Transcript No Slide Title

Ranking Portfolio Initiatives
The challenge of defining workable
prioritisation criteria
APM PfM SIG
14/06/12
Bernard Marshall
Building a change portfolio
• Defining prioritisation criteria
– Distilling criteria from strategic documentation
– Challenges and practicalities
• Building the rankings list
• Building a coherent portfolio
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Preparing for the future
Running the
Business
Improving the
Business Defining new
Building infrastructure
strategy
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Initiative Process and Pipeline
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Re-direct
Resource
Seed
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Set Direction
Nurture
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Channel
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Terminate
Ideas
Experiments
Projects
Terminate
Solutions
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NewCo Initiatives (sample)
January, 2013
February
March
April
May
June
July
August
Vision/Strategy/Planning
New Brand Identity
New Business Unit
Product Development Process
Organizational Design
NewCo Environment Definition (“Culture” and Employee Assimilation
Infrastructure Development
Employee Self-Services
NewCo@NewCo
New International Office Locations and Moves
NewCo.com Reorganization
Pack-Out and Distribution Transition
Customer-Relationship Management System
Virtual Supply-Chain
Web-enabled Information Warehouse
New channels to market
ACQUISITION(S)
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Criteria – Strategic and Business Rationale
You should ask these questions about each
initiative / programme / project.
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Why do we have to deliver this initiative and
why now?
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How does it fit with other initiatives already
planned or underway?
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Who are the main stakeholders and partner
organisations?
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Do we understand the scope, what success
will look like, and is it supported explicitly by
both users and stakeholders?
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What is the critical path and how will we
know we are on track?
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What is our track record for managing
similar initiatives?
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Have we identified the main risks and do we
have explicit plans to manage them?
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Are we confident about our leadership, skills
and capabilities to achieve success?
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Is the budget affordable for the overall
initiative and the work to be done through to
the next stage?
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What are the plans for evaluating the
outcome of the initiative / programme /
project?
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How does this initiative contribute to your
authority’s business strategy?
Is the high level business case complete – that
is, is it affordable, achievable, with a wide
enough range of options explored and likely to
achieve value for money?
Have we taken account of the wider policy
context, including other critical policy
initiatives such as FoI, the Efficiency Agenda,
etc., where relevant?
Have the critical success factors and benefits
been agreed with key stakeholders?
Has a feasibility study been completed
satisfactorily, with a preferred way forward?
Do we have internal / external authority and
stakeholder support for the initiative?
Have we identified the major risks and do we
have outline risk management plans?
Are the scope, scale and requirements
realistic, clear and unambiguous?
Can we confirm our planning assumptions,
including timescales and the impact of any
other enabling or interfacing initiatives?
and
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Is there a clearly defined and agreed
governance structure with nominated key roles
and responsibilities?
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Sample Ranking Criteria
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Regulatory Compliance
Policy Imperatives
Risk mitigation or avoidance
Return on investment
Cost avoidance
Competitive differentiation
Market share
Revenue
Innovation
Flexibility/agility
Nearness to delivery
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Simple Categories
• Compliance projects
• Strategic Projects
• Operational projects
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Weighted Indexing
• Establish the relative value of the
investment
• Compare across multiple unrelated
criteria
• Provide Aunt Sally but ensure that
leadership gets to define the final
criteria and weightings
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One of the many matrices to help
illustrate your work
Bread and Butter
Pearl
White Elephant
Oyster
Feasibility
Credibility
Fit
Readiness to deliver
Relative costs
Quality of Approach
Value
Strategic relevance
Financial reward
Speed to market
Synergies and complementarity
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The Challenges
• Need for neutrality – process needs to be
seem as extremely impartial
• Define the criteria as part of the strategy
work – not the planning work
• Only a model to help simplify
• Start with an naïve objective caricature and
then let the key decision makers justify why
they are moving away from the model
• Look out for inflation
• Quality of the information available
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From entry criteria to planning criteria
• Multiple assessment criteria,
quantitative and qualitative data and
tools to collect it
• Not just a linear process – portfolio
needs to be reviewed for balance and
>Σparts
• Sequencing
– How and when to run the project in the context
of the wider portfolio
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Thank you for your attention!
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Initiative Portfolios
Integrating initiatives into logical portfolios
delivers benefits of:
• Speed
– Integration
• identifies dependencies and manage sequencing
• minimizes competing priorities
• maintains focus
– Knowledge Management
• creates internal competency for managing change
• lessons learned collected in central repository
• Reduced Cost and Confusion
– prioritizes and allocates resources appropriately
– reduces rework and redundancies
– enables employee understanding and acceptance
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Balancing the Portfolio – cost/benefit
Benefits
• Regulatory
Costs
• Money
• Commercial
• Resources
• Financial
• Risk
• Operational
• Attention
• People
• Commitment
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Alignment to Organisation Strategy
1. Customer Service Excellence
Customer Relationships
– Strategic Imperative
2. Data Provision and Information Support
Enabling Culture –
Strategic Imperative
5. Vehicle Registration Modernisation
Products & Services
Innovation –
6. Driver Licensing Modernisation
7. Operational Excellence Delivery
Strategic Imperative
Operational Excellence –
Strategic Imperative
Strategic Imperatives
4. Electronic Vehicle Licensing
Policy Influence –
3. Business Excellence Delivery
Strategic Imperative
PROGRAMMES
Knowledge Management
– Strategic Imperative
8. Vehicle Taxation and Enforcement / Compliance
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Mapping Initiatives to Priorities
Once Step 1 has been completed and all of the council’s key objectives have been agreed and all relevant projects and
initiatives selected, they can all be plotted onto a plan as outlined in this example.
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Collecting Project Date (illustration)
Project code, Name of project, Short description, Project manager, Contact details, Sponsor, Directorate, Project Type (MSP), Start
date, Finish date, Duration (months), Not started, Complete, % complete (time),
1st Priority Theme, 2nd Priority Theme, 3rd Priority Theme
Statutory, Political, Strategy, Improvement, Maintenance - "Cat Index"
Dependencies , Links to other projects, File name
(weighting), No of Objectives contributed to
Total budget: approved – real, Budget for analysis, Spend to date: approved – real, Committed spend: approved – real, Spend to
complete: approved – real, Approver, Approved, Approval level, Budget owner/Service Mgr, Key stakeholders, Customer
Number of staff involved - Direct >75%, >25%, >5%, Total direct, Number of staff involved - Indirect >75%, >25%, >5%, Total indirect,
Estimated FTE months – Direct, Indirect, FTE sum
Is customer satisfaction being measured as part of the project?
Is the project part of a programme?
No
Comments
Has Managing Successful Projects methodology been applied?
Is there a documented Project Initiation Document?
No
No
Which one?
No
Comments
Comments
Comments
Deliverables, Next key milestone, Expected Benefits Date
Does the project enable continuous improvement? No, Comments
Will the project contribute to evidence based decision making? No, Comments
Will the project contribute to how performance is measured? No, Comments
Will the project positively impact BVPIs? No, Comments, Which ones?
Will the project increase staff skills? No, Comments
How quickly will this impact occur (months)?
How much will the project save (£)? FTEs, Time, Process
Efficiency project, Estimated saving, % of cost, Effectiveness project,
N/A, Notes Direct, Enabler, Approved, Real
Is the saving a one off or on-going saving? How long (years)?
Statutory requirement: Is your project necessitated by law/regulation? Direct- Indirect, Which one? Notes
Political commitment: Is your project required to deliver on a political commitment? Direct - Indirect
Which one? Notes
Strategic priorities: Is your project delivering on a strategic commitment form the corporate plan? Direct – Indirect Which one? Notes
Performance: Is your project in response to an external performance improvement target? Direct
Is your project in response to an external performance improvement target? Direct, Which one? Notes
Maintenance - Is the project in response to a maintenance need? Direct – Indirect, Which one? Notes
Is your project in response to some other imperative? Direct - Indirect
Which one? Notes
Link to Key Council Partner? Links to other projects, Number of customers impacted (#)? Communities, Adults, Children,
Business, Ease of redeployment, Can be wound down quickly? Priority index, Portfolio home, Projects for review
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Analysis Tools
Portfolio Rationalisation
Portfolio Matrix Identifier
This tool helps a manager be clearer about the reason for each project and the business goals
being served. It is easier to harness the different contributions required to reach goals, to
integrate contributions, and to prioritize projects.
Purpose:
Identify the full range of projects that to
develop the strategic capabilities
necessary to deliver strategic change
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How to Create:
• Generate projects from the
capabilities
• Prioritize, sequence and plan the
transformation
• Identify the key methods and
techniques required for each project.
• Identify key dependencies
• Confirm what to STOP doing
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Using the scorecard to drive the organisation’s change
programme
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Corporate
Scorecard measures
Results
Measure 1
Measure 2
Measure 3
Measure 4
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Measure 1
Measure 2
Measure 3
Measure 4
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Customer
Processes
Measure 1
Measure 2
Measure 3
Measure 4
People
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Measure 1
Measure 2
Measure 3
Measure 4
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This tool helps in prioritizing projects.
Project Prioritization Matrix
Purpose:
Out of the full range of potential projects,
agree which projects to prioritize
• Map the potential projects along the three
dimensions:
• time to respond
• ease of implementation
• impact on business
• Use color coding to identify which projects to
stop (red), park (yellow) and prioritize (green)
• What else can drive priorities?
• externally imposed deadlines
• the client's preferences
• internal politics
• critical paths
• resource burdens
• project staff
• balancing with day to day business
• assimilation capacity
• benefit delivery profiles
• greatest impact
• continuous flow of benefits
• risk management strategies
Impact on Business
How to Create:
High
Low
Long
Time to respond
Short
Low
Ease of
implementation
High
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PRODUCT PORTFOLIO ANALYSIS
Purpose:
Analyze the relative strengths of a
company's array of products and
determine appropriate strategies for
each
This analysis illustrates product performance and suggests product
strategies; for example: high competitive position coupled with high
market attractiveness suggests investing to grow at the maximum
digestible rate.
How to Create:
Invest
DSU
STRONG
• Use available internal and external
sources to collect data on indicators
of market attractiveness and
competitive position such as market
share, % revenue growth, and
revenue in absolute dollars for each
of the company's product lines.
• For each product, graph growth rate
vs. relative market share; scale the
data points to reflect product revenue
in absolute dollars.
• Divide each axis into three sections –
low, medium, and high – to form nine
subdivisions on the graph.
Network
Management
Traditional Services
MEDIUM
WEAK
Leased Line
Modems
High
Speed
Dial
Modems
Low
Speed
Dial
Modems
Data
Encryption
Fiber
T1 Access
T1 Mux
Disinvest
LOW
Remote/Bra
nch Access
Routers
Hubs
MEDIUM
MARKET ATTRACTIVENESS
> $500,000
$10 M in FY 1994
Budgeted Revenue
STD Mux
COMPETITIVE
POSITION
Operating Profit
HIGH
< - $500,000
Bubble
FIT VS. ATTRACTIVENESS MODEL
May oversimplify market situation. Requires judgments which are subjective in nature
CATEGORY EVALUATION - SPECIALTY/SPIN-OFF
Purpose:
To optimize strategy by developing a
sense of the realistic state of the market
and company affairs
High
How to Create:
• Identify product, category or market
overall attractiveness as being low,
medium, or high. Plot along x-axis
• Identify product, category, or market
fit with company objectives as being
low, medium, or high. Plot along yaxis
• Evaluate newly created matrix; aim to
reveal products, categories, or
markets that fall under high overall
attractiveness and high fit with
company objectives
Category
Fit With
Company
• Baked Goods
• Bulbs
• Cheese
• Fruit
• Kitchenware
• Meat/Seafood
• Nuts
• Seeds
• Trees/Shrubs
Medium
Low
• Crafts
• Personal
Care/Grooming
• Specialty Apparel
Low
Categories included in existing
or planned specialty books
EXAMPLE
• Stationery
• Decorative
Accessories
• Indoor Plants
• Gourmet Food
• Bed/Bath
• Pool/Patio/Gardening
• Camping Equipment
• Children’s Apparel
• Drug/Vitamins/Health
Food
• Hardware/Tools
• Athletic Equipment
• Fishing Equipment
• Hunting Equipment
• Sporting Good
Apparel
Medium
High
Category
Attractiveness
Recommended additional
specialty book venture
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Project Responsibility Assignments
Project Sequencer provides a basis upon which to discuss sequencing and priority of activities
(projects and programs).
Purpose:
Identify the right sequence of projects
and programs for the business
How to Create:
• We have identified a "default change
sequence" from our own extensive
experience and academic research
into further case studies
• This provides a starting set of
assumptions for the best sequence
for major change programs
• These must then be matched and
tailored to the specific needs of each
organisation.
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Convergence Gap Analysis
challenges and opportunities of potential projects.
Purpose:
Understand potential
opportunities and constraints
facing the client in taking
advantage of business
opportunities
Innocence
Alliance and
Partnership
Management
Alliances are looked upon with
scepticism.
Alliances are means e.g. of getting
access to channels
Alliances are entered with self
understanding and goal clarity
Alliances are seen as a way of
pooling resources in a wider context
Customer
Relationship
Management
Market and company defined in
terms of products
Lip service paid to customer
lifetime value
The organisational focus is on the
customer, not the product
Ensure that production respond to
customers, not vice versa
Customer Information
Management
Use customer information to
understand and acquire
customers
Become customer centric by using
information to manage the
complete relationship, meeting
needs and providing value added
services through alliances
Corporate Brand
Management
Use customer i
Become custo
Innovation
Management
Has a managed style to
innovation
How to Create:
• The Burke-Litwin questionnaire
should be applied.
Excellence
Management of
Facilitating
Technology
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