The PPSO SIG Spring 2006 Conference…

1. The PPSO SIG Spring 2006 Conference…

2. Agenda

3. How to identify benefits!Benefits realisation John Zachar Principal consultant CITI Limited

4. Why should a PPSO be interested? • Strategic fit of project • Maximisation of portfolio value • Validity of business case • Resource (people) optimisation • Portfolio risk diversification / management • Demonstration of PSO proactiveness MoSCoW

5. What is a benefit? Main Entry: 1ben·e·fit Pronunciation: 'be-n&-"fit Function: noun Etymology: Middle English, from Anglo-French benfet, from Latin bene factum, from neuter of bene factus, past participle of bene facere 1 : archaic : an act of kindness : BENEFACTION2 a : something that promotes well-being : ADVANTAGE b : useful aid : HELP3 a : financial help in time of sickness, old age, or unemployment b : a payment or service provided for under an annuity, pension plan, or insurance policy4 : an entertainment or social event to raise funds for a person or cause Merriam-Webster On-Line http://www.m-w.com/cgi-bin/dictionary

6. What is a benefit? • Prince 2 Manual – no definition • Benefit: something that can be couched in measurable terms — a tangible benefit (e.g., 'a cost saving', 'more sales of existing product X', 'sales of new product Y') — or a non-tangible benefit (e.g., 'customer satisfaction'). • PMI BoK – 3rd Edition – no definition • APM Pathway – addresses benefits, but a bit nebulously • Benefits – Quantified increases in revenue, decreases in costs, reductions in working capital and / or increase in performance which occur directly as a result of a project.Project Workout, Roberet Buttrick 2nd Ed., Prentice Hall, 2000 Most projects are put in place to deliver products that will lead to benefits.e:PMguide, CITI Limited,

7. Benefits • Tangible • Intangible • Real benefits, not wishful thinking • Not over egged to attract the funding • Realisable (SMART) Risk avoidance

8. Tangible benefits • Cost avoidance • Additional revenue • New revenue

9. Intangible benefits • Strategic match • Competitive advantage • Competitive response • Management information Value linking Value acceleration Value restructuring Information Economics, Parker, Benson, Trainor, Prentice Hall, 1988

10. Impacts vs. benefits Deliverable (Product) Impact(Change) Benefit

11. Impacts vs. benefits Fault diagnosis database Deliverable Faults diagnosed over the phone Impact Fault fixed on first visit Impact Fewer visits required Impact Fewer engineers required Fewer spares required Impact Tools & Vans Lower salary expenditure Reduced inventory costs Benefit

12. Benefit realisation plan • What is the expected benefit? • What is the value / how will it be measured? • What impacts (changes) are required to realise the benefit? • When will those impacts occur? (When will the product(s) be delivered that will spawn the impacts?) • How can I verify that the benefit has actually been acquired or realised? • Who is responsible?

13. Q & As John Zachar Principal consultant CITI Limited Lovat Bank, 37 Silver Street, Newport Pagnell, Buckinghamshire, MK16 0EJ 01908 283 600 jzachar@citi.co.uk