Delivering the Prize

Sponsored by

Delivering the PrizeA joint all-Ireland study on change leadership and benefits realisation

May 2012

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Foreword ............................................... 3

Snapshot of Key Findings ....................... 4

Glossary of Terms ................................... 5

Section 1: Your Role ............................... 6

Section 2: Your Change Environment...... 8

Association for Project Management (APM) APM’s mission statement is: “To develop and promote the professional disciplines of project and programme management for the public benefit”. APM is the largest independent professional body of its kind in Europe. We have 19,500 individual and over 500 corporate members throughout the UK and internationally. Our aim is to develop and promote project management across all sectors of industry and beyond. Through APM, members directly influence and shape their profession, celebrating their professional achievements and contribution to the profession. Get involved in a community of over 19,500 members through APM’s extensive branch network and Specific Interest Groups. Ibis House, Regent Park T. +44 845 458 1944Summerleys Road, F. +44 845 458 8807Princes Risborough E. [email protected], HP27 9LE W. apm.org.uk

Chartered Institute of Management Accountants (CIMA)The Chartered Institute of Management Accountants, founded in 1919, is the world’s leading and largest professional body of Management Accountants, with 195,000 members and students operating in 176 countries, working at the heart of business. CIMA members and students work in industry, commerce and not-for-profit organisations. CIMA works closely with employers and sponsors leading-edge research, constantly updating its qualification, professional experience requirements and continuing professional development to ensure it remains the employers’ choice when recruiting financially-trained business leaders. CIMA and AICPA, the American Institute of Public Certified Public Accountants, two of the world’s most prestigious accounting bodies, have formed a joint venture to elevate the profession of management accountancy by establishing CGMA as the most valued, globally recognized management accountant designation. CIMA Ireland T. +353 1 643 04005th floor, block E F. +353 1 643 0401Iveagh Court E. [email protected] Road W. www.cimaireland.comDublin 2Ireland

DeloitteDeloitte provides audit, tax, consulting and corporate finance to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world class capabilities and deep local expertise to help clients succeed wherever they operate. Deloitte’s approximately 182,000 professionals are committed to becoming the standard of excellence. Dublin BelfastDeloitte & Touche DeloitteDeloitte & Touche House 19 Bedford StreetEarlsfort Terrace BelfastDublin 2 BT2 7EJT: +353 1 417 2200 Northern Ireland F: +353 1 417 2300 T: +44 2890 322861W: www.deloitte.com/ie F: +44 2890 234786 W: www.deloitte.com/uk

Contents

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In the context of the continuing economic situation it is increasingly important that organisations get the most possible value from their investment in change; statements like this are not new - getting the best value for your money has always been important. It is perhaps an indictment of certain business cultures that many have only come to this realisation with the impact of tougher times and an unforgiving economic environment.

CIMA believes it is in this environment that benefits management establishes itself as an essential part of professional project and programme management. While successful project delivery remains essential, it is the management and realisation of benefits that will ensure change projects have the desired results – project management is not just about delivering capacity or capability, it is about delivering value driven change to underpin sustainable enterprises in the longer term.

We must further accept that change and the successful delivery of benefits requires robust financial management and systems. Thus the co-operation and strengthening relationship between CIMA and APM is good news for effective change leadership. This is particularly true for benefits management, where the combination of the skills and expertise of both organisations and their members, working in tandem, will ultimately increase the chances of project success and the realisation of planned benefits.

Thank you for taking part in this survey and once again sharing with us, and your fellow practitioners, the challenges you face and the steps you are taking to meet them.

I would also like to thank Deloitte for sponsoring the survey and contributing to its overall success.

Patrick BarrChairman, CIMA Ireland

I’m delighted with the response to our all-Ireland survey of project and finance professionals. I would like to thank everybody who contributed to its success. One of the missions of this survey was to gain insight into the challenges faced by managers and their organisations in realising benefits from investment in change. I’m encouraged by the level of interest from both professional disciplines, highlighting the importance of effective partnership working across organisations to enable successful benefits realisation.

Our survey reveals that benefits realisation is important to all industry sectors. Collectively, the public sector accounts for 23% of all respondents whilst manufacturing represents 15%. The response rate was encouragingly high demonstrating the importance of benefits realisation.

Clearly, the current economic climate has focused attention on the value that organisation’s derive from investing in change. Fifty-two percent of respondents cite that economic conditions have significantly impacted their organisation’s investment in change. In addition, 88% of respondents cite cost reduction as a strategic driver of change in their organisation. This strong focus on cost reduction is also enhancing how organisations approach benefits realisation. Benefits realisation can no longer be considered an add-on at the tail end of project delivery – the prize is not optional.

Overall, our survey highlights the need for closer partnership working between project and finance professionals across organisations to enable successful benefits realisation. Our survey also reveals that there is considerable synergy to be gained from cross-profession sharing of knowledge and best practice. I’m delighted that the APM and CIMA are working together to enhance professionalism in this important area.

Peter GlynneChairman APM Benefits Management Specific Interest Group

Foreword

Contents

3

Snapshot of Key Findings

69review projects

%of respondents organisations undertake a post implementation review of projects however 60% cite this as only contributing to bene�ts realisation ‘some of the time’ or never

42implementation

of respondents claim that executive commitment during the project/programme implementation phase most positively supports the realisation of bene�ts in their organisation, while 11% cite business as usual ownership of bene�ts during the post-implementation phase

69benefits management

%of respondents cite that their organisation’s current approach to bene�ts management only provides value ‘some of the time’ or never

%

55benefits

%of respondents describe their organisation’s approach to bene�ts realisation as either informal/ad-hoc or incidental

88cost reduction

of respondents cite cost reduction as a strategic driver of projects and programmes across their organisation

52economic impact

%of respondents claim that economic conditions have had a signi�cant impact on their organisation’s investment in change

%

4

1. Which best describes your main role?1. Which best describes your main role?

Finance managerManagement accountant

OtherConsultant

Head of departmentDirector

Finance analystFinance director

Project manager/senior project managerOperations manager

Portfolio managerProject team leader

Business change managerProgramme manager

Benefits manager

19%12%

9%8%

8%8%

7%7%

5%5%

4%

3%2%

2%1%

0% 5% 10% 15% 20%

It is not surprising to see that the largest group of respondents, 45%, describe themselves as finance directors, finance managers, management accountants, or financial analysts. This indicates a strong level of interest in benefits realisation from the finance profession, also recognising the ever closer links between delivery of change and cost reduction. It is encouraging to see that professionals outside of traditional project and programme management roles are taking a close interest in the delivery of change. It is also encouraging to see such a broad range of roles across the finance and change professions having a strong interest in benefits realisation.

2. Are you currently a sponsor/senior responsible owner (SRO) with overall responsibility for any change projects/programmes?

Yes

No

2. Are you currently a sponsor/senior responsible owner (SRO) with overall responsibility for any change projects/programmes?

69%

31%

Interestingly, 31% of all respondents describe themselves as a sponsor or SRO. This level of response emphasises the importance of benefits realisation to the leadership of change. In many organisations, the sponsor or SRO is accountable for the realisation of benefits from their project/programme.

3. Have you got a specific responsibility for benefits realisation within your role?

Yes - implicit

Yes - explicit

No

Unsure/don’t know

3. Have you got a specific responsibility for benefits realisation within your role?

44%

24%14%

18%

44% of respondents do not have a specific responsibility for benefits realisation highlighting the broad nature of respondents' roles across the finance and change communities. It is encouraging that 42% of respondents do have a specific role for benefits within their organisations. This supports the APM's 2020 vision: 'a world in which all projects succeed' and CIMA's mission statement: 'helping people and businesses to succeed'.

4. Which sector does your organisation belong to?4. Which sector does your organisation belong to?

38%

ManufacturingFinancial services

ConstructionEducation

Central governmentProfessional services

Information technologyOther

Local governmentEnergy

Distribution / logisticsHealth

PharmaceuticalTelecoms

RetailLeisure / sport

Media

15%13%

12%8%8%

7%7%

5%4%4%4%

3%3%3%

2%1%1%

0 3 6 9 12 15

Our survey is reflective of a broad range of sectors across the island of Ireland. This is particularly encouraging as it highlights the importance of benefits realisation to all projects and programmes, irrespective of the sector. When combined the public sector represents 23% of all respondents, whilst manufacturing is the single biggest individual sector at 15%. Interestingly, financial services and construction combined account for 25% of respondents, two of the sectors most impacted by the global economic downturn in recent years.

Section 1: Your RoleOur survey reveals the profile of respondents with a strong interest in change and benefits realisation. We asked professionals about their role, the structure of their organisation and the type of change currently taking place.

5

5. How many employees are in your organisation?

Less than 20

21 -100

101 - 500

501 - 1000

1001 - 2000

2001+

5. How many employees are in your organisation?

11%

15%

30%

19%

16%

9%

Over 39% of respondents work for organisations that employ more than 1000 people, reflecting the more traditional strong interest in benefits management across large organisations. Organisations employing 100 people or less account for 34% of respondents. It is encouraging to see a strong focus emerging within small to medium sized organisations. This suggests that the recent focus on cost reduction across the Island of Ireland has also resulted in a greater emphasis on benefits realisation across the SME sector.

6. How many projects are currently underway within your domain/responsibility?

Less than 5

5 to10

11 to 50

51 to 100

100+

6. How many projects are currently underway within your domain/responsibility?

14%

59%21%

3%3%

The largest group of respondents manage less than five concurrent projects reflecting a strong interest in benefits realisation from the mainstream finance profession, which typically would not have full-time project responsibility. 35% of respondents manage between five and 50 projects reflecting a more senior level interest in benefits realisation.

7. Which of the following categories best describe the above projects/programmes?

7. Which of the following categories best describe the above projects/programmes?

38%

Business transformation

Financial management

Construction/built environment

Information & communication technology

Managerial effectiveness

Procurement effectiveness

Other

Product development/acquisition

Human resources

Customer relationship management

23%

30%

8%

13%

14%

4%

2%

1%2%

3%

0 5 10 15 20 25 30

As anticipated, business transformation and financial management account for a large proportion of projects and programmes within respondents organisations (53%). This is no surprise in the current economic climate where process efficiency and cost reduction are major drivers of change. Surprisingly, construction/built environment accounts for 14%. This is against the backdrop of significantly reduced investment in the construction sector from the peak of the economic boom. It is also surprising that procurement effectiveness only account for 4%, recognising the strong contribution of procurement effectiveness to quick-win cost reduction.

"31% of respondents describe themselves as a sponsor or SRO highlighting the importance of benefits realisation to successful leadership."

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8. How has the current economic situation impacted your organisation’s investment in change projects/programmes?

All new investment in change stopped

No impact

Limited Impact - only impacting parts of the organisation

Significant Impact - noticeable across the entire organisation

8. How has the current economic situation impacted your organisation’s investment in change projects/programmes?

52%37%

7%4%

It is clear that the economic situation has had a dramatic impact on investment in change across respondents' organisations with 52% citing a significant impact. Only 8% of respondents indicated no impact whatsoever across their organisation. Clearly, economic conditions have significantly impacted the availability of project funding highlighting the ever increasing need for successful project delivery and benefits realisation. This suggests a need for organisations to share best practice and develop professionalism in the management of change including benefits realisation. Success is now more critical than ever with only the most robust business cases getting approval to proceed.

9. What are the strategic drivers for the projects/programmes currently underway within your organisation?

9. What are the strategic drivers for the projects / programmes currently underway within your organisation?

38%

Cost reduction

Process improvementCustomer improvement

Increased revenue

Compliance - legal or regulatoryIncreased stratigic capability

Service innovationRisk avoidanceShared services

Environmental sustainabilityOther

Outreach

88%

55%

47%

39%

36%

29%28%

27%

24%13%

2%

2%

0 20 40 60 80 100

Interestingly, 88% of respondents indicated that cost reduction is currently a strategic driver of change in their organisation. It is no surprise that process improvement is in second place at 55%, along with customer satisfaction at 47%. The responses for environmental sustainability and outreach are 13% and 2% respectively. Overall, this suggests that in the current economic climate organisations are prioritising investment in business critical projects or programmes, centred on cost reduction and efficiency.

10. How would you describe the approach to benefits realisation within your organisation?

Formal structured

Informal ad-hoc

Incidental

10. How has the current economic situation impacted your organisation’s investment in change projects/programmes?

46%

45%

9%

55% of respondents describe their organisation's approach as informal/adhoc or incidental. Conversely, 45% of respondents indicated that the approach to benefits management within their organisation is formal/structured. This reflects a developing maturity in benefits realisation across the island of Ireland, broadly in line with the results of similar surveys across the UK. It also reflects the need for greater development in the management of change to improve the effectiveness of benefits realisation.

11. Based on your experience, please rate the following 'people' factors that most positively support the realisation of benefits within your organisation.

11. Based on your experience, please rate the following 'PEOPLE' factors that most POSITIVELY support the realisation of benefits within your organisation

Executive commitment during the project/programme implementation phase

19%81%

Communication of roles and responsibilities for benefits realisation 70%

30%

Executive commitment during the post implementation phase 69%

31%

Acceptance of change within the organisation 68%

32%

Agreement on the ownership of benefits 63%

37%

The availability of specialist skills 61%39%

Business as usual ownership of benefits duringthe post implementation phase 60%

40%

The availability of internal resources 57%43%

Early engagement of business as usual representative 56%

44%

Most positive Least positive

Executive commitment during the project/programme phase is the most positive factor with 81% of respondents selecting this option. Executive commitment during the post implementation phase is clearly lower at 69%. This suggests that organisations across the island of Ireland place less emphasis on benefits after the project/programme closes.

Section 2: Your Change EnvironmentWe asked respondents about the impact of the current economic situation, strategic drivers for change, their views on the effectiveness of benefits realisation and the approach used to support change across their organisation.

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12. Based on your experience, please rate the following elements of management information that most positively supports the realisation of benefits within your organisation.

12. Based on your experience, please rate the following elements of management information that most positively supports the realisation of benefits within your organisation

Least positive Most positive

Availability of appropriate management information on benefits to

support desicion making

Keeping information on benefits up to date

Communication of the benefits to berealised to stakeholders

Alignment of financial benefits to operationalbudgeting and forcasting

Availability of a database system to maintaininformation and report on benefits

22%

30%70%

32%

68%

35%

65%

48%

52%

78%

The most positive factor is the availability of management information on benefits to support decision making at 78%. The least positive factor was the availability of a database system to maintain information and report on benefits; 48% of respondents. This suggests that the market for software applications to support benefits realisation is less mature with organisations more reliant on traditional tools such as Microsoft Excel. Unsurprisingly, the alignment of benefits to operational forecasting and budgeting is most positive in 65% of respondent’s organisations.

13. Based on your experience, please rate the following elements of methodology that most positively support the relisation of benefits within your organisation.

13. Based on your experience, please rate the following elements of methodoogy that most positively support the reaisation of benefits within your organisation

Least positive Most positive

Identifying the most appropriatemeasurable benefits

Identifying and capturing robust metrics for the identified benefits e.g. KPIs

Achieving the agreement of benefitowners on robust targets

Ensuring business as usual is able torealise the benefits

Intergration of benefits management with theapproach to project management

23%

27%73%

33%

67%

36%64%

43%

57%

77%

Our survey reveals that the identifying the most appropriate measurable benefits is the a positive factor in 77% of respondents organisations. This is no surprise with such a strong focus on cost reduction in the current economic climate. The integration of benefits management with the approach to project management was cited as the least positive factor by 43% of respondents. This suggests that there is more work needed across organisations to integrate project and programme management, change management and benefits realisation.

14. Does your organisation have a project, programme or portfolio management office (PMO) or similar function to support the overall realisation of benefits?

Yes

No

12. Does your organisation have a project, programme or portfolio management office (PMO) or similar function to support the overall realisation of benefits

60%

40%

60% of respondents do not have a PMO or similar function to support the overall realisation of benefits. This also suggests that organisations need to focus on developing organisation wide capability in benefits realisation.

15. How satisfied are you that the PMO or similar function is effective in supporting the delivery of benefits?

Very dissatisfied

Dissatisfied

Satisfied

Very satisfied

13. How satisfied are you that the PMO is effective in supporting the delivery of benefits?

55%

29%

8%7%

It is encouraging to see that the majority of respondents are satisfied with their PMO's approach to supporting the delivery of benefits (62%). Traditionally, benefits realisation has been seen as one of the less mature aspects of managing change across organisastions. Interestingly, 37% of respondents are either dissatisfied or very dissatisfied with their PMO's approach to supporting benefits realisation highlighting that there is more work to be done to increase professionalism in this important area.

8

16. Which function is responsible for providing best practice and guidance on benefits realisation within your organisation?

16. Which function is responsible for providing best practice and guidance on benefits realisation within your organisation?

38%

Finance function

Project/programme/portfoliomanagement office (PMO)Management accounting

Don’t know

OtherProject & programme management

(PPM) centre of excellencePerformance management

Training department

18%

32%

10%

12%

13%

8%

6%

1%

0% 5% 10% 15% 20% 25% 30% 35%

Recognising the survey's strong finance community representation, it is no surprise that the finance function and management accounting are collectively responsible for best practice and guidance in 45% of respondent's organisations. This highlights the strong link between change, performance management, benefits realisation and cost management, emphasising the importance of this in the current economic climate. 12% of respondents indicated that they don't know which function is responsible for providing support and guidance suggesting that some organisations need to place a stronger focus on communication around access to such information. This reinforces the ever increasing interdependency between change and finance professionals across the island of Ireland.

"Almost 70% of respondents indicated that the current approach to benefits management within their organisation provides value some of the time or never."

17. Have you considered any of the following to improve benefits realisation?

A standard set of key performance indicators(KPIs) to measure business performance

Return on investment (ROI) analysis

Net present value (NVP) analysis

Dashboard reporting on benefits

Lean six sigma

Strategic portfolio management

Software application to support management information on benefits

Benefits profiles

Benefit maps or benefit dependency networks

0% 20% 40% 60% 80% 100%

63%

44% 19% 29% 29%

43% 17% 31% 8%

32% 24% 40% 29%

27% 16% 48% 9%

25% 23% 46% 6%

22% 30% 41% 7%

14% 24% 57% 7%

13% 14% 69% 4%

24% 11% 2%

Currently Use Under consideration

Have not considered Decided not to use

Our survey suggests that there is still divergence in approaches to benefits realisation between project, programme, change professionals and finance professionals. Recognising strong finance representation, it is no surprise that a standard set of KPIs, ROI analysis and NPV are the three most commonly used approaches. A significant number of respondents have not considered using benefit maps (69%) or benefit profiling (57%), suggesting that there is much to learn from cross sharing of knowledge between project and programme professionals and finance professionals. It is worth noting that merely 22% currently use a software application to support management information on benefits suggesting a need for more automated use of information.

18. In your view, does the current approach to benefits management within your organisation provide value?

All of the time

Most of the time

Some of the time

Never

18. In your view, does the current approach to benefits management within your organisation provide value?

60%

28%

3%

9%

Almost 70% of respondents indicated that the current approach to benefits management within their organisation provides value some of the time or never. This suggests a lower level of maturity and a clear need to develop professionalism to improve confidence in the approach. 3%t of respondents indicated that the current approach provides value all of the time. This reflects similar results from an APM UK survey in 2009.

9

19. How does your organisation manage risk relating to the realisation of benefits?

Within the relevant project/programmerisk register

Within the corporate/operational riskregister

Not sure/don’t know

19. How does your organisation manage risk relating to the realisation of benefits?

24%

40%36%

40% of respondents manage risks within the project/programme risk register. Surprisingly, 36% of respondents are not sure or don't know, indicating a need for greater communication across the organisation on risks relating to benefits. 24% of respondents' organisations manage risk relating to benefits within their corporate/operational risk register. This suggests a growing trend to managing risk as part of the corporate risk management approach. This is particularly important where the corporate risk register is an integral part of the organisation's governance model.

20. Does your organisation undertake a post implementation or similar review for projects/ programmes which includes an assessment of the benefits that have been realised?

Yes

No

20. Does your organisation undertake a post implementation or similar review for projects/ programmes which includes an assess-ment of the benefits that have been realised?

69%

31%

The majority of respondents' organisations, 69%, undertake a post implementation review of projects and programmes including an assessment of the benefits being realised. This reflects best practice guidance and needs to be considered in the context of the response to question 21.

21. In your opinion, does the formal review contribute to ensuring that the intended benefits have been realised?

All of the time

Most of the time

Some of the time

Never

21. In your opinion, does the formal review above contribute to en-suring that the intended benefits have been realised?

44%

38%

4%

14%

58% of respondents indicated that the post implementation review only provides value some of the time or never in relation to benefits. Merely 4% of respondents claimed that it provided value all of the time. This suggests the need for a fundamental re-evaluation of how organisations approach post implementation reviews with the focus on a more effective form of assurance for post-implementation benefits realisation.

"This suggests the need for a fundamental re-evaluation of how organisations approach post implementation reviews with the focus on a more effective form of assurance for post-implementation benefits realisation."

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BenefitThe positive and measurable impact of change on the performance of the organisation, contributing to one or more strategic objectives

Benefits ManagementThe approach, process or method used to ensure that benefits are realised from the delivery of change

Benefit Map or Dependency NetworkA graphical model illustrating the benefits of a project/programme/portfolio on a single page.

Benefit ProfileA document or dashboard summarising the detail behind each individual benefit. Typically contains information such as ownership, prioritisation, KPIs to be used, baseline, target and actual metrics.

Benefits RealisationThe action or the ‘doing’ to ensure that benefits are fully realised from the delivery of change

Business As UsualStandard day to day activities across an organisation that are non-project or change related.

KPI: Key Performance IndicatorA quantifiable measure used by organisations to gauge or compare performance to meet operational or strategic goals.

Lean Six SigmaBusiness improvement framework which combines tools from lean manufacturing and six sigma. Typically used in manufacturing or business process improvement. Lean focuses on speed and six sigma focuses on quality. The two combined provide better quality faster.

Glossary of Terms

NPV: Net Present ValueFinancial indicator used to show the difference between the value of cash inflows and the value of cash outflows. A positive NPV indicates that a specific initiative or project is worthy for consideration.

SIG : Specific Interest GroupA peer level network, typically within a professional body to develop knowledge leadership and share best practice.

SponsorThe senior individual ultimately accountable for delivery of the project or programme, ensuring that it meets its objectives. They also provide senior level leadership to the project/programme team.

SRO: Senior Responsible OwnerThe senior individual ultimately accountable for delivery of the project or programme, ensuring that it meets its objectives. They also provide senior level leadership to the project/programme team.

Strategic Portfolio ManagementThe selection and management of all of an organisation’s projects, programmes and related business-as-usual activities taking into account resource constraint.

Return on investmentFinancial indicator used to compare the amount of savings derived from a project with its cost. It is typically expressed as a percentage of the cost of the project.

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The contents of this report do not necessarily represent the views of CIMA, APM or Deloitte; either collectively or as individual organisations

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