The PPSO SIG Spring 2006 Conference

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The PPSO SIG Spring 2006 Conference
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Agenda
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How to identify benefits!Benefits realisation
John Zachar Principal consultant CITI Limited
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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
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What is a benefit?

• Main Entry 1benefit
• 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 BENEFACTION2
  a something that promotes well-being
  ADVANTAGE
• b useful aid HELP3 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 policy4 an entertainment or
  social event to raise funds for a person or cause

Merriam-Webster On-Line
http//www.m-w.com/cgi-bin/dictionary
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What is a benefit?

• Prince 2 Manual no definition

• PMI BoK 3rd Edition no definition

• APM Pathway addresses benefits, but a bit
  nebulously

• 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 2nd Ed., Prentice Hall,
  2000

• 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').

Most projects are put in place to deliver
products that will lead to benefits.ePMguide,
CITI Limited,
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Benefits

• Tangible

• Intangible

• Real benefits, not wishful thinking
• Not over egged to attract the funding
• Realisable (SMART)

Risk avoidance
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Tangible benefits

• Cost avoidance
• Additional revenue
• New revenue

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Intangible benefits

• Strategic match
• Competitive advantage
• Competitive response
• Management information

Value linking Value acceleration Value
restructuring
Information Economics, Parker, Benson, Trainor,
Prentice Hall, 1988
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Impacts vs. benefits
Deliverable (Product)
Impact(Change)
Benefit
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Impacts vs. benefits
Fault diagnosis database
Deliverable
Faults diagnosed over the phone
Impact
Fault fixed on first visit
Impact
Fewer visits required
Impact
Fewer engineers required
Fewer spares required
Impact
Tools Vans
Lower salary expenditure
Reduced inventory costs
Benefit
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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?

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Q As

• John Zachar
• Principal consultant
• CITI Limited
• Lovat Bank, 37 Silver Street,
• Newport Pagnell, Buckinghamshire,
• MK16 0EJ
• 01908 283 600
• jzachar_at_citi.co.uk