Business Change Portfolio Management

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Business ChangePortfolio ManagementEnsuring that business change delivers business value


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To deliver

maximum

benefit to the

business, a

mechanism must be put in

place to ensure that

change is effective,

measurable, and constantly

aligned to high-level

business objectives.

Business Change Portfolio

Management is

that mechanism.

Copyright 2004 Charteris plc. All rights reserved. Business Change Portfolio ManagementPage 2

As the business climate improves, can your business rise again to thechallenge of change?

While many organisations have embraced change, effective change management

remains one of the greatest business challenges particularly following a recession.

Demand for change initiatives may be triggered by shifting customer needs, changes in thecompetitive marketplace, legislation or technology, or takeover or merger. Alternatively,

your business may simply be responding to the seemingly ever-present need to achieve

more with less. But do you still have the skills and mechanisms in place to deliver the level

of change required across your business?

One of the consequences of recession is that knowledge and resources needed during

prosperous times tend to erode or disappear altogether. Some of the earliest casualties are

often the skills associated with discretionary business change.

As the outlook brightens, its vital that your business is able to build, resource, manage,

deliver and measure the optimum portfolio of change to generate maximum business

improvement and value. Our Business Change Portfolio Management services are

designed to meet that challenge.

Business Change Portfolio Management from Charteris is:

A proven, practical and sophisticated framework delivered by a uniquely experienced

team offering highly specialised skills and expertise in change management.

It will enable you to:

Prioritise, plan, resource, manage and execute a complex portfolio of business

change initiatives in the most timely, efficient and cost-effective way possible.

The business benefits are far reaching and can include:

Improved effectiveness and business opportunities throughout the organisation, and

reduced costs

Significantly less disruption to business operations, with faster, simpler adoption of

new processes and improved teamwork and staff morale

Protection and improvement of customer service levels and customer loyalty.

Whatever the drivers of change in your organisation, Charteris has the experience you

need to transform the way you manage change and to make a real difference to the

results that change delivers.

Invest wisely to extract

maximum value frombusiness change.

Margaret Hassall,

Practice Head, Finance and

Media sector, Charteris plc


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The challenges for business change

As the number of business change projects grows, so the challenges, and the need for a

cross-business strategic view, increase. Typical challenges include:

Alignment with business strategy

Many organisations find that portfolios of change projects build up over a number of

years, often with little reference to business goals and objectives.

Cross-business prioritisation

Portfolios of change develop across different parts of the business, yet typically call onthe same shared resources. The lack of a cross-business mechanism for prioritisation can

lead to internal conflict.

Balancing demand and supply

Too often the demand for change cannot be met because resources are spread too thinly,

over too many change projects. And, in many instances, key skills and experience are

simply not available.

Support for ongoing change

Organisations will often conduct a one-off exercise to align the portfolio of change, but

then fail to put in place a process to maintain ongoing alignment.

At Charteris we have the

expertise and the practical

experience to meet the

challenge of change. As

youll see from our brief

case studies on page 11,

our experience in managing

and aligning business

change delivers tangible

results for some of the

largest names in the

Financial and Retail sectors.

Business Change Portfolio ManagementCopyright 2004 Charteris plc. All rights reserved.

Business change in the context of key service management processes

If change is vital to the future of the

organisation, Business Change

Portfolio Management must be at thecentre of its operations and strategy.


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Over the next few pages we outline key elements of the Charteris approach to Business

Change Portfolio Management.

1. Establishing supply capability

Understanding supply and constraintsIn establishing supply capability, we focus on the budget, resources and time available to effect

the change. Equally important, however, is the need to identify and understand constraints.

While budget is often easy to establish, resources are notoriously difficult to pin down,

particularly in large organisations where there is a mix of permanent staff, contractors and

external suppliers. External suppliers will often claim that they have ample resources but

their true capability must be clearly understood. Insight and thorough understanding are

key to establishing precise supply capability.

Constraints will often manifest themselves in the form of limited specialist skills or

perhaps in bottlenecks during project delivery.

If sufficient detail is obtained at this early stage, organisations can plan around

bottlenecks. Leave it too late, however, and some of the more serious bottlenecks may notbe resolved without months or years of development and training.

How Charteris meets the

challenge of change.

Insight and understanding

How many?

Now

Planned

Management capacity

Constraints

Profile

Skills

Knowledge

Availability

Location

Internal/external/outsourced

Who does what?

Where are the bottlenecks?

Can we avoid them or plan around them?

Whats available?Budget

Resources

These might be limited by:

Expertise

Ability to manage and support

Take on rates

Systems availability

Space

Rules and regulations

Time Whats the deadline and is the time

remaining sufficient to deploy thechange?

Is the timing determined by internal orexternal factors?

Culture and capacity for change

Is the organisation constrained in any wayin its ability to take on change?

Collect facts and

gain understanding

Identify and understand

all constraints

Know the true

capability of resources

internal and external

Spot the skills shortages

Plan around

bottlenecks.


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Page 5Business Change Portfolio ManagementCopyright 2004 Charteris plc. All rights reserved.

2. Mapping change demand

Understanding what is to be achieved

The information required about individual demands for change varies by organisation

depending upon the basis used for prioritisation what are the major drivers for change

within the organisation? However, as a minimum they will typically cover: the change

demand category (e.g. is this a legal requirement, or a discretionary spend item?); an

outline plan including the required by date; the projected cost and benefits profiles; and an

assessment of impact on projected bottlenecks.

It is also vital to understand the precise nature of the work: is it a routine project that can

be carried out as part of BAU (Business As Usual), is it a separately managed project

requiring additional resource, or is it a major project or programme requiring a ring-

fenced team?

Be rigorous

Compile full

information on sources

of change demand

Clear categorisation is

vital

Remove or demote

overstated projects

Maintain a clear view of

future demand.


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Take a firm line

Points to note when

setting the baseline

portfolio:

It takes several

iterations to establish a

baseline and regular

reviews to maintain it

Be prepared to

slaughter sacred cows

to establish true demand

for mandatory and

business-critical work

Take account of

existing commitments

(contracts, leases,

support agreements).

It takes time to change

a portfolio.

Ensure that you can

measure objectively

against key criteria,

especially true costsand benefits.

3. Setting the baseline portfolio

From baseline to cross-business prioritisation

Using the knowledge gained of supply capability and demand items, we baseline the

portfolio to ensure that there is sufficient capacity to undertake: Mandatory change projects the projects without which the business will be

closed down

Business-critical change projects the projects without which the business will fail

We then determine what headroom exists to undertake discretionary change projects, and

how many. We set criteria for prioritisation, harnessing sophisticated tools where necessary,

but always ensuring that business basics are in place first. At the basic level we set financial

criteria (such as benefits and payback period) and business strategy alignment criteria.

We also work with you to ensure cross-business prioritisation by putting in place a clear

governance structure, senior-level sponsorship and representation from all business areas,

and formal approval and reappraisal processes.

Cut off!

Projects below the baselineare only started if more

capacity is made available.



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Keeping change on track

It is never enough to simply initiate each project and await completion; rigorous follow

through is essential.

In particular, ensure that work in train continues to be aligned to a high-level, strategic

view of the business. Keep a close eye also on changes in supply capacity and demand

across the portfolio, and adjust priorities and resource allocation accordingly. For example,

early release of resource from a closed or temporarily delayed project may open the door

to rapid completion of another high revenue generating project.

It is this ongoing balancing of the portfolio components to achieve maximum return that

is the essence of Business Change Portfolio Management.

4. Driving into action


Keys to success

Senior business

ownership and

leadership

Effective governance

Corporate buy-in to

agreed processes and

mechanisms across

your business

Accurate capture of

demand from diverse

sources

Effective management

of supply capability,

including resource

allocation and planning,

cost control and

supplier management

Perceptive what if

scenario planning

Proactive customer

relationshipmanagement

Rigorous change

management approach.


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The right level of senior sponsorship is critical to the success of portfolio management,

as decisions will need to be made across organisational boundaries. Typical set up activitieswould cover:

Identification of a senior-level sponsor

Set up of a cross-business forum, either a dedicated steering group or subsumed into

existing management forums

Gaining buy in from the cross-business forum.

Establish an accurate definition of the organisations ability to supply change. This

will cover:

Governance

Programme structure Resources, both internal and external, such as people, budget and technology

Programme and project management processes

Quality management.

This process can result in the identification of quick wins, particularly around any

bottlenecks identified.

Assess how demand is captured and tracked and, where possible, validate the sources. On

the basis of this assessment:

Draw up the current portfolio complete with the key information such as likely

impact on bottlenecks identified and status indicators for each project and thenmaintain it

Agree the categorisation to be used in prioritisation activities and assign projects to

the appropriate categories

Push back on the assessment until there is confidence in the robustness, e.g. is itreally

a legal requirement?

Map the demand against the supply capability and identify the prioritisation challenge.

Using the agreed criteria, put the projects in order of priority allowing a line to be

drawn once capacity has been reached

Agree the prioritised list in the cross-business forum and baseline it

Drive it into action and set up a transition plan to move to the future portfolio.

5. Managing the entire process



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Bringing your business together to achieve sustainable change andmaximum benefit

As the pace and complexity of change increases, the benefits of strategic Business Change

Portfolio Management become ever more compelling.

Portfolio Management, however, is simply one element of the total framework needed to

introduce effective business change that is aligned to your business goals.

Charteris has the experience and skills to link in all business disciplines to achieve the

optimum mix of strategic focus, informed programme and project management and cost-

effective delivery.

Our expertise and accountability in our three key disciplines Business, Projects and

Technology will help to ensure that business-aligned change is not only delivered, but

delivers measurable business benefit.

6. Linking the business for maximum strategic value



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Our services across three

key disciplines Business,

Projects and Technology

are designed to help you

and your clients meet the

most demanding business

goals promptly and reliably.

Business

Projects

Technology

Much of this document is concerned with process. But process no matter how methodical

and intelligent is nothing without insight and pure been there, done that experience.

At Charteris it is our people that make the difference. They offer a rare blend of business

experience, expertise and technological flair, enabling Charteris to provide the essential

bridge between business and technology.

That our people have helped create and manage some of the most demanding portfolios

of change in the business world, we believe, is further evidence that Charteris can help

you change your business for the better.

Our strengths

Proven in-depth portfolio management expertise

Highly experienced practitioners

Bridging between business and technology

End-to-end business consultancy, project management and technical

delivery capability

Independent, practical, results-driven approach

Performance improvement and measured business benefits

Our Business Change Portfolio Management expertise

Design and set up of all or parts of Business Change Portfolio Management

Review of existing processes and mechanisms

Definition of demand portfolio including categorisation

Definition of supply capability

Programme and project mobilisation

Programme and project management

Coaching and mentoring

Why Charteris?

Experience the difference



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Managing global change for Reuters

Situation: Reuters needed to carefully manage a complex programme portfolio generated

by massive organisational change throughout its worldwide operations.

Charteris role: Reporting directly to the Reuters board, Charteris helped develop a

strategy for restructuring the entire business, involving some 17,000 people in over 100countries. The objective was to wrap the business around the customer.

Solution: Charteris managed the shift from product service and offerings principally driven

by technology and technologists, to a customer-facing offer driven by business-focused

units. A simple but effective governance process was put in place to assess aggregate

demand from business units, align this with corporate needs and strategy, and then prioritise

the funding of product development. The system has now been in use for two years and

is the key mechanism by which business change portfolios are managed at Reuters.

Providing strategic IT leadership for a leading retail banking group

Situation: Between 2000 and 2002, in one of the largest systems integration programmes

ever undertaken, this customers IT development unit was focused almost entirely onmerging its IT assets with those from another of its High Street banking brands. Virtually

all new development was put on hold.

Charteris role:With integration complete, the flood gates of demand for new products

and IT support were opened. Charteris was engaged to provide strategic leadership to the

IT unit's programme management office to help cope.

Solution: Processes were put in place to take aggregate demand from business units,

categorise it into mandatory and non-mandatory classes, establish consistent business

cases, and then prioritise. Charteris helped the IT unit adopt a flexible resourcing and

procurement strategy to optimise the programme portfolio by delivering maximum

business benefit for money spent. We also assisted in the transformation of the unit from

a pure development shop to a highly effective channel for IT procurement.

Improving disparate IT group services for a major utilities company

Situation:The customers IT department consisted of disparate units, each originally

located within diverse operating divisions serving a range of markets. Although the units

had been merged, there were concerns at board level that the combined IT group was not

delivering the levels of technology-enabled business advantage needed in each market.

Charteris role: Charteris was commissioned to undertake a comprehensive and wide-

ranging review of the IT group, which was facing an increasing backlog of demand for

business change and new systems development.

Solution: Charteris helped put in place a demand management process that ensured the

right prioritisation of activity across all business units, reduced demand backlog andidentified new procurement methods which would allow key activities to be completed

without the IT group acting as a bottleneck.

From our own portfolio


Charteris told

me thatchange is

something an

organisation has to own.

This is sound advice:

because you have to win

the hearts and minds of

the team, they have to

believe in the changes you

are making. However, it

was extremely valuable to

have an independent,experienced organisation

at our sides to make sure

that we didnt fall into

traps, to keep us honest to

our cause and to keep up

the momentum. Charteris

fulfilled just

that role.

David

Grigson,Finance Director, Reuters plc.


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About Charteris

Charteris was founded in 1996 by a group of senior executives from the IT and

Consultancy industries and is listed on the Alternative Investment Market (AIM).Charteris employs around 90 experienced business and technical consultants with

many years of experience, further supported by a network of around 200 associates.

Charteris has three market-focused practices:

Finance & Media

Government, Legal, Utilities & Energy

Retail, Manufacturing, Distribution & Technology

Charteris services are organised into three disciplines Business, Projects and

Technology to provide clients with the essential bridge between businessand technology.

Business

Practical experience of improving business performance and potential through

increased operational effectiveness and the strategic application of technology

Projects

Industry-leading experience applied directly to the most challenging projects and

programmes for business success

Technology

Hands-on experience of the latest proven technology to deliver maximum benefit

with minimum risk

For more information on Charteris, visit www.charteris.com, email [email protected]

or telephone +44 20 7600 9199.

The essential bridge betweenbusiness and technology

Charteris plc

Head office:

Charteris House,

39/40 Bartholomew Close,

London EC1A 7JN

Tel: +44 (0)20 7600 9199

Fax: +44 (0)20 7600 9212email: [email protected]

www.charteris.com


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