"Spring School 2005: Benefits Management"

Event Report

The Spring School this year was on that often neglected area of projects – benefits management. Over 50 attendees took a look at this subject over four weeks with speakers from varied backgrounds.

Jim Stockwell, of Denmans Assignments Limited, began the series with a presentation on The Business Case – Its Purpose and Preparation. Jim began by reminding us that the Government’s Gateway Review process identified that business case review resulted in a higher level of “red” flags than in any other areas of the project lifecycle. Few projects have robust benefits management processes and most projects fail to deliver anticipated benefits. The business case should be developed and approved in distinct phases: from outline through to full business case. It should then be carefully updated with changes caused throughout the lifetime of the project. It should look at strategic fit and options appraisal (including value for money and risks), not just for savings or increases in performance, but should also assess achievability, affordability and whether the benefits can be measured. Jim quoted a number of interesting examples to illustrate where poor assumptions or weakly developed new processes and lack of wide consultation could undermine the business case. One example was the NHS “choose and book” programme allowing patients some choice on hospital, consultant and first appointment time. Despite being an interesting concept, the extra time GPs would need to process the booking had not been fully accounted for and extra funding was needed for implementation. A lively debate followed and it was generally acknowledged that more rigour applied to the business case would result in exposing risks and issues earlier and enable them to be tackled before they seriously impacted on the programme.

Jon Bassett, Director of Implementation and Lize Dupe, Head of Benefits realisation of AXA Life set the scene in their presentation by explaining that 25% of management time was involved in managing change and that it was essential for a structured model to ensure each new programme flowed through from the original vision, through detailed planning linked to key performance indicators(KPIs) in order to guarantee realisation of planned benefits. Most big programmes of change were introduced on the basis of achieving benefits over their product life of possibly up to 20 years. (Different to many organisation who had to achieve payback on projects within 2-3 years) They explained how important it was that senior sponsors are fully involved in writing the business case as part of taking full responsibility for ensuring projects were successful. Their own performance targets are drawn up to reflect achievement of the proposed benefits. To deliver this requires a “measurement culture” to ensure processes are fully in place during project implementation to enable the accurate monitoring of KPIs. Because the delivery period of about 2 years is considerably less than the realisation period of up to 20 years, managers’ priorities are weighted higher on realisation than delivery.

The third lecture on Benefits Centred Project Management featured David Wilkin of MMP Consulting and Steve Money. David began by emphasising the need to be thinking about project benefits at all times. This improves the way projects are organised and reduces the risk of any adverse effects on the business. The key to this approach is the structuring of a project into work package milestones linked to implementing elements that deliver complete sets of benefits rather than implementing convenient tranches of technology. (e.g. a partially complete infrastructure with high priority functionality on it that works and delivers benefit, rather than a full infrastructure with nothing on it yet) Hand in hand with these priorities is the need for a commitment from management to co-operate between all stakeholders, the need for a benefits realisation management role, the prioritising of functionality between must haves, should haves and could haves (MOSCO), and a plan which sets out the phasing of what benefits are being delivered over the life of the project – as well as the delivery of the technical work packages. Steve then outlined three interesting case studies which illustrated the concepts outlined.

The fourth and final lecture was delivered by Ian Kennon, a programme manager with IBM on the topic Benefits Management - Post Implementation and Monitoring. He recounted some of his experiences in three large programmes. On the RAF Logistics renewal programme known as LITS in which pre-determined savings in parts and maintenance costs were built into future departmental budgets before the programme was completed. So, when the programme was delayed and de-scoped, the benefits profile changed and required budgets to be re-profiled. The second was an agreement for the global outsourcing of IT with a large pharmaceutical company, which resulted in a benefit realisation model being built into the contract - so that the pharmaceutical company maintained the service level required and at the same time IBM delivered cost savings in order to meet its own profit targets. The final example was the consolidation of disparate systems and processes for a mobile telephone company. The overall objectives being to enable increase in market share through flexibity and speed to market of new products and services and a relative reduction in IT spend.

The series of presentations were very well received and we are hoping to repeat this School in the autumn at another venue, over 4 weeks during October 2005.

Our sincere thanks must be extended to IBM UK for the high level of hospitality at their Southbank facility over the four evenings.