Business Change Portfolio Management

Business Change Portfolio Management Ensuring that business change delivers business value

Invest wisely to extract maximum value from business change. As the business climate improves, can your business rise again to the challenge 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 the competitive 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?

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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.

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, it’s 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: Business Change Portfolio Management is that mechanism.

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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

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Significantly less disruption to business operations, with faster, simpler adoption of new processes and improved teamwork and staff morale

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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.

Margaret Hassall, Practice Head, Finance and Media sector, Charteris plc Page 2

Copyright © 2004 Charteris plc. All rights reserved.

Business Change Portfolio Management

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 the centre of its operations and strategy.

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 on the 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.

At Charteris we have the expertise and the practical experience to meet the challenge of change. As you’ll 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.

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.

Copyright © 2004 Charteris plc. All rights reserved.

Business Change Portfolio Management

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How Charteris meets the challenge of change. Collect facts and gain understanding

Over the next few pages we outline key elements of the Charteris approach to Business Change Portfolio Management.

♦ Identify and understand all constraints

1. Establishing supply capability

♦ Know the true capability of resources – internal and external ♦ Spot the skills shortages ♦ Plan around bottlenecks.

What’s available? Budget

Insight and understanding How many? ♦ Now

Resources

♦ Planned

These might be limited by:

♦ Management capacity

♦ Expertise

♦ Constraints

♦ ♦ ♦ ♦ ♦

Profile

Ability to manage and support Take on rates Systems availability Space Rules and regulations

♦ Skills ♦ Knowledge ♦ Availability

Time ♦ What’s the deadline and is the time remaining sufficient to deploy the change? ♦ Is the timing determined by internal or external factors? Culture and capacity for change Is the organisation constrained in any way in its ability to take on change?

♦ Location ♦ Internal/external/outsourced

Who does what? Where are the bottlenecks? Can we avoid them or plan around them?

Understanding supply and constraints In 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 not be resolved without months or years of development and training.

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Copyright © 2004 Charteris plc. All rights reserved.

Business Change Portfolio Management

2. Mapping change demand

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.

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 ‘ringfenced’ team?

Copyright © 2004 Charteris plc. All rights reserved.

Business Change Portfolio Management

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3. Setting the baseline portfolio

Cut off! Projects below the baseline are only started if more capacity is made available.

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

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

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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.

♦ 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 costs and benefits.

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Copyright © 2004 Charteris plc. All rights reserved.

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 relationship management ♦ Rigorous change management approach.

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.

Copyright © 2004 Charteris plc. All rights reserved.

Business Change Portfolio Management

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5. Managing the entire process

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 activities would cover: ♦

Identification of a senior-level sponsor

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

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Gaining buy in from the cross-business forum.

Establish an accurate definition of the organisation’s ability to supply change. This will cover: ♦

Governance

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Programme structure

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

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Programme and project management processes

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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 then maintain it

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

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Push back on the assessment until there is confidence in the robustness, e.g. is it really a legal requirement?

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

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♦

Using the agreed criteria, put the projects in order of priority allowing a line to be drawn once capacity has been reached

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

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

Copyright © 2004 Charteris plc. All rights reserved.

Business Change Portfolio Management

6. Linking the business for maximum strategic value

Bringing your business together to achieve sustainable change and maximum 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 costeffective 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.

Copyright © 2004 Charteris plc. All rights reserved.

Business Change Portfolio Management

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Why Charteris? Experience – the difference 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. Business

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.

Projects

Our strengths

Technology

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.

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Proven in-depth portfolio management expertise

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Highly experienced practitioners

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Bridging between business and technology

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

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Independent, practical, results-driven approach

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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

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Review of existing processes and mechanisms

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Definition of demand portfolio – including categorisation

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Definition of supply capability

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Programme and project mobilisation

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Programme and project management

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Coaching and mentoring

Copyright © 2004 Charteris plc. All rights reserved.

Business Change Portfolio Management

From our own portfolio

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 100 countries. 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 customer’s IT development unit was focused almost entirely on merging 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 customer’s 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.

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Charteris told me that change 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 didn’t fall into traps, to keep us honest to our cause and to keep up the momentum. Charteris fulfilled just that role.

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David Grigson, Finance Director, Reuters plc.

Charteris’ role: Charteris was commissioned to undertake a comprehensive and wideranging 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 and identified new procurement methods which would allow key activities to be completed without the IT group acting as a bottleneck. Copyright © 2004 Charteris plc. All rights reserved.

Business Change Portfolio Management

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The essential bridge between business and technology

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

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Government, Legal, Utilities & Energy

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Retail, Manufacturing, Distribution & Technology

Charteris services are organised into three disciplines — Business, Projects and Technology — to provide clients with the essential bridge between business and 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.

Charteris plc Head office: Charteris House, 39/40 Bartholomew Close, London EC1A 7JN Tel: +44 (0)20 7600 9199 Fax: +44 (0)20 7600 9212 email: [email protected] www.charteris.com Page 12

Copyright © 2004 Charteris plc. All rights reserved.

Business Change Portfolio Management