doing the “right” things (driving the contribution of
business change to your strategy), not just doing things well– Engineering the optimum combination of programmes and projects to
maximise value (and minimise waste)– Monitoring and managing the performance of your change investments
at a strategic level
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 6
Portfolio Management - What Is It? The OGC says that Portfolio Management is a “co-
ordinated collection of strategic processes and decisions*”. Some key features:
Increase sales
Reduce costs
Develop staff
Business As Usual
Business Change
(Projects & Programmes)
Corporate Performance Managemen
t
Benefits-led Portfolio
Management
Business Strategy
• Managed at corporate level, in a similar way to, but additional to, Business As Usual performance management
• Bridge between top-down strategy & bottom-up business change delivery
• Proactive control mechanism for executive
*OGC Portfolio Management Guide Crown Copyright
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 7
Portfolio Management - What Is It? Benefits-led Portfolio Management is the rapidly-
emerging alternative to Portfolio Management in recent practice
It addresses the bureaucratic pitfalls which organisations have encountered
By building your portfolio around benefits* realisation you can achieve its full potential value (e.g. genuinely increased efficiency and effectiveness), rather than just manage its timeliness and cost
– Most effective balance of business change and business as usual– Optimised Return on Investment from projects and programmes– Reduced waste from poorly conceived, planned & implemented change
*Measurable outcomes of change perceived as positive by stakeholders
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 8
What Is It? - Features
•Defines overall contribution of change to strategy•Prioritises benefits required to achieve contribution•Makes decisions on commissioning, de-commissioning, sequencing and clustering of initiatives• Monitors overall Benefit Delivery Confidence (and Capability Delivery Confidence by exception) & takes mitigating action
Benefits-led PortfolioManagement
ProgrammeManagement
• Coordination of Project Delivery, change, dependency and risk management
• Measurement of Results & Benefits
Strategic
Tactical
Natureof
Work ProjectManagement
• Budget• Schedule• Resources
• Scope• Risks• Metrics
Scale/ Scope of Initiatives
Relationship to Programme and Project Management
Source: Adapted From New York City Housing Authority and Cisco Systems
Not just a “bolt-on” overlay to PPM but a strategic decision-making process
OUTPUTS
OUTCOMES
BENEFITS
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 9
What Is It? - Features
Permanent support function provides “top-down” strategic analysis and executive assurance, and “bottom-up” support and appraisal to programmes throughout change delivery lifecycle:
Bu
sin
ess
Stra
teg
y
Driv
ers
: PES
TEL
Pre-Commissioning:•Desirability & Strategic Fit•Affordability•Feasibility
Contextual Commissioning:•Investment Appraisal•Delivery Confidence
Even
ts &
O
ccu
rren
ce
s
• Change Delivery
• Benefits Realisation
• Transition to Business As Usual
Business Planning
In-year delivery
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 10
What Is It? - Features
An underpinning portfolio model enables complex decisions to be visualised – showing cause-and-effect of the chosen course of action
Improve productivity
Reduce Headcount
Increase Effectiveness
Both?
OR
OR
Strategy Alignment?
Implement Systems Project
Implement Business Change Project
Combine systems & change projects to deliver
capability programme
OR
OR
Visualising decisions also
aids communication and stakeholder
buy-in
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 11
What Is It? – Decisions Enabled
Bu
sin
ess
Stra
teg
y
Driv
ers
: P
ES
TEL
Pre-Commissioning:•Desirability•Affordability•Feasibility
Contextual Commissioning:•Investment Appraisal•Delivery ConfidenceE
ven
ts &
O
ccu
rren
ces
• Change Delivery• Benefits
Realisation• Transition to
Business As Usual
Business Planning
In-year delivery
• How should change investment develop to support strategy?• What impacts are
likely to occur in the short, medium and
long-term?
• Overall net benefit yield?
• Engineer programmes to
increase it? – e.g. by coordinating
benefit-related dependencies?
• Key costs and impacts?
• Consolidate, sequence and/ or
stop programmes to minimise
unnecessary impact & maximise gain?
• Actual or predicted benefits, cost or risk
exception?• Stop, start, re-sequence, cluster or
consolidate programmes to
mitigate?
• Commission programmes into the context of the
Portfolio – not just standalone business cases.
• Reduce double-counting & increase confidence in
delivery
Create “what-if” scenarios to aid yield and cost planning
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 12
What Is It? – “Benefits-led” approaches vs. “traditional” portfolio management
o “Traditional” Portfolio Managemento Often better at reporting cost & risk
than benefits o Benefits can be a “bolt on” to
programmes to justify spendo Often retrospective – e.g. focusing on
last quartero Sometimes bureaucratic, focusing on
reporting rather than decision-makingo May be focused on “outputs” (e.g.
products from a programmes)o Business case process may not be
integrated with Portfolio Management, and may be “case by case” (ineffective)
o Often derived “bottom-up,” driven by project & programme delivery functions, & utilising project-level metrics
o Governance focused primarily on project delivery
o “Benefits-led” Portfolio Managemento Reports benefits, cost & risk – i.e. Return on
Investment/ Value for Moneyo Benefits central to design, management &
success of Portfolioo Predictive – e.g. anticipating risks to
benefits from external eventso Strategic analysis & decisions: reporting by
exception. Self-funding through value added
o Focused on “outcomes” & business changes required to deliver them, as well as “outputs”
o Replaces current business case/ investment appraisal processes with a more strategic, contextual approach
o Developed “top-down” by and for executive. Driven by strategic decision-making, not by ease of gathering existing project information
o Governance focused primarily on benefits delivery
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 13
The Business Case
“Benefits-led” Portfolio Management:– Reduces existing spend by stopping and/or consolidating programmes
unlikely to yield a return, or which could do better as part of another initiative
– Controls ongoing spend by investing only in initiatives with an appropriate return (judged in the context of the Portfolio, not just business-case by business-case)
– Reduces duplication and waste – programmes designed around benefit-related dependencies (e.g. “enabling” project becomes part of “business change” programme, eliminating a project management overhead)
– Reduces duplication and waste - coordinates impact of change on the business, reducing “change for change’s sake”
– Introduces greater objectivity, scrutiny and accountability into investment appraisal and selection – reducing “pet project syndrome”
– Focuses investments on achieving the “right” commitment and behaviours amongst stakeholders to generate genuine and sustainable improvement
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 14
The Business Case
Fundamentally, this is just Good Management!– Relevant skills normally exist in-house– Possible to make a one-off investment in skills, processes
etc. to “kick-start”– Process should be self-funding (through ongoing avoidance
of unnecessary cost and waste, and continued value realisation)
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 15
Implementation Approach
Treat as a “benefits-led programme”!
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 16
Key Implementation Considerations Cultural:
– “Delivery” mindset of requirement to demonstrate genuine strategic fit
– “Pet projects”– Business ownership and accountability for benefits– “Balanced” view of benefits – e.g. non-financial and financial
Process & Infrastructure:– Avoid perceived bureaucracy– “Benefits catalogue” to track and manage value at Portfolio
level– “Architecture” of business activities to minimise unnecessary
change
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 17
Key Implementation Considerations Resource:
– Permanent central team: skilled at strategic analysis; knowledgeable about programme management and financial management
– Not necessarily traditional “project office”– Effective Portfolio Executive – ideally leadership team or sub-
group
Information & Technology:– Project-level metrics (time, cost, quality, risk) insufficient to
enable strategic portfolio decisions: requirement for new dataset (Benefits Delivery Confidence)
– Ensure currency of information whilst minimising unnecessary data burden
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 18
Summary
“Traditional” portfolio management has existed for some time:– Difficult to find case history of success– “Bottom-up” approach to tracking cost & risk (sometimes to exclusion of
benefits) perceived as bureaucratic & non- value-adding in many organisations
“Benefits-led” approach emerging as more strategic alternative:– Compelling business case– Focus on value and benefits increasingly important in period of economic
constraint– As Programme and Project Management becomes more mature, gap between
business change activity and corporate strategy is highlighted
Portfolio management finally offering genuine opportunities to “invest to save” and “invest to accumulate”
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 19
How Can We Help?
• Using a “maturity model” approach, we will help you to articulate the benefits of this approach to you and to your organisation
• We will help you to plan and achieve the benefits, through enabling you to generate a self-sustaining momentum
• We will underpin this with a customised set of industry-leading processes and tools. This is not about software (although itmay be useful down the line), but about a new model of benefits-led decision-making
• “Do it • Train it • Support it • Put it Right • Review it • Assure it”
Business Area: Prevent Crime and Disorder
IMPACTOverarching Command &
Control Doctrine
PIP ANPRMIP
Programme
Communicate positively with
the public
Identify threats
Protect vulnerable
people
Locate missing persons
Promote road safety
Monitor threats
Patrol Neighbourhood
s
Harden potential targets
Dissuade potential offenders
Provide expert consultancy to
partners
70 days
Scale of Impact
No. of People in Impacted Roles
1,000 PCs 5,000 I nspectors
Primary I mpact on Business Processes
Communicate positively with
the public
Identify threats
Protect vulnerable
people
Locate missing persons
Promote road safety
Monitor threats
Patrol Neighbourhood
s
Harden potential targets
Dissuade potential offenders
Provide expert consultancy to
partners
Primary I mpact on Business Processes
Communicate positively with
the public
Identify threats
Protect vulnerable
people
Locate missing persons
Promote road safety
Monitor threats
Patrol Neighbourhood
s
Harden potential targets
Dissuade potential offenders
Provide expert consultancy to
partners
Primary I mpact on Business Processes
Communicate positively with
the publicIdentify threats
Protect vulnerable
people
Locate missing persons
Promote road safety
Monitor threats
Patrol Neighbourhood
s
Harden potential targets
Dissuade potential offenders
Provide expert consultancy to
partners
Primary I mpact on Business Processes
Communicate positively with
the public
Identify threats
Protect vulnerable
people
Locate missing persons
Promote road safety
Monitor threats
Patrol Neighbourhood
s
Harden potential targets
Dissuade potential offenders
Provide expert consultancy to
partners
Primary I mpact on Business Processes
10 days
Scale of Impact
No. of People in Impacted Roles
1,000 PCs 3,000 I nspectors
50 days
Scale of Impact
No. of People in Impacted Roles
500 Sergeants
7,000 PCs
80 days
Scale of Impact
No. of People in Impacted Roles
40 Superintendents
500 Sergeants
40 days
Scale of Impact
No. of People in Impacted Roles
20,000 PCs
5,000 Police Staff
Cost of Business Change to Forces
Cost of Business Change to Forces
Cost of Business Change to Forces
Cost of Business Change to Forces
Cost of Business Change to Forces
££ £ ££££ ££ £££££
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 20
What’s the first step?
• We recommend an Initial Portfolio Review using our maturity model derived from P3M3 with additional benefits realisation focus
• The review will allow you to position your organisation on the spectrum of how “benefits-led” you need to, or would like to become. This will help to define the scope and scale of your potential change programme – from small and un-daunting to larger and challenging.
• Whatever you conclude, we are here to support you.
• “Do it • Train it • Support it • Put it Right • Review it • Assure it”
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 21
Selected Clients & Case History
– Associated British Foods plc
– Criminal Records Bureau
– DCSF/BECTA
– Metropolitan Police Service
– Ministry of Justice NOMS
– Home Office
• IMPACT Programme
• Information Assurance Programme
– National Policing Improvement Agency
• Mobile Information Programme
• Portfolio Development Unit
• Technology Product Management Unit
• ISIS Programme
• Forensics21 Programme
• Equality and Diversity Strategy
– UK Borders Agency
Large National Portfolio:
c. £180m p.a. spend
High profile national IT & business change programmes
No method of coordinating, aligning or stopping programmes. Considerable duplication & waste.
Cambiel team provided end-to-end process & tools, data collection & analysis, strategic review,
governance recommendations & mentoring on new approach.
Complete overhaul of commissioning & investment appraisal. Fewer programmes
started, more being stopped and/or consolidated into more effective units. Complex multi-agency
governance has complete visibility of the Portfolio for the first time. Can now make
forward-looking decisions about prioritisation & resource allocation.
Approach cited as “good practice” by OGC
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk Slide 22
e: [email protected] t: 01449 737867 www.cambiel.co.uk
20-22 Bedford Row, London WC1R 4JS
Questions and Further Information?