The PPSO SIG Spring 2006 Conference…

Agenda 9: :30Registration 10: :15“How to Identify Benefits” – John Zachar 11: :35Coffee / networking 11: :45“Changing Project Management Processes to Include Benefits Realisation” – David Marsh 12: :00Lunch / networking 14: :45“Extending Progress Reporting to Include Benefits” – David Marsh 14: :00Tea / networking 15: :45“Embedding changes” – Terri Kinton 16:00Close

How to identify benefits! Benefits realisation John Zachar Principal consultant CITI Limited

Why should a PPSO be interested?  Strategic fit of project  Maximisation of portfolio value  Validity of business case  Resource (people) optimisation  Portfolio risk diversification / management  Demonstration of PSO proactiveness MoSCoW

What is a benefit? Main Entry: 1ben·e·fit Pronunciation: 'be-n&-"fit Function: noun Etymology: Middle English, from Anglo-French benfet, from Latin bene factum, from neuter of bene factus, past participle of bene facere 1 : archaic : an act of kindness : BENEFACTION 2 a : something that promotes well-being : ADVANTAGE b : useful aid : HELP 3 a : financial help in time of sickness, old age, or unemployment b : a payment or service provided for under an annuity, pension plan, or insurance policy 4 : an entertainment or social event to raise funds for a person or cause Merriam-Webster On-Line

What is a benefit?  Benefit: something that can be couched in measurable terms — a tangible benefit (e.g., 'a cost saving', 'more sales of existing product X', 'sales of new product Y') — or a non-tangible benefit (e.g., 'customer satisfaction').  Prince 2 Manual – no definition  PMI BoK – 3rd Edition – no definition  Benefits – Quantified increases in revenue, decreases in costs, reductions in working capital and / or increase in performance which occur directly as a result of a project. Project Workout, Roberet Buttrick 2 nd Ed., Prentice Hall, 2000 Most projects are put in place to deliver products that will lead to benefits. e:PMguide, CITI Limited,  APM Pathway – addresses benefits, but a bit nebulously

Benefits  Tangible Risk avoidance  Intangible  Real benefits, not wishful thinking  Not over egged to attract the funding  Realisable (SMART)

Tangible benefits  Cost avoidance  Additional revenue  New revenue

Intangible benefits  Strategic match  Competitive advantage  Competitive response  Management information Value linking Value acceleration Value restructuring Information Economics, Parker, Benson, Trainor, Prentice Hall, 1988

Impacts vs. benefits Deliverable (Product) Impact (Change) Benefit

Impacts vs. benefits Fault diagnosis database Deliverable Impact Faults diagnosed over the phone Fault fixed on first visit Fewer visits required Fewer engineers required Fewer spares required Lower salary expenditure Reduced inventory costs Impact Benefit Tools & Vans

Benefit realisation plan  What is the expected benefit?  What is the value / how will it be measured?  What impacts (changes) are required to realise the benefit?  When will those impacts occur? (When will the product(s) be delivered that will spawn the impacts?)  How can I verify that the benefit has actually been acquired or realised?  Who is responsible?

John Zachar Principal consultant CITI Limited Lovat Bank, 37 Silver Street, Newport Pagnell, Buckinghamshire, MK16 0EJ Q & As