Business Case projektin kannattavuuden ja hyötyjen varmistajana

Jori KosonenJori.kosonen@talentvectia.com+358 50 518 4790

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Agenda

• Business Case projektin kannattavuuden ja hyötyjen varmistajana.

• Osallistava dialogi: Arjen haasteet business casen rakentamisessa

• Ketkä rakentavat business casen

• Miksi, ketkä ja kuinka tehdä hyvä business case ?

• Mitä hyvä business case kertoo

• Osallistava dialogi : Hyvän business casen elementit ja kriteerit

• Projektin ja business casen elinkaari, sekä hyötyjen todentaminen ja mittaaminen

• Kokemuksia ja käytäntöjä

• Loppuyhteenveto

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Tilaisuuden alustaja

Jori Kosonen, Talent Vectia, Senior Partner, Executive MBA, IPMA PPMC

• "Yli 10 vuoden kokemus asiantuntija-organisaation johtamisesta ja hallitustyöstä.

• Toiminut yli 10 vuotta vastuullisena liiketoiminnan johtajana ja ollut mukana vaativissa

muutosprosesseissa.

• Kehittänyt organisaatioiden toimintamalleja ja johtamista yli 23 vuotta.

• Toteuttanut yli 1000 johtajan, projektipäällikön ja asiantuntijan henkilöarviointeja.

• Kirjoittanut lukuisia artikkeleja, blogikirjoituksia sekä reshaping program management kirjan."

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Jori Kosonen

EXPERTISE

Senior PartnerExecutive MBA, IPMA PPMC

Reshaping program management author

• A strategic and tactic leader - my personal goal is to help organizations in strategy execution and ensuring successful change throughout leadership.

• Over 20 years’ experience in consulting industry Past 10 years in various leadership positions.

• Over 100 clients, PM consultant and PM in complex change management programs and trained over 20.000 employees

• Successful Renewal Programs

- Growth program, brand renewal, operational model and internationalization programs (Nordic and Baltic)

• Worked with dozens leading international companies in the ICT, electronics, telecommunications, banking, finance, insurance and services industries, both with strategic and business development issues.

• Talent Vectia Oy: Senior Partner, 6/12-

• Talent Partners: Senior Partner, 4/07-

• PMAF, Member of Board 2010-2014, 2017-

• Tieturi:

- CEO 5/05-4/07- Vice President, Strategy 8/02-4/05

• Talent Partners: Senior Partner and Memberof Board, 00-7/02

• Retail store, Managing Director, 96 – 98

• WM-data Kasanen Project Director 94 - 02

• ITS Kosonen Oy: Managing Director 93 - 94

• IBM: Project Manager 89 – 93

• ”Experienced and characteristic personality - ensuring successful change throughout leadership”

• He is a solid and trustworthy producer of results.”

• Reshaping Program Management – 2014, Author

EXPERIENCE & EMPLOYMENT HISTORY

CHARACTERISTICS

IPMA Certified Program and Portfolio Management Consultant (PPMC)

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METHOD

IPMA Certified Program and Portfolio Management Consultant (PPMC)

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Driving growthImproved competitiveness through management and leadership

PM trainings and development Rapid results and permanent capabilities

We ensure capability developmentin your organization

We engage your people and create commitment and ownership

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Assessments• Project and program assessments• PM competence 360 assessments• PM Culture assessment• Personal Profiling (DiSC)

Trainings• PM training programs (Pro, Champs,

Raising the Bar and Professional)• IPMA ICB 4.0 aligned management

and leadership trainings• IPMA D,C -Certification trainings

Consultancy• Project, program and portfolio

management frameworks, tools and methods

• Lean tools and methods• Project’s digitalization

Capability development

Competence development

Tools and methods

Transformation support• Talent program manager• PMO ramp-up and support• Change management programs

Transformation • Lean / Kaizen leader training• Lean Six Sigma Green Belt• Project visualization

Coaching• Individual coaching• Group coaching• Lean coaching certificate

Lean PMO

Agile methods

Support and Coaching

Project management – Why Talent Vectia?

Our promise.

Insights. Execution excellence. People engagement.

Support for project managers with professional project

management and consulting methodologies, tools and

templates.

Help engaging people to change with effective change management and communication.

1) Increased level of PM professionalism

2) Improved project performance

3) Faster benefit realization to project business

4) In depth and customer oriented co-operation

5) Implemented world-class practices

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With theme dedicated Talent Vectia support teams we ensure…

Insights and world class best practices.

Effective change management.

Professional project management.

Content expertise, insights and best practices in the

business operations activities.

Methods. World-class project management approach & methods from APM.

Some references.

In projects, we are committed to deliver desired results. Fast. Talent Vectia’s proven results.

VTT• Project Management trainings since 2017

Ramboll• Project Manager trainings 2015-

Neste • Project Manager trainings 2015-

Helen• Program and portfolio management including alignment

to management system 2015-2016

Posti• Brand renewal program manager 2014

MTV• Integrated project, program and portfolio management

2015-2016

ABB Drives & Marine• PM Support, method and tools in product development,

2012-2013

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Business Case projektin kannattavuuden ja hyötyjen varmistajana

Osallistava dialogi: Arjen haasteet business casenrakentamisessa

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High-performing project organizations…Have lower risk wasting money on projects

© Talent Vectia 11 2013 Project Management Institute, Inc. Pulse of the Profession™, March 2013.

Risk wasting money on projects

• Declining project success rates have ramifications that extend beyond the scope of any individual project

• The dilemma is that an organization can never get back wasted money

% of Projects Not Meeting

Goals

37.7 %

% of Failed Projects’

Budget Lost 35.9 %

% of Every Dollar at Risk

13.5 %x =

28 %

of every euro

at risk

Low performerachieve 60 percent or fewer projects on time, on budget and meeting original goals

High performerachieve 80 percent or more

of projects on time, on budget and meeting original

goals

2 %

Organizations risk losing an average of US$ 135 million dollars for every US$ 1 billion invested in a project.

Some definitionsIPMA OCB

• A business case defining the budget and benefits to be realised by the programme

• A programme typically consists of:• A strategic direction set by top level executives in defining the vision for PP&P

and the KPIs to be achieved.

• An assessment of the present situation (‘as is’) and establishing objectives for desired state and benefits to be achieved at the end of the programme (‘to be’).

• A set of projects to deliver the required outputs to achieve the desired PP&P state and benefits.

• A set of outputs (e.g. changes in processes, structures and competence of people working in and around projects)

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Some definitionsAPM: Governance of Project Management Principles, Definitions

• Project business cases are supported by relevant and realistic information that provides a reliable basis for making authorisationdecisions.

• Business case• The business case provides justification for undertaking a project or programme.

It evaluates the benefit, cost and risk of alternative options and provides a rationale for the preferred solution.

• Benefits management• Benefits management is the identification, definition, planning, tracking and

realisation of business case (benefits).

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CASE

Potential business benefitNext level of professionalism

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Low Performer High Performer (approx.)

Project business value (€) 100 mio 135 mio

Risks in €uro 13,5 mio 675.000 €

Risks related to communication € 7,56 mio 378.000 €

Low Performer

High Performer (approx.)

% Projects meeting goals/intent 37,7 % 10 %

% Project not within budget 35,9 % 5 %

% Risk wasting money on projects 13,5 % 0,5 %

Risks related on poor communications % 56 % 56 %

Talent Vectia’s solutions are aiming to increase in project management productivity.

Viewpoints affecting to benefits potential :• Business volume in €uros • Amount of project• Success rate of each project.

Talent Vectia’s insight of gaining benefits from the portfolio is approximately 50-60 % i.e. 337.500 - 405.000 € / year

Arjen haasteet business casen rakentamisessa

• Jakaannutaan pienryhmiin• Pienryhmät pohtivat ja vetävät yhteen näkemyksensä ryhmän

kokemusten valossa• Kysymys – Millaisia arjen haasteita olette kokeneet business casen

rakentamisessa ?• Näkökulmat

• Projektin omistaja• Projektipäällikkö• Muu

• Yhteenveto fläpille• Aikaa ____.____ saakka

• Esitykset noin 5 min.

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Millaisia arjen haasteita olette kokeneet business casen rakentamisessa ?

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Millaisia arjen haasteita olette kokeneet business casen rakentamisessa ?

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Challenges or OpportunitiesEngaging and implementing the business case

The Ownerships

• Sponsors own the project business case

• Project sponsors are the route through which project managers directly report and from which project managers obtain their formal authority, remit and decisions.

• The sponsor is accountable

• for achievement of the business case and providing senior-level commitment to the

programme.

• As owner of the business case

• project sponsor is responsible for overseeing the delivery of the benefits. So sponsorship role covers the whole project life cycle

Relevant questions regarding to ownership

1. Do sponsors devote enough time to projects?

2. Do sponsors continue in their roles for periodsof time sufficient to ensure accountability?

3. Do project sponsors engage regularly withproject managers and are they sufficientlyaware of the project status?

4. Do project sponsors have sufficient influencewith which to ensure that project managershave adequate resources with the right skills todeliver projects?

5. Are sponsors accountable for and do they own and maintain the business case; is accountability identified for key project documents?

6. Are sponsors accountable for the realisation ofbenefits?

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APM: Directing Change A guide to governance of project managementAPM: Body of Knowledge 6th edition

Usual challenges in the benefits realizationImplementing the business case

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▪ Benefit realization has not been defined during the project planning.

▪ Monitoring of the benefits realization has not been started along with development and/or implementation.

▪ Concrete measurable benefits are not determined.

▪ There is lack of ownership of the benefit realization actions.

▪ Performance and process measures are not linked to benefits realization of the program.

▪ Evaluation of the current stage and definition of thetarget stage has not been done.

▪ Line organization focus is on the operational issues and problems.

Benefits (business case) realizationObjectives

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Ensure that the business gets the value from the change program.

Build linkage between business measures and program deliverables.

Measure progress of the actions and benefits.

Set up simple and clear monitoring model with concrete targets and measurable actions.

Create transparency across program level and local line organization monitoring.

Guide process and system development efforts. Support change management in the deployment projects.

METHOD

Successful Benefits (business case) realization includes all aspects

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Benefit Realization

Professional Program

Management

Change Management

Involving and committing people

to change. New ways of

working

Benefits from professional

program management

Benefits from benefit

realization

Ketkä rakentavat business casen

Miksi, ketkä ja kuinka tehdä hyvä business case ?

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Benefits Realization Management Model Benefits-driven change requires proactive management throughout the entire life cycle

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Source:

Top management

Line Management

Program

Project

Benefits Realization Management Model

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Benefits

Business Changes and

improved capabilities

EnablersBusiness

Objectives

Projects builds enablers

Programs create changes & improved

capabilities

Line management creates benefits with improved capabilities

Benefits contribute to the business objectives

(KPI)

Project Progress MetricsProgram Progress Metrics

Program PerformanceMetrics

Benefit Performance Metrics

Business Performance Metrics

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Benefits Realization Management Model Benefits management process - general

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Step 1: Define benefits

management plan

Step 2:Identify and

structure benefits

Step 3:Plan benefits

realization

Step 4:Implement change

Step 5:Realize benefits

• Key business drivers

• Measurement policy

• Identification of key performance indicators (KPI)

• Roles and responsibilities

• Priorities

• Value tree creation

• Structuring benefits

• Documentation of benefits including priority, interdependencies, value, timescale and ownership

• Performance and progress KPIs definition

• Capturing baseline measurements

• Agreeing targets• Timelines and

milestones for realizing benefits

• Implementation plan

• Measuring benefits realization

• Scanning new opportunities for additional benefits

• Ensuring that benefits continue to realize

• Documentation of long term actions and monitoring for continued realization

source :

Benefits Realization Management ModelBenefits Realization Model in Program Management

• Define Benefits management plan

• Including Benefit Management as a part and basis of Program and Project management

• Identify and Structure Benefits

• Main Performance Metrics definitions and decisions for Program

• Selecting and defining the relevant Performance Metrics and Progress Metrics fort Program Subpojects

• Value trees defined (Progress metrics Performance Metrics Business Performance

• Plan benefits realization

• Progress and Performance Metrics serves as Subproject Management metrics: Ensuring progress (scope, quality, schedule, costs)

• Program Performance Metrics serves Program Management: Ensuring direction and success

• Benefit realization as ”red line” inside the Program and its Subprojects: Ensuring comprehensive focus

Methods by: © Talent Vectia 26

Benefits Realization Management ModelBenefits Realization Model in Program Management

• Implement Change

• As part of Program (e.g. subproject) planning the Change Implementation

• Acitivites of Change Implementation, partly during the program, mainly after Program completion

• Implementaion Planning responsibility: Program Management

• Implementation responsibility: Business Management (= Business Benefits owner)

• Realise Benefits

• Main responsiblity in Business Management (= Business Benefits owner), after Program completion

• Phases: Planning / ensuring the realization of benefits – Agreeing the follow-up procedures –Continuous Ensuring / Improvement procedures

• Benefit realization Metrics are based on Program Performance Metrics

• Can be defined and planned for shorter and longer terms

Methods by: © Talent Vectia 27

CASE

Case - Preparation of the Business Case

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Set program / project

objectives

DefinePerformance

KPIs

ForecastBenefits

Definecosts

Assemble business

case

Reforecast and apply changes

Update the model with

actualnumbers

Business Case -

deliverable

Business Case Management

Corporatestrategy

Project scope and schedule

Scenarios

Business Case Preparation

• The Business Case is created in the beginning of the change program / project.

• The business case consists of assumptions, KPIs, benefits and costs in the structural form.

• The business case is a living document, which will be used during the program and updated on regular basis, or when there is some new information available and when the actual figures evolve.

Benefits Realization Management Model Dimensions of the benefits realization - Aligning projects to organizational strategy

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• Management communication

• Customers and suppliers

• Target setting

• KPIs to drive business value realization

Business management

Performance

• Concept development

• Communication plan

• Competence development

• Testing and piloting

• Training and coaching

• Progress KPIs and follow up

• Support for value realization

Development program

Progress

Business case owner

Steering group

Business organization

Concept creation

Communication

Deployment

Ensuring the benefit realization via performance and progress KPIs

Business lines

Countries/sites

METHOD

• # of activities• # of updates / function• % of training completed• …

• # of customer contacts• Level of customer insight• # of new opportunities /

proposal• # of new solutions deals• Level of employee

satisfaction• …

• Win rate (%)• Value of new deals (€)• …

• Share of wallet (%)• Margin / profitability €/%)• …

Benefit Realization CurveExample

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Training & roll out

Improve Efficiency

Improve Profitability

Improve Quality of Activities“Turbulence, how to do it?”

Data, functionality, operation model issues

=> active issue solving & improvements

Change program/project as the key driver

Business organization as the key driver “No one’s zone”

KPI of change mgmt & value realization:

Phased handover to The Businessorganization

METHOD

Benefit Realization Management & monitoring the progress of the Implementation – approach

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Function 1 Sales

Function 2 Service

Function 3 Spare parts

Function 4 Shared services

Country 1

Country 2

Country 3

Progress KPIs

Performance KPIs

Progress KPIs

Performance KPIs

Progress KPIs

Performance KPIs

Progress KPIs

Performance KPIs

Progress KPIs

Performance KPIs

Progress KPIs

Performance KPIs

Progress KPIs

Performance KPIs

Progress KPIs

Performance KPIs

Progress KPIs

Performance KPIs

Progress KPIs

Performance KPIs

Progress KPIs

Performance KPIs

Progress KPIs

Performance KPIs

Global progress

Global performance

Global progress

Global performance

Global progress

Global performance

Global progress

Global performance

Local progress

Local performance

Local progress

Local performance

Local progress

Local performance

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Change Program

Successful implementation requires both systematic monitoring of the implementation progress, and monitoring of the realized benefits.

GLOBAL implementation and Benefit Realization monitoring

Mitä hyvä business case kertoo

Osallistava dialogi : Hyvän business casen elementit ja kriteerit

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Mitä hyvä business case kertoo

• Jakaannutaan pienryhmiin• Kysymys: Hyvän business casen elementit ja kriteerit• Millaisia asioita hyvä business case pitää sisällään • Mahdolliset näkökulmat

• Investointiprojektit• Kehitysprojektit• Tuottavuusprojektit• Muu

• Yhteenveto fläpille• Aikaa ____.____ saakka

• Esitykset noin 7 min.

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Projektin ja business casen elinkaari, sekä hyötyjen todentaminen ja mittaaminen

Kokemuksia ja käytäntöjä

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CASE 1

1. Business Benefit Elements 2. Benefit Realization Plan

3. Progress follow-up (3 months after roll-out)

4. Correction/ Boosting Actions

Benefit Realization Plan & Progress follow-up

METHOD

Summary of Talent Vectia’s Lean PMO approachEngage people – execute relentlessly– realize the benefits

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ProfessionalProgrammanagement

Change management

Benefit realizationmanagement

• Plan and maintain the program structure and governance model

• Prepare program status reports, provide assistance in project reporting

• Help in prioritizing projects

• Assist in program risk and issue management

• Assist in implementing quick wins

• Ensure sharing of best practices

• Interdependency management

• Maintain the program change management plan up to date

• Run the program-level change management activities

• Provide change management support

• Communicate success stories

• Evaluate program and project progress and results

• Help engaging top level stakeholders

• Help develop a business case for the program

• Further develop benefit realization model and monitoring practices

• Continuously monitor the program progress against expected benefits (progress and performance metrics)

• Take care of reporting the benefits on agreed reporting frequency

• Assist in pilot projects in realizing benefits and reporting them

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PMO is the right mix of program management, change management and benefit realization. PMO’sfocuses actively on supporting planning and delivery of the Renewal program value and benefits.

- Examples of tools -

www.talentvectia.com

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Kiitos ☺

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