Beneits Realisation Management Framework · BRM Principle P3M3 – Level 2 P3M3 – Level 3 1....

Benefits Realisation Management Framework Part 4: Tailoring

V2 | October 2015

Benefits Realisation Management Framework | PART 4 | October 2015

Table of contents

1. Benefits Realisation Management 3 Framework

2. Tailoring your organisation’s Benefits Framework

4

2.1 What is Tailoring? 4

2.2 Tailoring the NSW Benefits Framework to your Organisation

4

3. Tools 9

Copyright

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“Benefits Realisation Management Framework” Parts 1-5. An electronic version of this document is available at https://www.finance.nsw.gov.au/publication-and-resources/benefits-realisationmanagement-framework

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© State of New South Wales through Department of Finance, Services and Innovation 2015.

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https://www.finance.nsw.gov.au/publication-and-resources/benefits-realisation-management-framework

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1. Benefits Realisation Management Framework

This document is part of the NSW Government Benefits Realisation Management framework. The structure of the framework is as follows:

Part 1: Principles

Part 2: Process

Part 3: Guidelines

Part 4: Tailoring

Part 5: Glossary

The purpose of the Benefits Realisation Management Framework is to provide:

• a framework of best practice principles and concepts drawn from latest experiences and proven practice in setting up and managing programs that is transferable across NSW agencies

• a standard approach for benefits realisation management for anyone not familiar with the subject matter, including program directors and managers, change managers project managers, business analysts and program management office (PMO) staff across NSW Government

• consistent terminology and benefits categorisation

• introduction and guidance for program sponsors and business benefit owners.

The framework:

• is aimed at those who are interested in benefits realisation within agencies, enabling them to adapt and tailor the guidance to their specific needs

• must be accessible by strategy groups, operational business areas and program/ project teams as well as by individual practitioners and business benefit owners

• should help PMO practitioners improve their decision making and become better at implementing beneficial change.

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2. Tailoring your organisation’s Benefits Framework 2.1 What is Tailoring? Tailoring a framework within an organisation is essential to optimise its use and its value. A tailored framework is aligned to the specific environment an organisation operates in and strikes the balance between efficient but effective governance. To achieve this balance, consideration of the factors that influence the delivery of a project and its outcomes is required (e.g. organisational maturity, project size, complexity, priority and risk).

The goal of tailoring a framework is generate efficient process and deliverables while providing appropriate control given the above influencing factors.

2.2 Tailoring the NSW Benefits Framework to your Organisation While the NSW Government Benefits Framework provides best practice processes and deliverables, an organisation is encouraged to tailor the framework to maximise its application. The following are some key areas to consider when tailoring your organisation’s Benefits Framework:

2.2.1 Tailoring Benefit Realisation Management (BRM) principles The BRM principles are always to be applied when managing benefits. The principles will act as a guide for an organisation when tailoring the governance required to successfully manage benefits. The degree to which the principles are applied to the processes and guidelines will depend on the organisation’s specific maturity and the specific environment the project or program is operating in.

The table on the following page suggests how the BRM principles may be applied depending on an organisation’s P3M3 BRM Maturity level.

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2. Tailoring your organisation’s Benefits Framework (cont.)

2.2.1 Tailoring Benefit Realisation Management (BRM) principles (cont.)

BRM Principle P3M3 – Level 2 P3M3 – Level 3

1. Benefits management starts by Potential use of benefits mapping Consistent use of benefits mapping defining the program/project for large projects to ensure the to identify and understand the objectives and the benefits they outputs produced will achieve the relationship between project deliver desired outcomes. outputs, outcomes and benefits.

2. Benefit identification and High level financial benefit Formal benefits identification understanding drives identification should be conducted workshop must be held with key refinements to the business as part of the initial phase of the business stakeholders to identify case project, particularly with the project financial and non-financial benefits,

sponsor. their assumptions, risks and dependencies.

3. Benefits must be aligned with All benefits must be aligned to All benefits must be aligned to the strategic goals of the one or more strategic goals of the one or more strategic goals of the organisation organisation. organisation, and show how the

project will positively contribute to the goal’s associated KPIs.

4. Benefits Realisation The management of benefits must The BRM framework must align and Management needs to acknowledge financial policies cross-reference existing financial integrate with an organisation’s and consider the impact change policies and program/change Financial, Program, and Change management may have on the management frameworks. Management Frameworks realisation of key outcomes.

5. Benefits are enabled by Changes required to enable the People, process, technology and successful change – people, benefits are typically limited to organisational changes required to process, technology and the project outputs and planned enable benefits need to be linked to organisational training. ensure realisation.

6. Benefits need to be owned An appropriate business Benefit roles are defined and clear and managed by a designated representative is identified to accountability for benefits are person in the business; they measure and report benefits of managed to ensure their realisation. don’t just happen large projects.

7. Benefits must be measurable Key benefits are quantified through Benefits are quantified using and linked to performance data ‘guestimation’ and may not be effective estimation techniques and and reporting frameworks using standard techniques and available standards and rates.

rates.

8. Benefits can be tangible (financial or non-financial) or intangible, e.g. improvements in quality, efficiency, access, and financial performance

Benefits are typically categorised as either tangible (financial) or intangible (unquantified).

Benefits are categorised using a defined standard and rates consistently across business operations, and quantified for both tangible (financial and non-financial) and intangible benefits.

9. Benefits realisation requires a Benefit baselines are typically Benefit baselines are reassessed at baseline and benefit targets limited to the initial business case planned gateways throughout the in order to measure resulting development. project lifecycle. outcomes

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2.2.1 Tailoring Benefit Realisation Management (BRM) principles (cont.)

BRM Principle P3M3 – Level 2 P3M3 – Level 3

10. Dis-benefits need to be Dis-benefits are rarely identified Dis-benefits are identified and recognised and mitigated and are only measured when treatment plans or corrective

significant for selected large action for significant dis-benefits projects (e.g. risk mitigation are planned within the project and projects) benefits realisation plans.

11. The same benefits cannot There is likely to be overlap and Processes are in place at a portfolio be claimed by two or more double counting of benefits level to ensure benefits are not projects (i.e. no double between some related projects. claimed by more than one project counting) and business cases are not inflated.

12. Benefits need to be Benefits are communicated by the Planned and scheduled communicated initial business case and through ad communication of benefits are

hoc or incidental means to other conducted in conjunction with the key stakeholders. project’s change management plan.

13. Benefits are not automatically Informal or ad hoc benefits tracking Formal processes are in place to realised; active monitoring is and management. track and manage the performance required of benefit realisation

14. Benefits are dynamic; they Limited reviews with some Formal processes are in place to need to be regularly reviewed corrective action conducted by the validate the realisation of benefits and updated project. and refine their targets

15. Intermediate outcomes are Intermediate outcomes are only Intermediate benefits are identified needed to realise end benefits identified within large project or in early benefits identification using (and are just as important) programs. benefits mapping techniques.

16. Benefits tracking continues Focus on benefit identification in Structure and governance in place long after a program/project the project/program start-up but through standard benefit realisation has ended not maintained over the initiative’s plan processes and templates.

life cycle.

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2.2.2 Tailoring BRM processes and deliverables

While the benefit principles are mandated when managing benefits, an organisation has scope to create efficiencies in their framework by tailoring benefit processes and deliverables to suit the specific external and project factors in which they operate. Below is the suggested minimum required from an organisation to provide sufficient benefit realisation management according to these guidelines:

Stage Key Tasks Deliverables

Small Project Large Project/Program

1. Understand 1.3 Identify key Draft Benefits • Benefits Realisation stakeholders Realisation Register Strategy

1.4 Identify benefits with • Draft Benefits key stakeholders Realisation Register

1.5 Estimate benefit value • 3 Column Analysis

1.6 Establish Benefits • Benefits MapRealisation Register

2. Plan 2.2 Confirm benefit Baselined Benefits • Benefits Realisation ownership Realisation Register Plan and Profiles

2.3 Confirm benefit • Baselined Benefits baselines and targets Realisation Register

2.4 Develop benefit profiles

3. Manage and Report 3.6 Review progress Updated Benefits Updated Benefits against business case Realisation Register Realisation Register

4. Evaluate 4.1 Handover benefits Updated Benefits Updated Benefits reporting and Realisation Register Realisation Register measurement to BAU team

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2.2.3 Tailoring BRM – project and external factors Specific external and project factors in which an organisation operates will impact the way a Benefits Framework is tailored. The following are typical factions that are to be considered when introducing or enhancing a benefits framework within an organisation:

• Magnitude of the Change

The size, complexity, priority and risk of a project and its benefits will affect the level of governance required to control its delivery and benefit realisation. The use of an organisation’s Project and/or Change Sizing Guides to tier benefit management requirements will ensure efficiencies in benefit processes and deliverables. The differences between the project and change lifecycles for ‘large’, ‘medium’ or ‘small’ projects is a helpful guide to determine the appropriate and sufficient governance control required for benefits management. For example, for large project an organisation may mandate Benefit Profiles and Benefit Map are required for all benefits, where as for small projects a Benefit Realisation Plan might be sufficient. Benefit processes should also be aligned to the defined project stages for a particular project. See Table 1 for a sample project sizing guide. See Table 2 for a sample tiered benefit process and template table.

• Roles and Responsibilities required for BenefitsManagement

The standard role descriptions should be adapted to required accountability and management of the change. Tailoring the standard role descriptions should ensure clear lines of accountability and oversight, while avoiding excessive and duplicated governance. Avoid recruiting to the position description as some functions may be performed by staff already in place, particularly for smaller projects.

• Terminology and Language of theOrganisation

The terminology and language of an organisation should be embedded when tailoring benefit processes and templates. Using an organisation’s language will help provide consistent communication across project and business areas. Using familiar terminology and language will also accelerate adoption and help ensure continued use of the framework.

• Audience of the Change

The particular audience required to review and approve a change and its benefits will alter the processes and benefit information required from a project. For example, large projects requiring the development of a capital business case will need to adhere to Divisional and Treasury policies including TPP 08-5, TPP 07-5 and TPP 07-4. A small internal recurrent project may find adherence to Treasury requirements excessive and may benefit from tailored ‘lite’ version the required deliverables.

• Maturity level of the Organisation

Determining the maturity level of an organisation may help tailor the framework to help ensure adoption and continued use of benefit processes and templates. Low benefit management maturity may resist the introduction of a complex and comprehensive benefits framework. An organisation may consider distilling the framework, processes and templates to the gain the essential required to improve the organisation’s benefit management and perform required governance reporting. A road map may be developed to plan the continued improvement of benefits management within the organisation. See Table 3 for P3M3 BRM Maturity Guidelines.

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3. Tools

Project Sizing Guide

Decision Factors Small Project Medium Project Large Project

Scope Scope small, impacts one Scope medium, impacts Scope large, impacts branch many branches within one more than one division

division

Likely Project Cost Low, less than $100k Medium, $100k to $500k More than $500k

Effort 10 person days to 26 26 person-weeks to 1 More than 1 person-years person-weeks person-years

Duration Less than 6 months 6 months up to 1 year More than 1 year

Experience Project Manager has Project Manager has Project Manager has experience in undertaking some experience little/no experience in and delivering similar in undertaking and undertaking or delivering projects delivering similar projects projects of this type

Complexity Easily understood The problem is difficult Both problem and problem and the solution to state, or the solution solution are difficult to is clear and easily is unclear or difficult to define or understand, achievable achieve and the solution will be

difficult to achieve

Program Environment Is not part of a program/ Some major Major high-risk is stand alone project dependencies or inter dependencies or inter

related projects but related projects considered low risk

Strategic Importance Operational impact only Tactical impact; not Strategic impact; directly strategic but relates to relates to key initiatives low-priority initiatives in a in OSR’s Strategy and Divisional Plan Corporate Plans

Customer Impact During Delivery

Internal end users within single branch and single location

Internal end users within one division and multiple locations

Internal end users across multiple divisions, multiple locations and external users

Internal Impact During Impacts branches within a Impacts multiple Impacts on the whole of Delivery division branches across more the organisation

than one division

IT Component/ Systems No IT component Existing systems - New system or significant involved upgrade or increased reframing of existing

utilisation systems

Stakeholder Consultation Within own branch Across multiple branches Across more than one in more than one division division, interest groups,

external parties

Project-Specific Risks Low overall risks Medium overall risks High or Extreme overall risks

External Exposure No external exposure Exposure to other Exposure to Treasury government agencies and/or public

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3. Tools (cont.)

Tiered Benefit Process and Templates

Phase Pre-Project Concept Justify and Plan

Execute/ Implement

Finalise Realise and Improve

Status Potential Expected Committed Validated Baselined Realised benefits benefits benefits benefits benefits benefits

Process Understand Plan benefits Manage Evaluate benefits and report benefits

benefits

Stakeholders Sponsor Project Project Project Project Benefits

Business Manager Manager Manager Manager Owner

Analyst SMEs Senior Project Benefits EPMO

EPMO Business Suppliers Steering

Committee Owner

Analyst Senior Users EPMO Senior Users

Data Analyst Business

EPMO Analyst Benefits

Owner SMEs

EPMO EPMO

Accountable Project Sponsor

Project Manager

Project Manager

Project Manager

Project Manager

Business Owner

Key activity Identify benefits

Profile benefits

Identify metrics

Monitor benefits

Measure benefits

Measure sustainability

Output Project mandate

Outline business case

Complete business case

Updated benefit

Finalised benefit

Updated benefit

Draft benefit profile (tier 2 and 3)

Draft benefit map (tier 2 and 3)

Approved benefit realisation plan

Approved benefits profile (tier 2 and 3)

realisation plan

Updated project status report

Updated benefit map (tier 2 and 3)

realisation plan

realisation plan

Approved benefit map (tier 2 and 3)

Templates Project mandate

Benefit self-assessment worksheet

Project brief

Benefits profile

Benefits map

Change impact analysis

Project management plan

Benefits realisation plan

Benefits profile

Project management plan

Project status report



End project report

Benefit realisation plan

Change readiness

Benefits map Benefits map

audit Benefits quality checklist

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3. Tools (cont.)

P3M3 BRM Maturity Guidelines

P3M3 Benefits Management

Specific Attributes Generic Attributes

Level 1

There is some recognition that the concept of benefits can be differentiated from project outputs.

1. Outcomes defined in terms of features and results rather than measurable performance improvement

2. Benefits seen as justification rather than core element of project’s delivery

3. Little or no recognition of how benefits are to be managed and realised.

1. Training provision is uncoordinated, with little or no knowledge sharing

2. Key individuals lack experience

3. No standard roles, and responsibilities are not defined or are generic

4. Some information available but is outdated, unstructured and dispersed

5. Limited, if any, formal checking or review

6. Plans, if any, are conceptual or merely sequences of events with rough timescales

7. Planning, if any, likely to be an initial activity with little maintenance of ownership or tracking.

Level 2

Benefits are recognised as an element within project Business Cases. There may be a Benefits Review Plan documenting who is responsible for particular benefits and their realisation, but this is unlikely to be followed through or consistent.

1. Evidence in some projects of understanding of differences between products, outputs and outcomes

2. Responsibility for benefits may be assigned within some project Business Cases but outside project management team

3. Role of project Executive and Senior User in benefits management and realisation may be articulated in some projects

4. May be some benefit measurement criteria

5. Different areas manage and account for benefits in different ways

6. Post-project reviews focused on project activities and products.

1. Localised information structures, with some information sharing between teams

2. Focus on documentation during start-up and definition, but not maintained over initiative’s life cycle

3. Limited localised information controls, with no formal release management arrangements

4. Local reviews, with some corrective actions undertaken within the group

5. Generic training may be provided in key concepts, and there may be individuals undertaking qualification training

6. Local sharing of knowledge may exist but mostly ad hoc

7. Key individuals may have practical delivery experience and track record

8. Roles, responsibilities and competencies defined in some areas but not consistently across the organisation

9. Plans exist but are not underpinned by consistent development methodology, yet may still be effective locally

10. Planning seen as activity tracking rather than proactive/forecasting

11. Estimation is more ‘guesstimation’ and does not use standard techniques.

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3. Tools (cont.)

P3M3 BRM Maturity Guidelines (cont.)



Level 3

There is a centrally managed and consistent framework for defining and tracking the realisation of benefits arising from project outputs.

1. Measures of project success are becoming defined and explicit

2. Common approach and procedures that ensure consistency across all projects in relation to benefits measurement and realisation

3. Benefits management procedure described within project Benefits Review Plan

4. Changes to project considered against impact on benefits

5. Common set of tools and templates used for benefits management activities, including their detailed description within the Benefits Review Plan

6. Business Case and Benefits Review Plan stored centrally and subject to issue and change control procedure

7. Detailed statements explaining how benefits will be achieved from project products

8. Benefits calculated in financial terms against centrally managed assessment criteria

9. Clear responsibilities for benefits realisation cited in Business Cases and Benefits Review Plans

10. Post-project benefit reviews used to report formally on outcomes and benefit realisation

1. Information has a refresh cycle or is regularly accessed

2. Organisation-wide information standards on confidentiality, availability and integrity

3. Formal information release management procedures

4. Independent reviews take place

5. Scrutiny largely for compliance reasons, identifying failures rather than opportunities for improvement

6. Plans developed to a central and consistent standard that is output – or goal-based

7. Plan development takes into account a range of relevant factors

8. Evidence of effective estimating techniques

9. Dependencies are identified, tracked and managed effectively

10. Training is focused on the organisation’s approaches and raising competence of individuals in specific roles

11. Forums exist for sharing organisational experience to improve individual and organisational performance

12. Centrally managed role definitions and sets of competencies defined and used to support appointments

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3. Tools (cont.)




Level 4

Benefits management is embedded within the PRINCE2 approach and there is a focus on delivery of business performance from project outputs. Project performance metrics are collected and analysed.

1. Procedures in place to identify and resolve double counting of benefits

2. Benefits defined at programme level and may be cascaded down to projects

3. Benefit reviews undertaken regularly and action taken to leverage opportunities

4. Complex variety of benefits measures designed and applied according to circumstances (e.g. Balanced Scorecard)

5. Common, performance-based benefits measurement and assessment mechanisms in place

6. Clear and active ownership of plans to improve performance from project outputs

7. Procedures for management of benefits realisation owned, reviewed and being improved

8. The organisation ensures that claimed benefits are realistic and endorsed by the project Executive and Senior User.

1. Information is current and extensively referenced for better decision-making

2. Trend analysis and measurement undertaken on performance information to identify improvement opportunities

3. Knowledge management is a central function and is used to help improve performance and planning

4. Reviews focus on opportunities to improve as well as compliance

5. Plans kept up to date, with the application of sophisticated planning techniques and recognition of interdependencies

6. Extensive training is provided, focusing on personal development and performance improvement

7. Evidence of interventions to avoid conflicts and take advantage of opportunities

8. Mentoring and individual development is used to improve organisational performance

9. Succession plans exist for key roles.

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3. Tools (cont.)




Level 4

Benefits management is embedded within the organisational approach to change and is assessed as part of the development of organisational strategy.

Business performance metrics are linked to, and underpin, the recognition of benefits realisation.

There is evidence of continual improvement.

1. Clear links between strategic decision-making and benefits realisation

2. Evidence of development and innovation of techniques based on experience of realising a variety of benefits in several different environments

3. Active management of opportunities to enhance benefits realisation

4. Decisions taken to balance benefits and “dis-benefits” based on statistical measures

5. Strategic priorities affect benefit measures (e.g. changes to strategic Key Performance Indicators are filtered down into projects)

6. Post-project benefit reviews studied, trends established, and lessons learned fed back into benefits realisation planning and other management activities.

1. Information is valued, with continual maintenance and referenc

2. Evidence of extensive intelligence-gathering processes, with information disseminated through a variety of channels

3. Review and improvement is continual and proactive, with lessons being shared openly

4. Planning inherent in decision-making process, with adjustments and implications managed and deployed

5. Active management of interdependencies between initiative plans and other business plans

6. Estimations are accurate and used effectively to ensure delivery

7. High levels of competence embedded in all roles and seen as part of career paths

8. Knowledge transfer is an inherent behaviour within the organisation

9. Skills embedded into organisational leadership and management development programmes.

© Crown copyright 2010. Reproduced with permission from OGC

Source: Prince2 Maturity Model (P2MM)

P3M3® is a registered trade mark of the Cabinet Office.

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[email protected]

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