Getting Real Business Value from

1
Benefits Realisation
Getting Real Business Value from IT Investments
November 2002 Sheryl Gavin
2
Agenda
Agenda
Whats the problem?
1
Benefits Realisation
The Auckland City Experience
Conclusions
Questions
3
1
Why Benefits Realisation?
4
Whats the problem?
Organisations are spending more and more on IT,
yet
the value of IT, and of IT-enabled business
transformation is being increasingly questioned
5
The current situation

• Integrated project culture is not the norm within
  many businesses

• Project results are variable

• Benefits promised by business cases are usually
  not delivered

• Decisions to invest are made on emotions
  politics

• No visibility of the entire portfolio

• Little proactive management of portfolio content

• Lack of business ownership

6
2
Benefits Realisation What is it?
7
Benefits Realisation consists of three distinct
practices
Portfolio Management
Program Management
Project Management
8
Portfolio Management is
A dynamic decision process that

• Evaluates, selects and prioritises new projects

• Accelerates, kills or de-prioritises existing
  projects

• Allocates and re-allocates resources to active
  projects

9
Where Are You Without Portfolio Management?
Leads to..
Situation
Results in..
Over budget
Projects Late
Business needs not met
Benefits not received
Lack of confidence in IT
10
Program Project Management
11
Getting Benefits The Principles

• Outcomes are valuable, deliverables are only
  capabilities

• Benefits do not appear automatically

• Blended programs of change are required to
  deliver benefits

• Corrective action is almost always required

• A decision to invest is based on potential value

• Balancing the portfolio is an ongoing process

• More opportunities exist than resources required
  to deliver them

• A program is not complete until all benefits are
  delivered

Getting benefits is not a phase of a methodology
it starts on day one!!!
12
The Auckland City Experience
3
13
Major change on the go

• Large, high-impact projects underway
• Deadlines placing pressure on resources

14
A new perspective
IT Investments
15
Two distinct processes
16
New Tools
The Results ChainTM a powerful tool for
definition
All necessary IT and business initiatives
including change management initiatives - scope
of effort
17
New Tools

• Assessment instruments for understanding value
• Strategic Alignment
• Probability of Success
• Financial Worth

• Templates for articulating value
• Value Case
• Benefits Realisation Plan

• Templates for controlling delivery
• Benefits Register
• Status Reporting
• Change Control

18
Value-focused governance
19
The result

• Decisions to invest are based on potential value

• Benefits delivery is planned for and measurable

• Stronger governance (increased accountability)

• Project success rates are on the increase

20
Conclusion
4
21
The benefits of Benefits Realisation

• Alignment
• Projects are aligned with business objectives
• Value
• Portfolio contains very high value projects
• Strategic
• Spending reflects the business strategy
• Timeliness
• Projects are completed on time
• Balance
• Portfolio has a good balance of projects
• Right Number
• Portfolio has the right number of projects

Material from Portfolio Management Industry
Practices Study 2001 Cooper, Edgett
Kleinschmidt
22
Organisational future ( current) shock
ERP
E-Business
Infrastructure
CRM
Many others.
The challenge is to manage programs of business
change to deliver business value...
23
A need to focus on value
24
Benefits Realisation
Getting Real Business Value from IT Investments
November 2002 Sheryl Gavin