“Benefits-led” Portfolio Management: An Introduction
January 2010
Daniel Fisher
e: daniel.fisher@cambiel.co.uk
t: 07906 351008
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Slide 1
“Benefits-led” Portfolio Management
 Introduction
 What is it?
– Features
– Decisions enabled
– Difference from “traditional” approaches
 Business Case for “Benefits-led” Portfolio Management
 Key Implementation Considerations
 How Cambiel Can Help
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Slide 2
Introduction
 “Traditional” portfolio management has existed for some time:
– Difficult to find case history of success
– “Bottom-up” approach to tracking cost & risk (sometimes to exclusion of
benefits) perceived as bureaucratic & non- value-adding in many organisations
 “Benefits-led” approach emerging as more strategic alternative:
– Compelling business case
– Focus on value and benefits increasingly important in period of economic
constraint
– As Programme and Project Management becomes more mature, gap between
business change activity and corporate strategy is highlighted
 Portfolio management finally offering genuine opportunities to
“invest to save” and “invest to accumulate”
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Slide 3
About Cambiel & Sigma
 Leaders in “benefits-led” approaches to managing change
portfolios and programmes
 Responsible for some of the largest benefits realisation
implementations across public and private sectors
 Expert in training, coaching and facilitating “benefits-led”
mindset, tools & techniques
 More details at www.cambiel.co.uk
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Slide 4
Portfolio Management - What Is It?
 A portfolio is more than just the sum total of programmes and
projects. It provides a decision-making framework for optimising
the necessary contribution of change to your business strategy. It
is not just a reporting overlay on top of your programmes and
projects.
 Portfolio management is the process of:
– Ensuring that you are doing the “right” things (driving the contribution of business
change to your strategy), not just doing things well
– Engineering the optimum combination of programmes and projects to maximise
value (and minimise waste)
– Monitoring and managing the performance of your change investments at a strategic
level
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Slide 5
Portfolio Management - What Is It?
 The OGC says that Portfolio Management is a “co-ordinated
collection of strategic processes and decisions*”. Some
key features:
Business Strategy
Increase
sales
Corporate
Performance
Management
Business As
Usual
Reduce
costs
Develop
staff
Benefits-led
Portfolio
Management
Business Change
(Projects &
Programmes)
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
• Managed at corporate level, in a similar
way to, but additional to, Business As
Usual performance management
• Bridge between top-down strategy &
bottom-up business change delivery
• Proactive control mechanism for
executive
*OGC Portfolio Management Guide Crown Copyright
Slide 6
Portfolio Management - What Is It?
 Benefits-led Portfolio Management is the rapidly-emerging
alternative to Portfolio Management in recent practice
 It addresses the bureaucratic pitfalls which organisations have
encountered
 By building your portfolio around benefits* realisation you can
achieve its full potential value (e.g. genuinely increased efficiency
and effectiveness), rather than just manage its timeliness and cost
–
–
–
Most effective balance of business change and business as usual
Optimised Return on Investment from projects and programmes
Reduced waste from poorly conceived, planned & implemented change
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
*Measurable outcomes of change perceived as positive by stakeholders
Slide 7
What Is It? - Features
Relationship to Programme
and Project Management
Strategic
Benefits-led
Portfolio
Management
•Defines overall contribution of change to strategy
•Prioritises benefits required to achieve contribution
•Makes decisions on commissioning, de-commissioning, sequencing
and clustering of initiatives
• Monitors overall Benefit Delivery Confidence (and Capability
Delivery Confidence by exception) & takes mitigating action
Programme
Management
Nature
of
Work
• Coordination of Project Delivery, change,
dependency and risk management
• Measurement of Results & Benefits
OUTCOMES
Project
Management
• Scope
• Budget
• Risks
• Schedule
• Metrics
• Resources
OUTPUTS
Tactical
BENEFITS
Not just a “bolton” overlay to
PPM but a
strategic
decision-making
process
Scale/ Scope of Initiatives
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Source: Adapted From New York City Housing Authority and Cisco Systems
Slide 8
What Is It? - Features
 Permanent support function provides “top-down” strategic
analysis and executive assurance, and “bottom-up” support and
appraisal to programmes throughout change delivery lifecycle:
Business Strategy
Drivers: PESTEL
Business Planning
Horizon
Scanning
Events &
Occurrences
Pre-Commissioning:
• Desirability &
Strategic Fit
• Affordability
• Feasibility
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Contextual
Commissioning:
• Investment Appraisal
• Delivery Confidence
In-year delivery
• Change Delivery
• Benefits
Realisation
• Transition to
Business As Usual
Slide 9
What Is It? - Features
 An underpinning portfolio model enables complex decisions
to be visualised – showing cause-and-effect of the chosen course
of action
Implement Systems
Project
OR
Implement Business
Change Project
Improve
productivity
OR
Combine systems &
change projects to deliver
capability programme
 Visualising
decisions also aids
communication and
stakeholder buy-in
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Reduce
Headcount
OR
Increase
Effectiveness
OR
Strategy
Alignment?
Both?
Slide 10
What Is It? – Decisions Enabled
 Create “what-if”
scenarios to aid
yield and cost
planning
• Overall net benefit
yield?
• Engineer programmes
to increase it? – e.g. by
coordinating benefitrelated dependencies?
• Commission programmes into the
context of the Portfolio – not
just standalone business cases.
• Reduce double-counting &
increase confidence in delivery
Business Strategy
Drivers: PESTEL
Business Planning
Horizon
Scanning
Events &
Occurrences
• How should change
investment develop to
support strategy?
• What impacts are likely
to occur in the short,
medium and long-term?
Pre-Commissioning:
• Desirability
• Affordability
• Feasibility
• Key costs and impacts?
• Consolidate, sequence
and/ or stop
programmes to
minimise unnecessary
impact & maximise gain?
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Contextual
Commissioning:
• Investment Appraisal
• Delivery Confidence
In-year delivery
• Change Delivery
• Benefits Realisation
• Transition to
Business As Usual
• Actual or predicted
benefits, cost or risk
exception?
• Stop, start, re-sequence,
cluster or consolidate
programmes to mitigate?
Slide 11
What Is It? – “Benefits-led” approaches vs.
“traditional” portfolio management
o “Traditional” Portfolio Management
o
o
o
o
o
o
o
o
Often better at reporting cost & risk than
benefits
Benefits can be a “bolt on” to programmes to
justify spend
Often retrospective – e.g. focusing on last
quarter
Sometimes bureaucratic, focusing on
reporting rather than decision-making
May be focused on “outputs” (e.g. products
from a programmes)
Business case process may not be integrated
with Portfolio Management, and may be “case
by case” (ineffective)
Often derived “bottom-up,” driven by project
& programme delivery functions, & utilising
project-level metrics
Governance focused primarily on project
delivery
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
o “Benefits-led” Portfolio Management
o
o
o
o
o
o
o
o
Reports benefits, cost & risk – i.e. Return on
Investment/ Value for Money
Benefits central to design, management &
success of Portfolio
Predictive – e.g. anticipating risks to benefits
from external events
Strategic analysis & decisions: reporting by
exception. Self-funding through value added
Focused on “outcomes” & business changes
required to deliver them, as well as “outputs”
Replaces current business case/ investment
appraisal processes with a more strategic,
contextual approach
Developed “top-down” by and for executive.
Driven by strategic decision-making, not by
ease of gathering existing project information
Governance focused primarily on benefits
delivery
Slide 12
The Business Case
 “Benefits-led” Portfolio Management:
– Reduces existing spend by stopping and/or consolidating programmes unlikely to
yield a return, or which could do better as part of another initiative
– Controls ongoing spend by investing only in initiatives with an appropriate return
(judged in the context of the Portfolio, not just business-case by business-case)
– Reduces duplication and waste – programmes designed around benefit-related
dependencies (e.g. “enabling” project becomes part of “business change”
programme, eliminating a project management overhead)
– Reduces duplication and waste - coordinates impact of change on the business,
reducing “change for change’s sake”
– Introduces greater objectivity, scrutiny and accountability into investment
appraisal and selection – reducing “pet project syndrome”
– Focuses investments on achieving the “right” commitment and behaviours
amongst stakeholders to generate genuine and sustainable improvement
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Slide 13
The Business Case
 Fundamentally, this is just Good Management!
– Relevant skills normally exist in-house
– Possible to make a one-off investment in skills, processes etc. to “kickstart”
– Process should be self-funding (through ongoing avoidance of
unnecessary cost and waste, and continued value realisation)
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Slide 14
Implementation Approach
 Treat as a “benefits-led programme”!
Widespread
stakeholder buy-in to
the benefits
Benefits shape
implementation and
drive stakeholder
behaviours
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Benefits become
self-sustaining and
implementation has
been a success
Slide 15
Key Implementation Considerations
 Cultural:
–
–
–
–
“Delivery” mindset of requirement to demonstrate genuine strategic fit
“Pet projects”
Business ownership and accountability for benefits
“Balanced” view of benefits – e.g. non-financial and financial
 Process & Infrastructure:
– Avoid perceived bureaucracy
– “Benefits catalogue” to track and manage value at Portfolio level
– “Architecture” of business activities to minimise unnecessary change
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Slide 16
Key Implementation Considerations
 Resource:
– Permanent central team: skilled at strategic analysis; knowledgeable about
programme management and financial management
– Not necessarily traditional “project office”
– Effective Portfolio Executive – ideally leadership team or sub-group
 Information & Technology:
– Project-level metrics (time, cost, quality, risk) insufficient to enable
strategic portfolio decisions: requirement for new dataset (Benefits
Delivery Confidence)
– Ensure currency of information whilst minimising unnecessary data
burden
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Slide 17
Summary
 “Traditional” portfolio management has existed for some time:
– Difficult to find case history of success
– “Bottom-up” approach to tracking cost & risk (sometimes to exclusion of
benefits) perceived as bureaucratic & non- value-adding in many organisations
 “Benefits-led” approach emerging as more strategic alternative:
– Compelling business case
– Focus on value and benefits increasingly important in period of economic
constraint
– As Programme and Project Management becomes more mature, gap between
business change activity and corporate strategy is highlighted
 Portfolio management finally offering genuine opportunities to
“invest to save” and “invest to accumulate”
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Slide 18
How Can We Help?
Programme
• Using a “maturity model” approach, we will
help you to articulate the benefits of this
approach to you and to your organisation
• We will help you to plan and achieve the
benefits, through enabling you to generate a
self-sustaining momentum
• We will underpin this with a customised
set of industry-leading processes and tools.
This is not about software (although itmay
be useful down the line), but about a new
model of benefits-led decision-making
• “Do it • Train it • Support it • Put it Right •
Review it • Assure it”
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
PIP
Overarching
Command &
Control Doctrine
MIP
ANPR
IMPACT
Scale of Impact
Scale of Impact
Scale of Impact
Scale of Impact
Scale of Impact
70 days
10
days
50 days
80 days
40 days
No. of People in
Impacted Roles
No. of People in
Impacted Roles
No. of People in
Impacted Roles
No. of People in
Impacted Roles
No. of People in
Impacted Roles
1,000 PCs
Business Area:
Prevent
Crime and
Disorder
5,000
Inspectors
Primary Impact on
Business Processes
1,000 PCs
3,000
Inspectors
Primary Impact on
Business Processes
500
Sergeants
7,000 PCs
Primary Impact on
Business Processes
40
Superintendents
500
Sergeants
Primary Impact on
Business Processes
20,000
PCs
5,000
Police
Staff
Primary Impact on
Business Processes
Communicate
positively with
the public
Identify
threats
Communicate
positively with
the public
Identify
threats
Communicate
positively with
the public
Identify
threats
Communicate
positively with
the public
Identify threats
Communicate
positively with
the public
Identify
threats
Protect
vulnerable
people
Locate missing
persons
Protect
vulnerable
people
Locate missing
persons
Protect
vulnerable
people
Locate missing
persons
Protect
vulnerable
people
Locate missing
persons
Protect
vulnerable
people
Locate missing
persons
Promote road
safety
Patrol
Neighbourhood
s
Promote road
safety
Patrol
Neighbourhood
s
Promote road
safety
Patrol
Neighbourhood
s
Promote road
safety
Patrol
Neighbourhood
s
Promote road
safety
Monitor threats
Harden
potential
targets
Monitor threats
Harden
potential
targets
Monitor threats
Harden
potential
targets
Monitor threats
Harden
potential
targets
Monitor
threats
Harden
potential
targets
Dissuade
potential
offenders
Provide expert
consultancy to
partners
Dissuade
potential
offenders
Provide expert
consultancy to
partners
Dissuade
potential
offenders
Provide expert
consultancy to
partners
Dissuade
potential
offenders
Provide expert
consultancy to
partners
Dissuade
potential
offenders
Provide expert
consultancy to
partners
Patrol
Neighbourhood
s
Cost of Business
Change to Forces
Cost of Business
Change to Forces
Cost of Business
Change to Forces
Cost of Business
Change to Forces
Cost of Business
Change to Forces
££
£
££££
££
£££££
Slide 19
What’s the first step?
• We recommend an Initial Portfolio Review using our maturity model
derived from P3M3 with additional benefits realisation focus
• The review will allow you to position your organisation on the spectrum of
how “benefits-led” you need to, or would like to become. This will help to
define the scope and scale of your potential change programme – from small
and un-daunting to larger and challenging.
• Whatever you conclude, we are here to support you.
• “Do it • Train it • Support it • Put it Right • Review it • Assure it”
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Slide 20
Selected Clients & Case History
–
Associated British Foods plc
–
Criminal Records Bureau
–
DCSF/BECTA
–
Metropolitan Police Service
–
Ministry of Justice NOMS
–
Home Office
–
–
•
IMPACT Programme
•
Information Assurance Programme
National Policing Improvement Agency
•
Mobile Information Programme
•
Portfolio Development Unit
•
Technology Product Management Unit
•
ISIS Programme
•
Forensics21 Programme
•
Equality and Diversity Strategy
UK Borders Agency
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Large National Portfolio:
 c. £180m p.a. spend
 High profile national IT & business change
programmes
 No method of coordinating, aligning or stopping
programmes. Considerable duplication & waste.
 Cambiel team provided end-to-end process & tools,
data collection & analysis, strategic review, governance
recommendations & mentoring on new approach.
 Complete overhaul of commissioning & investment
appraisal. Fewer programmes started, more being
stopped and/or consolidated into more effective units.
Complex multi-agency governance has complete
visibility of the Portfolio for the first time. Can now
make forward-looking decisions about prioritisation &
resource allocation.
 Approach cited as “good practice” by OGC
Slide 21
Questions and Further Information?
e: info@cambiel.co.uk
t: 01449 737867
www.cambiel.co.uk
20-22 Bedford Row, London WC1R 4JS
© Copyright 2010 | Cambiel Consulting Ltd | www.cambiel.co.uk
Slide 22