Ranking Portfolio Initiatives

1. Ranking Portfolio Initiatives The challenge of defining workable prioritisation criteria APM PfM SIG 14/06/12 Bernard Marshall

2. Building a change portfolio • Defining prioritisation criteria • Distilling criteria from strategic documentation • Challenges and practicalities • Building the rankings list • Building a coherent portfolio

3. Preparing for the future Improving the Business Defining new strategy Running the Business Building infra-structure

4. Initiative Process and Pipeline

5. Organizational Design Infrastructure Development Employee Self-Services NewCo@NewCo Customer-Relationship Management System Virtual Supply-Chain New channels to market Web-enabled Information Warehouse NewCo Initiatives (sample) January, 2013 February March April May June July August Vision/Strategy/Planning New Brand Identity New Business Unit Product Development Process NewCo Environment Definition (“Culture” and Employee Assimilation New International Office Locations and Moves NewCo.com Reorganization Pack-Out and Distribution Transition ACQUISITION(S)

6. Criteria – Strategic and Business Rationale You should ask these questions about each initiative / programme / project. • Why do we have to deliver this initiative and why now? • How does it fit with other initiatives already planned or underway? • Who are the main stakeholders and partner organisations? • Do we understand the scope, what success will look like, and is it supported explicitly by both users and stakeholders? • What is the critical path and how will we know we are on track? • What is our track record for managing similar initiatives? • Have we identified the main risks and do we have explicit plans to manage them? • Are we confident about our leadership, skills and capabilities to achieve success? • Is the budget affordable for the overall initiative and the work to be done through to the next stage? • What are the plans for evaluating the outcome of the initiative / programme / project? • How does this initiative contribute to your authority’s business strategy? • Is the high level business case complete – that is, is it affordable, achievable, with a wide enough range of options explored and likely to achieve value for money? • Have we taken account of the wider policy context, including other critical policy initiatives such as FoI, the Efficiency Agenda, etc., where relevant? • Have the critical success factors and benefits been agreed with key stakeholders? • Has a feasibility study been completed satisfactorily, with a preferred way forward? • Do we have internal / external authority and stakeholder support for the initiative? • Have we identified the major risks and do we have outline risk management plans? • Are the scope, scale and requirements realistic, clear and unambiguous? • Can we confirm our planning assumptions, including timescales and the impact of any other enabling or interfacing initiatives? and • Is there a clearly defined and agreed governance structure with nominated key roles and responsibilities?

7. Sample Ranking Criteria • Regulatory Compliance • Policy Imperatives • Risk mitigation or avoidance • Return on investment • Cost avoidance • Competitive differentiation • Market share • Revenue • Innovation • Flexibility/agility • Nearness to delivery

8. Simple Categories • Compliance projects • Strategic Projects • Operational projects

9. Weighted Indexing • Establish the relative value of the investment • Compare across multiple unrelated criteria • Provide Aunt Sally but ensure that leadership gets to define the final criteria and weightings

10. One of the many matrices to help illustrate your work Feasibility Credibility Fit Readiness to deliver Relative costs Quality of Approach Value Strategic relevance Financial reward Speed to market Synergies and complementarity

11. The Challenges • Need for neutrality – process needs to be seem as extremely impartial • Define the criteria as part of the strategy work – not the planning work • Only a model to help simplify • Start with an naïve objective caricature and then let the key decision makers justify why they are moving away from the model • Look out for inflation • Quality of the information available

12. From entry criteria to planning criteria • Multiple assessment criteria, quantitative and qualitative data and tools to collect it • Not just a linear process – portfolio needs to be reviewed for balance and >Σparts • Sequencing • How and when to run the project in the context of the wider portfolio

13. Thank you for your attention!

14. Initiative Portfolios Integrating initiatives into logical portfolios delivers benefits of: • Speed • Integration • identifies dependencies and manage sequencing • minimizes competing priorities • maintains focus • Knowledge Management • creates internal competency for managing change • lessons learned collected in central repository • Reduced Cost and Confusion • prioritizes and allocates resources appropriately • reduces rework and redundancies • enables employee understanding and acceptance

15. Balancing the Portfolio – cost/benefit Benefits Costs Money Resources Risk Attention Commitment • Regulatory • Commercial • Financial • Operational • People

16. Alignment to Organisation Strategy PROGRAMMES Strategic Imperatives Policy Influence – Strategic Imperative Customer Relationships – Strategic Imperative 1. Customer Service Excellence 2. Data Provision and Information Support Knowledge Management – Strategic Imperative 3. Business Excellence Delivery Enabling Culture – Strategic Imperative 4. Electronic Vehicle Licensing 5. Vehicle Registration Modernisation Products & Services Innovation – Strategic Imperative 6. Driver Licensing Modernisation 7. Operational Excellence Delivery Operational Excellence – Strategic Imperative 8. Vehicle Taxation and Enforcement / Compliance

17. Mapping Initiatives to Priorities Once Step 1 has been completed and all of the council’s key objectives have been agreed and all relevant projects and initiatives selected, they can all be plotted onto a plan as outlined in this example.

18. Collecting ProjectDate(illustration) Project code, Name of project, Short description, Project manager, Contact details, Sponsor, Directorate, Project Type (MSP), Start date, Finish date, Duration (months), Not started, Complete, % complete (time), 1st Priority Theme, 2nd Priority Theme, 3rd Priority Theme Statutory, Political, Strategy, Improvement, Maintenance - "Cat Index" (weighting), No of Objectives contributed to Dependencies , Links to other projects, File name Total budget: approved – real, Budget for analysis, Spend to date: approved – real, Committed spend: approved – real, Spend to complete: approved – real, Approver, Approved, Approval level, Budget owner/Service Mgr, Key stakeholders, Customer Number of staff involved - Direct >75%, >25%, >5%, Total direct, Number of staff involved - Indirect >75%, >25%, >5%, Total indirect,Estimated FTE months – Direct, Indirect, FTE sum Is customer satisfaction being measured as part of the project? No Comments Is the project part of a programme? No Comments Which one? Has Managing Successful Projects methodology been applied? No Comments Is there a documented Project Initiation Document? No Comments Deliverables, Next key milestone, Expected Benefits Date Does the project enable continuous improvement? No, Comments Will the project contribute to evidence based decision making? No, Comments Will the project contribute to how performance is measured? No, Comments Will the project positively impact BVPIs? No, Comments, Which ones? Will the project increase staff skills? No, CommentsHow quickly will this impact occur (months)? How much will the project save (£)? FTEs, Time, Process Efficiency project, Estimated saving, % of cost, Effectiveness project, N/A, NotesDirect, Enabler, Approved, Real Is the saving a one off or on-going saving? How long (years)? Statutory requirement: Is your project necessitated by law/regulation? Direct- Indirect, Which one? Notes Political commitment: Is your project required to deliver on a political commitment? Direct - Indirect Which one? Notes Strategic priorities: Is your project delivering on a strategic commitment form the corporate plan? Direct – Indirect Which one? Notes Performance: Is your project in response to an external performance improvement target? Direct Is your project in response to an external performance improvement target? Direct, Which one? Notes Maintenance - Is the project in response to a maintenance need? Direct – Indirect, Which one? Notes Is your project in response to some other imperative? Direct - Indirect Which one? Notes Link to Key Council Partner? Links to other projects, Number of customers impacted (#)? Communities, Adults, Children, Business, Ease of redeployment, Can be wound down quickly? Priority index, Portfolio home, Projects for review

19. Analysis Tools Portfolio Rationalisation

20. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Portfolio Matrix Identifier This tool helps a manager be clearer about the reason for each project and the business goals being served. It is easier to harness the different contributions required to reach goals, to integrate contributions, and to prioritize projects. Purpose: Identify the full range of projects that to develop the strategic capabilities necessary to deliver strategic change How to Create: • Generate projects from the capabilities • Prioritize, sequence and plan the transformation • Identify the key methods and techniques required for each project. • Identify key dependencies • Confirm what to STOP doing _ _

21. ? ? Using the scorecard to drive the organisation’s change programme Corporate Scorecard measures Project 1 Project 2 Project 3 Project 4 Project 5 Project 6 Results Measure 1     Measure 2  Measure 3    Measure 4 Customer Measure 1      Measure 2 Measure 3     Measure 4 Processes Measure 1     Measure 2 Measure 3      Measure 4 People Measure 1 Measure 2 Measure 3 Measure 4

22. This tool helps in prioritizing projects. Project Prioritization Matrix Purpose: Out of the full range of potential projects, agree which projects to prioritize How to Create: • Map the potential projects along the three dimensions: • time to respond • ease of implementation • impact on business • Use color coding to identify which projects to stop (red), park (yellow) and prioritize (green) • What else can drive priorities? • externally imposed deadlines • the client's preferences • internal politics • critical paths • resource burdens • project staff • balancing with day to day business • assimilation capacity • benefit delivery profiles • greatest impact • continuous flow of benefits • risk management strategies

23. PRODUCT PORTFOLIO ANALYSIS This analysis illustrates product performance and suggests product strategies; for example: high competitive position coupled with high market attractiveness suggests investing to grow at the maximum digestible rate. Purpose: Analyze the relative strengths of a company's array of products and determine appropriate strategies for each How to Create: • Use available internal and external sources to collect data on indicators of market attractiveness and competitive position such as market share, % revenue growth, and revenue in absolute dollars for each of the company's product lines. • For each product, graph growth rate vs. relative market share; scale the data points to reflect product revenue in absolute dollars. • Divide each axis into three sections – low, medium, and high – to form nine subdivisions on the graph.

24. CATEGORY EVALUATION - SPECIALTY/SPIN-OFF • Baked Goods • Bulbs • Cheese • Fruit • Kitchenware • Meat/Seafood • Stationery • Decorative Accessories • Indoor Plants EXAMPLE High • Nuts • Seeds • Trees/Shrubs • Gourmet Food • Bed/Bath • Pool/Patio/Gardening Category Fit With Company Medium • Crafts • Personal Care/Grooming • Specialty Apparel • Camping Equipment • Children’s Apparel • Drug/Vitamins/Health Food • Hardware/Tools • Athletic Equipment • Fishing Equipment • Hunting Equipment • Sporting Good Apparel Low Low Medium High Categories included in existing or planned specialty books Category Attractiveness Recommended additional specialty book venture FIT VS. ATTRACTIVENESS MODEL May oversimplify market situation. Requires judgments which are subjective in nature Purpose: To optimize strategy by developing a sense of the realistic state of the market and company affairs How to Create: • Identify product, category or market overall attractiveness as being low, medium, or high. Plot along x-axis • Identify product, category, or market fit with company objectives as being low, medium, or high. Plot along y-axis • Evaluate newly created matrix; aim to reveal products, categories, or markets that fall under high overall attractiveness and high fit with company objectives

25. Project Responsibility Assignments Project Sequencer provides a basis upon which to discuss sequencing and priority of activities (projects and programs). Purpose: Identify the right sequence of projects and programs for the business How to Create: • We have identified a "default change sequence" from our own extensive experience and academic research into further case studies • This provides a starting set of assumptions for the best sequence for major change programs • These must then be matched and tailored to the specific needs of each organisation.

26. Convergence Gap Analysis challenges and opportunities of potential projects. Purpose: Understand potential opportunities and constraints facing the client in taking advantage of business opportunities How to Create: • The Burke-Litwin questionnaire should be applied.