Last week I attended the Programme and Change Management (Benefits Realisation) event in Glasgow, organized by the Improvement Service. The day was attended by reps from all 32 Scottish LA’s. I was one of the very few IT bods in attendance, mostly it was change managers and corporate business folk. They looked at how to change council’s business practices in order to realize benefits and although in a sense the boat has sailed on this and real cuts are coming, a couple of the speakers were good enough to inspire debate.
Because it was relatively interesting (for this type of thing), I thought I’d share some notes with you (attached).
More information incl Peterborough Business Cases available at their Infobank website.
Programme and Change Management Event – Notes on two interesting speakers
- Presentation by Paul Tonks, Director of Transformation, Peterborough Council
Peterborough similar to medium sized Scottish LA: £230m budget and 6,500 staff.
Introduced Programme Management Office (PMO) and Transformation programme in 2006; on instigation of depute leader, with target of £24m savings over 3 years. Target achieved.
Seconded key staff to central PMO. Consultants / partners appointed: AMTEC and V4 Services via OGC catalyst framework.
6 staff in PMO + 6 consultants / partners / associates on a project by project basis. Plus 3 non-transformational people. 76 projects.
PT worked for V4 and was eventually seconded to work for Peterborough. Now he is Director of Transformation.
Established an Invest to Save fund of £1m. “Dragons Den” model for bids, with ROI < 3 years. To get a slice of the initial investment, the bidding SRO must immediately surrender the projected savings from their budget (this encourages success!). In reality it can take up to a year for this budget reduction to kick in. Only repeatable savings allowed. Staff engagement via this competition for ideas.
Growth and Infrastructure
Sneakily, they worked on the first project – “Manor Drive plc”- for 3 months behind the scenes – it’s success built trust that the model of providing savings would work. Also, they simply ignored all HR standards and internal policies to establish their Manor Park project. They found HR to be a barrier to progress, coming up with reasons not to proceed and ingrained attitudes were to work against rather than with the unions. Contracts were renegotiated without HR involvement and head of HR left the council. Unions were consulted and welcomed the changes.
Transformation is the integral tool for delivering Medium Term Financial Strategy (MTFS). Business transformation programme means that savings are centrally apparent, no silos, and the investment-led approach means that there is no across-the-board slicing of budgets with a broad brush.
Manor Drive project brought together corporate back office services “into a single coherent structure”. Called it “delayering” the BO. Now extending across all services. Childrens Services has expressed interest and will be next for rollout. Changed BO into a business!
- Directors Group – overseers – chair: Director of Transformation (PT)
- Governance Board – manages all council projects > £50k (cap or rev). chair: head of Finance
- Savings Board – manages delivery of transformation projects, interventions etc. chair: Head of Customer Services
- Programme Team – chair : senior programme manager
Every project >£50k capital or revenue goes through the Project Gateway process.
All projects tracked in Verto system developed by Peterborough CC and TMI systems – it’s a big spreadsheet on the web, hosted and supported with structure and reporting. Seems simple and powerful. £3k pa for 20 seats, or £25k site-licence and £5k pa.
Also have a Performance Management system ,and although they use it for PI’s etc, this is not connected with the Transformation programme and PT was derogatory.
Speaking to PT, he revealed that to stuff all the people into Manor Drive, they used a monitoring tool from BT which monitored how long and when people were actually at their desks. They could use these figures to show that they could reduce the office space significantly and make savings. Also introduced agile and home working (renegotiated contracts ignoring HR).
Questions / answers session
PT said right from the start they stated that they would be making people redundant and redeploying people. The unions had been frustrated at the previous barriers to change and came on board. Where they previously saw services being outsourced for the wrong reasons (outsourcing risk / culpability rather than service improvement).
Peterborough have an ALMO (Arms Length Management Organisation) called City Services. There were interfaces with this, but it was outside the scope of the Manor Park project.
Management team have their performance monitored by signing a new contract so SROs must deliver. Because they have had their budget removed, they must make the saving. There is a some slack from the transformation budget where necessary. 70% of projects achieve savings.
You have a year until you close accounts so redundancies not straightaway . Calculate benefits as Net position, not Gross position (I don’t understand this).
Centralising benefits and taking budget avoids double-counting of benefits.
Investment led approach allows pump-priming, paying upfront for business cases to be produced.
Cost avoidance and notional savings not counted.
As a result of Manor Drive, the council’s company has won 2 tenders to provide local BO services in Peterborough.
We can ask for a demo login for Verto system
Paul Tonks, Head of Business Transformation
Telephone: 01733 452471
Sally Howe, V4 Services Limited
Telephone: 07912 517093
Chris Wright, TMI Systems Limited
Telephone: 07799 656101
- Stephen Jenner, director Criminal Justice IT portfolio unit
(profile: http://www.stage-gate.com/SG_Summit/SGLS_Faculty.php )
The final speaker was Stephen Jenner who presented on the topic “Benefits Realisation….a fool’s errand?”
Steve’s presentation was interesting and wry, underlining the point that it is only possible to realize benefits when you have defined, clearly and honestly, what those benefits will be.
He called upon various expert papers by government officials and academics who decry the lamentable businesss practices we all fall subject to. For example, all business cases tell lies: “the planned, systematic, deliberate misstatement of costs and benefits to get projects approved….that is lying”.
There is a demonstrated, systemic tendency for project appraisers to be overly optimistic. This is a worldwide phenomenon that affects both the private and public sectors…appraisers tend to overstate benefits, and underestimate timings and costs.” HM Treasury
Forecasts are “highly, systematically and significantly misleading (inflated). The result is large benefit shortfalls”.
“Delusional optimism: we overemphasise projects’ potential benefits and underestimate likely costs, spinning success scenarios while ignoring the possibility of mistakes.” Lovallo and Kahneman
He pointed out some ways to cut through the potential problems:
- “Strategic alignment” is no justification for investment. Will any business case not align with strategy?!
- Be clear about the benefits from the start and what kind of benefits they are.
- Saving employee time is not a benefit – they are only “vouchers”. It is what we do with that time that determines the resulting benefit.
- Use rigorous stage Gates during projects
- Use the business case as a measure at each stage / phase to ensure clear line of sight
- Use summary documentation – size is the enemy to understanding – the bigger a business case, the less useful it is! One page business cases?!
- Post-implementation reviews provide an organisation with learning from past mistakes that would otherwise be lost. I;m not sure how this would be best communicated.
- Independent reviews:
- Ayers suggests an, “‘Advocatus Diaboli’… whose job it is to poke holes in pet projects. These professional “No” men could be an antidote to overconfidence bias.”
- Davidson Frame proposes the use of “murder boards” to pull a proposal apart to, “make sure that arguments in support of project ideas do not have built into them the seeds of their own destruction.”
- Steve Jenner – I suggest a ‘fool’ to ask the questions others don’t dare to ask and identify those, ‘assumptions that masquerade as facts’. “Be wise enough to play the fool”.
While you could argue that Steve is dressing up some common-sense principles in order to make a living as a public speaker, nevertheless he convincingly makes points that lend a note of valuable caution to the justifications and programme management of every organization.