SOLUTIONS PRESENTATIONS

1. SOLUTIONS PRESENTATIONS

2. Project Challenge – Mar 2007 Benefits Realisation Management Ensuring change adds value and delivers planned business benefits Gerald Bradley (Chairman of Sigma) 14th March 2007

3. Achieving the expected or potential benefits is not the norm • OASIG Survey Results: • 80-90% do not meet their performance goals • ~80% of systems delivered late or over budget • ~40% of developments fail or are abandoned • <40% fully address training and skill requirements • <25% properly integrate business and technology objectives • 10-20% meet all their success criteria • sigma’s View: • Most companies achieve between 10% and 25% of potential benefits from their IT Investments and change programmes • Recent survey on Benefits from IT Projects: • Only 25% of organisations are measuring benefits • Of these 25% only 25% are observing benefits in line with expectations sm260

4. Who are we (sigma)? • Pioneer of the leading methodology for Benefit Realisation Management (BRM) • Established 1986 • Specialist provider of Benefit Realisation Management consultancy, education and software • Partner to many leading private and public sector organisations

5. Banking and Financial Services Abbey National AXA Insurance Barclays Bank Bradford & Bingley Cornhill Insurance Friends Provident Hewitt Bacon & Woodrow Lloyds TSB Mellon Bank NatWest Bank UnumProvident Healthcare and Pharmaceuticals Amersham Health AstraZeneca GlaxoSmithkline sigma’s clients include: • Central Government and other Public Sector • Department for Transport • Foreign & Commonwealth Office • Highways Agency • Home Office • MOD • National Air Traffic Services • Office of National Statistics • OGC • Oil and Gas • BP • Canadian Natural Resources Limited • Shell • Police • Over 30 Police Forces • Police IT Organisation (PITO) • Scottish Police IS Group (SPIS) • Miscellaneous Private Sector • Associated British Foods • BT • General Motors • Lloyd's Register of Shipping • Orange • United Utilities

6. Benefits – why consider them? what are they? Foundations for success Be serious about realising benefits Don’t neglect ‘business change’ Begin with the vision or end goal Some proven tools and techniques Strategy Maps Benefits Maps Benefit Dependency Maps Investment Assessment Matrices Process, roles & responsibilities, available support Successful Benefit Realisation

7. Benefits – why? how? and what? • The only valid reason for investment in change is the realisation of benefits • So change should always start with benefits and end with benefits • In fact benefits should be the core of any change project – the central theme – not an afterthought • But what is a benefit – ‘an outcome of change perceived as positive by a stakeholder’ So success is the timely realisation of the expected benefits • This is not automatic, it doesn’t just happen, it must be managed – Benefit Management

8. Purpose: To improve the ROI from change What is success? - the purpose of programmes/projects Return More benefits Sustained benefits Earlier benefits Time Fewer wasted investments ChangeDirector

9. To justify? To measure? To harvest? In UK until 1990 In UK in the new millennium In UK in the 1990s Measurement Measurement Justification Justification Justification Achievement Emphasis shift Harvesting Measuring Justifying Why consider benefits?

10. External Drivers Cultural Factors Stakeholders Business Change BRM Enablers Benefits Objectives Process:Focus on the real goal - Objectives & Benefits As is Can be

11. Bridging between enablers and objectives Projects delivering Capabilities The bridges may consist of processes or changes or intermediate benefits To reduce costs Corporate or Programme Objectives To increase effectiveness To Improve deployment To speed up responses

12. Top level control Projects delivering Capabilities To increase effectiveness Centralised delivery Business unit delivery To Improve deployment Enabling Changes Intermediate Benefits Business Changes End Benefits Enablers To speed up responses Business change activities Business change activities Programme level work streams To reduce costs Business Case Project(s) Project(s) Building a programme around its benefits Corporate or Programme Objectives Benefit Realisation Plan Vision End Goal Drivers

13. An example of a ‘bridge’ which distinguishes between Features, Changes and Benefits Change in Working Practice Benefits Feature Improved succession planning Business Objective Technology Improved performance of Country Mgrs. Interactive working with Country Mgrs. Improved launch planning Electronic communication Increased sales Maximised launch impact Cross-fertilisation between Countries Information sharing Meetings Management More focused selling Shared ‘best practices’ Captured learning To Increase profit Co-authoring documents Faster resolution of pricing issues Increased margin Improved pricing Document Management Electronic discussion Increased effectiveness More focused sales force Search facilities Reduced costs Increased efficiency

14. Engage stakeholders Change Process with Review Points 1. Set vision and objectives R6 R1 2. Identify benefits and changes 6. Manage performance Strategy R5 R2 Delivery 3. Define initiatives 5. Manage initiatives 4. Optimise initiatives R3 R4

15. Use drivers to determine objectives for the change From a representative set of stakeholders gather answers to the why question - why do we want to undertake this change? Group these answers and determine group headings expressed as objectives Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Afadfyagy apsyg aoyg aoayg oayg aogy aoyg aospgy aoygoasod asysodfy ao yaoiyf aopyf Afadfyagy apsyg aoyg aoayg oayg aogy aoyg aospgy aoygoasod asysodfy ao yaoiyf aopyf Afadfyagy apsyg aoyg aoayg oayg aogy aoyg aospgy aoygoasod asysodfy ao yaoiyf aopyf Afadfyagy apsyg aoyg aoayg oayg aogy aoyg aospgy aoygoasod asysodfy ao yaoiyf aopyf Afadfyagy apsyg aoyg aoayg oayg aogy aoyg aospgy aoygoasod asysodfy ao yaoiyf aopyf Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Afadfyagy apsyg aoyg aoayg oayg aogy aoyg aospgy aoygoasod asysodfy ao yaoiyf aopyf Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Afadfyagy apsyg aoyg aoayg oayg aogy aoyg aospgy aoygoasod asysodfy ao yaoiyf aopyf Afadfyagy apsyg aoyg aoayg oayg aogy aoyg aospgy aoygoasod asysodfy ao yaoiyf aopyf Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Afadfyagy apsyg aoyg aoayg oayg aogy aoyg aospgy aoygoasod asysodfy ao yaoiyf aopyf Afadfyagy apsyg aoyg aoayg oayg aogy aoyg aospgy aoygoasod asysodfy ao yaoiyf aopyf Aaioewty 0abua spfu aspdo aps Aaioewty 0abua spfu aspdo aps Afadfyagy apsyg aoyg aoayg oayg aogy aoyg aospgy aoygoasod asysodfy ao yaoiyf aopyf

16. Confirming Programme Objectives For a programme to roll-out Benefit Realisation Management (BRM) within an organisation, clustering and linkage resulted in the following Objectives Linkage Diagram (Strategy Map). What would you choose as a set of key objectives for the programme? To produce better quality business cases To improve project prioritisation and selection To improve stakeholder management To improve benefit tracking and reporting To maximise benefit delivery from each programme To increase shareholder value To introduce a standard Benefit Management Methodology To improve business strategy To change to a more benefit focused culture To increase awareness and understanding of benefit realisation issues

17. Confirming Programme Objectives For a programme to roll-out Benefit Realisation Management (BRM) within an organisation, clustering and linkage resulted in the following Objectives Linkage Diagram (Strategy Map). These objectives are key and bound the programme. To produce better quality business cases To improve project prioritisation and selection To improve stakeholder management To increase shareholder value To improve benefit tracking and reporting To maximise benefit delivery from each programme To introduce a standard Benefit Management Methodology To improve business strategy To change to a more benefit focused culture To increase awareness and understanding of benefit realisation issues

18. 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements 2. Improved management of investment process 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements 3. Improved awareness of options 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements Creating a Benefits Map for each of the bounding objectives To improve project prioritisation and selection

19. Creating the Benefit Dependency Map from the Benefits Map 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements Hope this work s tom morrow Hope this work s tom morrow Hope this work s tom morrow 1. Improved understanding of requirements 1. Improved understanding of requirements Hope this work s tom morrow Hope this work s tom morrow Hope this work s tom morrow 1. Improved understanding of requirements Hope this work s tom morrow Hope this work s tom morrow 1. Improved understanding of requirements 1. Improved understanding of requirements Hope this work s tom morrow Hope this work s tom morrow 1. Improved understanding of requirements Hope this work s tom morrow To improve project prioritisation and selection 2. Improved management of investment process 1. Improved understanding of requirements 1. Improved understanding of requirements Hope this work s tom morrow Hope this work s tom morrow Hope this work s tom morrow Hope this work s tom morrow 1. Improved understanding of requirements 1. Improved understanding of requirements Hope this work s tom morrow Hope this work s tom morrow Hope this work s tom morrow Hope this work s tom morrow 3. Improved awareness of options 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements Hope this work s tom morrow Hope this work s tom morrow Hope this work s tom morrow Hope this work s tom morrow Hope this work s tom morrow Hope this work s tom morrow 1. Improved understanding of requirements 1. Improved understanding of requirements 1. Improved understanding of requirements Hope this work s tom morrow Hope this work s tom morrow Hope this work s tom morrow Hope this work s tom morrow

20. Benefit Classification • Benefits can be usefully classified in a number of ways. • Some frequently used classifications are: • Beneficiary - Stakeholders who will feel they receive the benefit • Benefit category - generic or family grouping • Boston Grid - Business impact • sigma Value Type - value expectation • Change Type - degree of change required for benefit achievement Classification frameworks may be used as an aid to benefit identification or to classify benefits already identified in order to aid analysis and the management of expectations

21. A Programme to roll-out BM within an organisation

22. sigma value types Value may be predicted with confidence Fewer steps in a process Reduced costs Quicker performance of tasks Value may be predicted on the basis of historic trends Increased sales Logically a change may be anticipated whose value may be measured but not predicted Improved management of insurance risk Greater customer satisfaction May be anticipated, but difficult to substantiate Improved image Example Value type Definition Financial Non-financial Tangible Definite Expected Logical Intangible

23. 4. More time spent with customers 2. Faster response to customers 8. Increased sales revenue 9. Improved networking 5. More coffee breaks 1. Fewer steps in a process 3. Improved productivity 6. Shorter working day 10. Improved staff morale 11. Reduced salary costs 7. Fewer staff Value benefits in the way they are described If the benefit is “fewer steps in a process”, the measure, which is also the value of the benefit is the number of steps in the process – the baseline may be 72 and the target 55 and the value at any point is the current number of steps in the process. It is important not to try to give this a financial value, as of itself it is not a financial benefit. It may lead to a financial benefit, which would be shown on the Benefit Map, but this depends on the intention. Based on the above map, reduced salary costs is only one of four possible end benefits, it may occur several months after fewer steps has been achieved and additional changes (e.g. making staff redundant) may be required in order to achieve this later benefit.

24. Benefit linkage chart for the whole investment Case Example Major Bank Improved customer service Improved image Fewer complaints More high value customers Fewer errors Less unpaid overtime Improved staff morale More high value sales Customer database and sales processing system Easier sales processing More quality time with customers Increased productivity Better information on customers and sales profitability More focused selling

25. Four reasons for tracking all / most of the benefits in the Benefit Linkage Chart • To know that a change in the end benefit can be attributed to the project/programme • To know that all paths in the linkage chart are operating in order to generate the maximum improvement in the end benefit • To satisfy the needs of different stakeholders - e.g. sales processing; customer relations; HR • To have some interim milestones, rather then waiting two years to see whether the sales had improved

26. Predictive model Value of the measure Target Baseline M2 Target Baseline M1 T1 T2 T3 T4 Time Don’t try and be more sophisticated than this in your predictions and use months (or preferably quarters) as your minimum time interval

27. Tracking the benefits

28. Software supports RAG Status(including on Benefit Linkage Charts) Case Example Major Bank Improved customer service Improved image Fewer complaints More high value customers Fewer errors Less unpaid overtime Improved staff morale More high value sales Customer database and sales processing system Easier sales processing More quality time with customers Increased productivity Better information on customers and sales profitability More focused selling

29. Obtaining further help The book gives a very full and comprehensive treatment of benefit realisation with application to projects, programmes and portfolios. The book, published in June by Gower @ £55, is available from Sigma’s stand today @ £48.

30. Complete toolkit: • Methodology A consistent, comprehensive, flexible and scaleable process • A circular process which can be entered at any point • A proven process tested in many different environments • A bag of many different techniques to suit a wide variety of situations • Education Education to change mindset • War stories from a diverse variety of organisations • Consultancy To embed the approach in the behaviours and culture of the organisation • Workshop facilitation to engage stakeholders and secure commitment • Partnership consultancy to transfer skills through whole life-cycle • To advise and mentor in unusual and complex situations • Training To introduce an extensive set of techniques. • To give guidance as to their use - why? when? how? • Software To manage the data, in order to: • Improve the quality and consistency of information • Analyse and prioritise solution options • Manage cross-programme dependencies • Monitor programme and portfolio performance

31. Some good news Benefit Realisation Management (BRM) can and does make a difference Instead of 20% of potential benefits you could be enjoying at least 80% of potential benefits

33. SOLUTIONS PRESENTATIONS