Benefits and better business cases_Alan Brown and Stefan Sanchez
-
Upload
association-for-project-management -
Category
Business
-
view
337 -
download
0
Transcript of Benefits and better business cases_Alan Brown and Stefan Sanchez
Presentation:
• The business case and benefits in practice
• Are we being too scientific about benefits management?
• What is the relationship between the business case process and programme/project management?
What is a Better Business Case?
• A flexible, pragmatic and common sense approach for supporting business decisions in a wide range of contexts
• The Better Business ‘Five Case Model’ jointly developed by HM Treasury and Welsh Government
• Investments £5m+ a Three stage process• Strategic outline case (SOC)• Outline Business Case (OBC)• Full Business Case (FBC)
• Provides decision makers with confidence and assurance that they are making the right decisions (business assurance) and in the correct way (programme and project assurance)
Better Business Cases ask 5 Key QuestionsHigh level benefits identified
Detailed quantification of benefits
Refinement of benefits through market testing
Balance sheet impact and timing of cash releasing benefits
Management of benefits delivery
Practical Application
About the Programme
• £1.4 billion investment programme 2014-2019
• Funding split 50% WG / 50% LA’s
• All 22 Welsh LA’s participating
• Reduce Surplus Capacity
• Improve Educational Outcomes
• Reduce overall running and lifetime costs
150+ New / improved Schools
Programme Business Case
(PBC)
Outline Business Cases (OBC) and Full Business Cases (FBC)
Programme delivery
Identify Refine & prioritise
Quantify and profile
Deliver and manage
Programme Business Case
(PBC)
Outline Business Cases (OBC) and Full Business Cases (FBC)
Programme delivery
Identify Refine & prioritise
Quantify and profile
Deliver and manage
Clear identification of high level direct and indirect benefits
Priority benefits identified (20% that represent 80% of value)
Approach to quantification
Benefits strategy content
Strategy reviewed and updated as appropriate
Strategy reviewed and updated as appropriate
Programme Business Case
(PBC)
Outline Business Cases (OBC) and Full Business Cases (FBC)
Programme delivery
Identify Refine & prioritise
Quantify and profile
Deliver and manage
Clear identification of high level direct and indirect benefits
Priority benefits identified (20% that represent 80% of value)
Approach to quantification
Benefits strategy content
Benefits action plan
content Stakeholder engagement plan to commence
‘benefits discussion’
Apply metrics to direct and indirect benefits
Approach to direct and indirect benefits (% claim)
Continued stakeholder liaison and build compelling narrative
Profile priority benefits
Record benefits profiles in economic analysis (and financial analysis where appropriate)
Clear delivery plans set up with SMART actions and clear ownership/responsibility for benefits realisation
Articulation of benefits review cycle and likely changes to action plan over time
Strategy reviewed and updated as appropriate
Strategy reviewed and updated as appropriate
Programme Business Case
(PBC)
Outline Business Cases (OBC) and Full Business Cases (FBC)
Programme delivery
Identify Refine & prioritise
Quantify and profile
Deliver and manage
Clear identification of high level direct and indirect benefits
Priority benefits identified (20% that represent 80% of value)
Approach to quantification
Benefits strategy content
Benefits action plan
content Stakeholder engagement plan to commence
‘benefits discussion’
Apply metrics to direct and indirect benefits
Approach to direct and indirect benefits (% claim)
Continued stakeholder liaison and build compelling narrative
Profile priority benefits
Record benefits profiles in economic analysis (and financial analysis where appropriate)
Clear delivery plans set up with SMART actions and clear ownership/responsibility for benefits realisation
Articulation of benefits review cycle and likely changes to action plan over time
Strategy reviewed and updated as appropriate
Strategy reviewed and updated as appropriate
CRBcash releasing
benefits
nCRBFinancial non-
cash releasing benefits
QBQuantifiable
benefits
nQBNon-
quantifiable benefits
Cannot be counted or valued (£)
Valued (£) but not ‘hard cash’
Can be counted but not valued (£)
‘Hard cash’ (£)
Reflected in: bottom line/balance sheet
(financial case)Economic analysis (economic
case
Reflected in: NPC/V Economic analysis
(economic case)
Reflected in: Economic analysis
(economic case)
Main Stakeholder beneficiaries
Benefit no.
Main Benefit CriteriaBenefit
category
Learners
B1 Improved learning outcomes QB
B2Appropriate pupil-teacher ratio and reduced age ranges within individual classes
QB
B3 Improved social and sporting opportunities Qual
B4 Improved appropriate and flexible learning environment QB
Community
B5 Increased community engagement Qual
B6Opportunity to raise awareness of the Welsh language and Welsh-medium provision in the locality
Qual
B7 Sustainable primary education in the area Qual
Staff
B8 increased staff morale and wellbeing Qual
B9Improved professional development opportunities and job security for teachers
Qual
B10Reduced age range of learners and reduction in current range of abilities
QB
B11 Improved leadership and governance Qual
Local Authority
B12 Reduction in backlog maintenance Non-CRBB13 Reduction in staffing costs CRBB14 Reduction in premises running costs CRB
B15 Less administrative burden, servicing reduced governance Non-CRB
B16 Reduction (and/or mitigation) of pupil transportation costs CRB
B17Meeting best practice and regulatory standards for learning environments
Qual
No. Benefit criteriaweight
Option 1
Option 2 Option 3 Option 4 Option 5
score
W x S
score
W x Sscore
W x Sscore
W x Sscore
W x S
B1 Improved learning outcomes 19 0 0 8 152 9 171 9 171 9 171B2 Appropriate pupil – teacher ratio and reduced age
ranges within individual classes12 0 0 7 84 7 84 7 84 7 84
B3 Improved social and sporting opportunities
8 0 0 4 32 5 40 5 40 5 40
B4 Improved appropriate and flexible learning environment
9 0 0 7 63 9 81 9 81 9 81
B5 Increased community engagement 6 0 0 3 18 6 36 6 36 6 36B6 Opportunity to raise awareness of the Welsh language
and Welsh-medium provision in the locality6 0 0 5 30 5 30 5 30 5 30
B7 Sustainable primary education in the area 12 0 0 7.5 90 8.5 102 9 108 9 108B8 increased staff morale and wellbeing 9 0 0 8.5 76.5 9 81 9 81 9 81B9 Improved professional development opportunities and
job security for teachers7 0 0 6 42 7 49 7 49 7 49
B10 Reduced age range of learners and reduction in current range of abilities
- - - - - - - - - - -
B11 Improved leadership and governance 12 0 0 5 60 6.5 78 6.5 78 6.5 78 TOTAL 100 0 647.5 752 758 758
Are we being too scientific about benefits management?• Quantify and claim the 20% of benefits that represent 80% of
the value• Is this the right approach?
Invest in Public Health
smoking cessation campaign
Reduced number of
smokersLeads to Leads to
Improved health of x
people Leads to Less GP
visits (£)
Less treatment of smoking
related diseases (£
£)
Improved public
knowledge of the dangers of smoking
Leads to
Reduction in work lost time (££££)
Can we claim these benefits?
Measure public
knowledge before and
after – reasonable to assume majority of
increase due to the
campaign
Assumes increased
knowledge translates
into changed behaviour – tenuous to assume this is due to the
campaign
Assumes health improvement due to smoking cessation but could be due to: • The campaign• Reduction in
disposable income
• Tax increase on cigarettes
• Increased physical activity
Assumes £ benefits due to improved health but could be due to:• Busier at
work• More
effective treatments
• Improved economy and work availability
Solution?
• Focus on paying for the scheme with direct benefits (anything over and above this is a bonus)
• Work with stakeholders to develop a convincing narrative for the large indirect benefits
• Encourage investment decisions to be taken with the full understanding that indirect benefits cannot be controlled
• Measure programme/project success on delivery of clearly articulated outcomes (spending objectives)