Benefits Analysis
& WinWin Negotiations
Nupul Kukreja
19 September 2012
1
Agenda
• Part 1: Benefits Analysis
– Deficiencies of Project Management Mindset
– Evolution of IT Applications
– Adoption of Program Management Mindset
– Program Model
– Benefits/Results Chain
• Part 2: WinWin Negotiations
– WIOA Model of Negotiations
– WinWin Sessions in 577
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Agenda: VBSE 4+1 View
5a, 7b. Options, solution
development & analysis
Dependency
Theory
2a. Results chains
2. Identify SCS
3b, 5a, 7b. Cost/schedule/
performance tradeoffs
3b, 7a. Solution Analysis
6, 7c. Refine, execute,
monitor & control plans
Control
Theory
6a, 7c. State measurement,
prediction correction;
Milestone synchronization
3. SCS Value
Propositions
(Win Conditions)
Theory-W:
SCS Win-Win
1. Protagonist goals
3a. Solution Exploration
7. Risk, opportunity,
change management
Utility
Theory
4. SCS expectations
management
5a, 7b. Prototyping
5. SCS WinWin
Negotiation
Decision
Theory
5a. Investment
analysis, Risk analysis
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Project Management
• Claim:
“The project was delivered on time and within
budget and thus was a resounding success”
• What’s wrong with the above claim?
– Difficult to ascertain if the project was indeed
beneficial to the clients/stakeholders
– Just delivering the project doesn’t guarantee benefits
– Benefits don’t turn on automatically after project
delivery
– Parochial IT-centric view i.e. delivery of IT system is
the start-all and end-all
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‘Silver Bullet’ Thinking
• Belief in the power of IT alone to deliver
business results
• Businesses purchase/install/create complex IT
“silver bullet” packages with the belief of
“benefits found inside” 
• IT applications have evolved from simple
automated systems to complex IT-enabled
business transformations – demands new
approach to management
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Evolution of IT Applications
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Automation of Work
• Few manual jobs were automated and few new jobs created
• Limited change to people’s jobs or to business processes
• Overall change to nature of work not significant
• Learning requirements: simple and focused on technology use
• If the application ran correctly most of the benefits
would be realized
• Designed, operated and managed by IT experts
Impact
• Getting Work Done
• Doing the same thing
more efficiently
Benefit
• Operational Efficiency
Examples
• Payroll Processing
• Census data calculations
• Check Processing
• Basic Order Processing
• Basic Airline Reservation
Systems etc.,
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Information Management - 1
• Information was by-product of automated applications
• Information used to make operational/tactical/strategic
decisions owing to the proliferation of desktop computers
• Slight change of jobs with training for taking predetermined
action based on information
• More Information  Benefits gained from analysis and
application of information the job
Impact
• Restructuring work and
work processes
• Doing things differently
Benefit
• Operational and Tactical
Effectiveness
Examples
• Customer Information
Systems (CRMs etc.)
• Airline Yield Management
Systems
• Executive Information
Systems
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Information Management - 2
• Automated information bases provided opportunities for
designing new products
– Mutual Funds
– Discount Plans
– Coupons etc.
• Delivering a correctly functioning application no longer
sufficient. For benefits to be realized:
– Nature of people’s work changed
– Business processes restructured and better integrated
– Change in reward systems
– Significant learning other than just technical usage
• Increased number of potential IT applications (many
conceived outside IT by business managers etc.)
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Business Transformation
• Information management applications enable organizations to
rethink and redesign their business processes and how they
carry out business
• Example(s):
• Internet and virtual banking redefining financial industry
• Airlines offering passengers direct access to reservations
systems
• Amazon.com
Impact
• (re)Defining the business
• Doing different things
• Changing the business/
industry rules
Benefit
• Strategic Effectiveness
and Positioning
Examples
• Just-in-time (JIT)
inventory systems
• E-commerce
• OLAP
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Strategic Importance of IT
Strategic Importance
Amount of Change
IT as % Total of Change
Number of potential applications
High
Low
Automation of Work
Information Management
Evolution of IT Applications
Business Transformation
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Traditional Project Management Blindspots
Linkage
Reach
• Alignment of IT with Business Strategy
• Integration with initiatives in other
areas of business to realize benefits
Price of Forgetting:
• Lack of identification and understanding
of benefits
• Project scope inflation
• Lack of clear contribution to benefits
• Breadth of change required by IT
investment
• Impact (depth) of change
Price of Forgetting:
• Underestimation extent of change
• Lack of buy-in and finger-pointing
• Lack of understanding cross-functional
implications
People
Time
• Those affected by change and their
readiness for it
• Understanding current competencies
and know-how of change
Price of Forgetting:
• “One size fits all” mentality
• Underestimated training effort
• Resistance to change
• Realistic length of time for all changes
to occur and benefits to be realized
• Based on the other 3 dimensions in the
table
Price of Forgetting:
• Unrealistic/unachievable expectations
• Unexpected time lags between delivery
and realization of benefits
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Key Takeaways
• ‘IT’ by itself, no matter how technically powerful
cannot deliver business results
• Benefits don’t just happen – benefits stream flows and
evolves overtime as people learn to use the system
• Benefits rarely happen according to plan – initial
forecast is only an estimate. One has to ‘keep checking’
them like financial assets
• Benefits realization is continuous process – involves
envisioning results, implementing and checking
intermediate results and dynamically adjusting path
leading from investments to business benefits
• Paradigm shift required:
– Project Management to Program Management
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Paradigm Shift
Project Management
Program Management
Structured set of activities concerned
with delivering a defined capability based
on agreed budget/schedule
Structure grouping of projects designed to
produce clearly identified business
results/benefits
Typically IT focus i.e. project ends with
delivery of technology
IT delivery + training, marketing,
organizational change, business process
redesign
IT accountable for benefits
Business responsible for benefits
Projects deliver “automatic” benefits
Projects deliver capabilities, programs
deliver benefits
Active benefits realization:
Passive benefits realization:
Managing risks, exercising options at the
“Trusting the gods” to deliver the benefits right time by proactive change
monitoring/management
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Paradigm Shift - Examples
“Project”
Project
Management
Interactive website
Installation of new
software package (e.g.
ERPs etc.)
Customer information
system /Automated
response system for a
call center
Focus on execution, design,
development and delivery
of “project”
Concerned with inputs,
costs, and time required to
produce intermediate
outcomes
Program Management
Includes all projects required to
generate minimum number of
hits and sales revenue target
with 12 months of launch
Initiatives to help business units
achieve well-defined process
improvement objectives in
manufacturing, finance and
sales in 12 months (say)
Staffing, training, marketing and
launch projects to achieve clear
operational, sales and
profitability goals over first 24
months (say)
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Program Model
• An ‘intermediate’ model to help articulate and
capture ‘program vision’
• Created to facilitate easy creation of the
Results Chain Model
• Ease of use for communication amongst
stakeholders
• Helps see the ‘broader vision’ and all
encompassing view of the ‘program’
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Program Model
Assumptions: Under what assumptions is this model true?
Stakeholders
(Who)
• Who/what
resources are
required for
‘executing’ the
initiatives
• Do you need to
‘partner’ with
another
department or
organization?
• Do you need to
hire anyone?
Initiatives
(What)
Value Propositions
(Why)
Beneficiaries
(For Whom)
• What are the key
activities that
must be done to
for delivering/
realizing the value
propositions/
benefits?
• Why undertake
this project/
program?
• What are the
value propositions
you seek to
satisfy/serve?
• What are the
goals?
• Who derives value
from the
project/program?
(Usually the
customers or end
users; can also be
project sponsors)
Initiatives that need to be undertaken to help beneficiaries
derive value from the expected benefits/value propositions
Initiatives that need to be undertaken to help deliver value to the
beneficiaries (i.e. “how” will the benefits reach the beneficiaries?)17
Example – Volunteer Management System
Assumptions
• Growing needs of volunteers
• Continuously growing volunteer pool
• Increasing activities requiring more volunteers
Stakeholders
(Who)
 Developers
 Maintainer
 IIV & V
 Volunteer
 Volunteer
Coordinator
 Supervisor
Initiatives
(What)
Develop new volunteer
management system
Create web application
outreach
Develop improved volunteer
management process outreach
Provide training for new job
management process
Deploy job management
process
Setup work stations for
volunteer use
Value Propositions
(Why)
Beneficiaries
(For Whom)
 Improved
 Volunteers
Productivity
 Volunteer
 Faster volunteer
coordinator
management and
 Supervisor
less person-toperson time
 Improved volunteer
management
process
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MEDIC-ated Value Propositions
• Articulate and capture Value
Propositions/Goals to be measurable…
…so that you’ll know “how much” to achieve
AND if/when you’ve achieved them
• MEDIC-ated goals force early consideration of
measurement influenced thinking:
M : Maintain (e.g.: a level of service maintained)
E : Eliminate (a function eliminated)
D : Decrease (turnaround time decreased)
I : Increase (sales increased)
C : Create (certain capability created)
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Creating The Results Chain
• Directly derivable from Program Model
• Explicitly shows causal linkages between the
various entities
• Makes explicit the 4 management blind-spots
mentioned earlier
• Helps identify missing initiatives, stakeholders,
benefits in the Program Model
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Results Chain Diagram - Legend
DMR/BRA* Results Chain
Assumption(s):
-Order to delivery time is
an important buying criterion
Stakeholder(s)
OUTCOME
INITIATIVE
Contribution
Implement a new order
entry system
OUTCOME
Contribution
Reduced order processing cycle
(intermediate outcome)
Increased sales
Reduce time to process
order
Reduce time to deliver product
*DMR Consulting Group’s Benefits Realization Approach
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Volunteer Management System – Program Model
Assumptions
• Growing needs of volunteers
• Continuously growing volunteer pool
• Increasing activities requiring more volunteers
Stakeholders
(Who)
 Developers
 Maintainer
 IIV & V
 Volunteer
 Volunteer
Coordinator
 Supervisor
Initiatives
(What)
Value Propositions
(Why)
Beneficiaries
(For Whom)
Develop new volunteer
 Improved
 Volunteers
management system
Productivity
 Volunteer
Create web application
 Faster volunteer
coordinator
outreach
management and
 Supervisor
Develop improved volunteer
less person-tomanagement process outreach
person time
Provide training for new job
 Improved volunteer
management process
management
Deploy job management
process
process
Setup work stations for
volunteer use
Provide data for transformation
and migration process
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Rules for Creating Results Chain
• Every initiative must be followed by an outcome/benefit
• Intermediate outcomes link to other intermediate
outcomes (final outcome has no outgoing links)
• Initiatives/outcomes can link to more than one outcome
• Stakeholders are linked to the Initiatives
• Links are labeled with ‘contributions’ i.e. what does the
particular initiative contribute towards attaining a
particular benefit (use only if not explicit from context)
• The “graph” is fully connected (assumptions are shown in
a separate disconnected box)
• Keep asking “so-what” for every outcome to uncover
other outcomes and “what-else” to see if necessary
initiatives are taken to realize the outcome(s)
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Workshop
Problem Statement
USC needs an online course reservation system to
automate the registration process and to use the
registration data to understand which courses to offer
when, to improve their overall course offerings thereby
increasing quality of the program
• Get together in your teams and create:
1. Program Model
2. Results Chain
• Brainstorm with your team the various elements of the
program model and convert it to a results chain
• Note the questions you may have or difficulties
encountered
• Time: 15 minutes
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Problem Statement
USC needs an online course reservation system to automate the registration process
and to use the registration data to understand which courses to offer when, to
improve their overall course offerings thereby increasing quality of the program
Assumptions: Under what assumptions is this model true?
Stakeholders
(Who)
• Who/what
resources are
required for
‘executing’ the
initiatives
• Do you need to
‘partner’ with
another
department or
organization?
• Do you need to
hire anyone?
Initiatives
(What)
Value Propositions
(Why)
Beneficiaries
(For Whom)
• What are the key
activities that
must be done to
for delivering/
realizing the value
propositions/
benefits?
• Why undertake
this project/
program?
• What are the
value propositions
you seek to
satisfy/serve?
• What are the
goals?
• Who derives value
from the
project/program?
(Usually the
customers or end
users; can also be
project sponsors)
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Workshop Q&A
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Part 2: WinWin Negotiations
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WinWin Taxonomy (a.k.a. WIOA Model)
Win
WinCondition
Condition
Issue
Issue
involves
covers
addresses
Win-Win Equilibrium:
• All win conditions covered
by agreements
• No outstanding issues
Agreement
Agreement
adopts
Option
Option
Win Condition: Stakeholders’ desired objectives stated in a form
understandable by users, customers and other stakeholders and
formalized only where necessary
Issue: captures conflicts between win conditions and their associated risks
and uncertainties
Option: candidate solutions to resolve an issue
Agreement: captures shared commitment of stakeholders with regard to
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accepted win conditions or adopted options
WinWin Negotiation Primer
1. Refine and expand negotiation topics
Shared taxonomy
of topics win
to understand
project scope
2. Collect
stakeholders’
conditions
Record first on
draftwin
of stakeholder’s
3. Converge
conditionsneeds/wants for all to view
Disambiguation
andof
de-duplication
4. Define
glossary
key terms
Domain vocabulary
to develop mutual
5. Prioritize
win conditions
on: understanding
Business Value vs. Ease of Realization
Degree of
projectand Technological,
6. Reveal
issues
constraintssocial,
success dependent political or economic
Varianceissues
in prioritization
provokes discussion of
7. Record
and
options
on win condition
feasibility
issues/constraints
Issues recorded along with possible resolution tactics
8. Negotiate
We alsoagreements
capture a 3rd dimension of
Mutually
agreePenalty”
toawin
conditions/options
Above
steps“Relative
accelerated
by
“Shaper”
i.e. a facilitator
– Degree
of who guides the negotiation
project failure if WC not deilvered
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WinWin Negotiation in 577
• Two (possibly 3) sessions to be held in the coming week(s)
(client required for only 2) – moderated by TAs
• Part 1:
– Create Program Model
– Capture Value Propositions (Benefits) in Winbook
– High level breakdown of desired capabilities (top-level
decomposition)
– Capturing win conditions for various aspects of the desired
system: functional, levels of service, project, budget,
language/tools etc
• Part 2:
– (Disambiguation/Deduplication before session)
– Prioritize Win conditions (possibly broken into 2 sessions)
– Revealing Issues/Constraints and other new win conditions and
actually conducting the ‘negotiation’
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Winbook and WinWin Negotiations
• Based on the WinWin Negotiation Framework and directly
supports the WIOA Model
• Winbook is a tool to ‘log’ the negotiation and show its
‘status’ as function of time
• “Functional” Win Conditions to be captured in the userstory format (As a <role>, I can <activity> so that <business
value>)
• Dynamic prioritization of win conditions with sensitivity
analysis capability
• Winbook Tutorial available on class-website under “Tools &
Tutorials”
• WinWin Sessions are HUMAN centric and highly iterative. A
tool like Winbook only helps ‘document/augment’ the
process and not execute it
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WinWin Participation
• The ENTIRE TEAM attends (includes clients )
• DEN students and remote clients should “Skype”
into the conference
• Set up an account on freescreensharing.net so as
to share screen with remote participant(s)
• Bring your laptops to the session(s) – at least 3
laptops (You may check-out laptops from SAL)
• Be sure to practice the ‘setup’ prior to the session
• Feel free to bring snacks and drinks
(no alcohol please )
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References
• The Information Paradox – John Thorp
• Business Model Canvas – Osterwalder &
Pigneur
• Value-Based Software Engineering Biffl et. al.
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