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Benefits and better business cases_Alan Brown and Stefan Sanchez

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A presentation at the APM Benefits Summit on 25th June 2015.

Publicado en: Empresariales
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Benefits and better business cases_Alan Brown and Stefan Sanchez

  1. 1. Benefits and Better Business Cases Alan Brown Stefan Sanchez
  2. 2. Presentation: •The business case and benefits in practice •Are we being too scientific about benefits management? •What is the relationship between the business case process and programme/project management?
  3. 3. What is a Better Business Case? • A flexible, pragmatic and common sense approach for supporting business decisions in a wide range of contexts • The Better Business ‘Five Case Model’ jointly developed by HM Treasury and Welsh Government • Investments £5m+ a Three stage process • Strategic outline case (SOC) • Outline Business Case (OBC) • Full Business Case (FBC) • Provides decision makers with confidence and assurance that they are making the right decisions (business assurance) and in the correct way (programme and project assurance)
  4. 4. Better Business Cases ask 5 Key Questions
  5. 5. Better Business Cases ask 5 Key Questions High level benefits identified Detailed quantification of benefits Refinement of benefits through market testing Balance sheet impact and timing of cash releasing benefits Management of benefits delivery
  6. 6. Practical Application About the Programme • £1.4 billion investment programme 2014-2019 • Funding split 50% WG / 50% LA’s • All 22 Welsh LA’s participating • Reduce Surplus Capacity • Improve Educational Outcomes • Reduce overall running and lifetime costs 150+ New / improved Schools
  7. 7. The business case and benefits in practice
  8. 8. Programme Business Case (PBC) Outline Business Cases (OBC) and Full Business Cases (FBC) Programme delivery Identify Refine & prioritise Quantify and profile Deliver and manage
  9. 9. Programme Business Case (PBC) Outline Business Cases (OBC) and Full Business Cases (FBC) Programme delivery Identify Refine & prioritise Quantify and profile Deliver and manage Clear identification of high level direct and indirect benefits Priority benefits identified (20% that represent 80% of value) Approach to quantification Benefits strategy content Strategy reviewed and updated as appropriate Strategy reviewed and updated as appropriate
  10. 10. Programme Business Case (PBC) Outline Business Cases (OBC) and Full Business Cases (FBC) Programme delivery Identify Refine & prioritise Quantify and profile Deliver and manage Clear identification of high level direct and indirect benefits Priority benefits identified (20% that represent 80% of value) Approach to quantification Benefits strategy content Benefits action plan content Stakeholder engagement plan to commence ‘benefits discussion’ Apply metrics to direct and indirect benefits Approach to direct and indirect benefits (% claim) Continued stakeholder liaison and build compelling narrative Profile priority benefits Record benefits profiles in economic analysis (and financial analysis where appropriate) Clear delivery plans set up with SMART actions and clear ownership/responsibility for benefits realisation Articulation of benefits review cycle and likely changes to action plan over time Strategy reviewed and updated as appropriate Strategy reviewed and updated as appropriate
  11. 11. Programme Business Case (PBC) Outline Business Cases (OBC) and Full Business Cases (FBC) Programme delivery Identify Refine & prioritise Quantify and profile Deliver and manage Clear identification of high level direct and indirect benefits Priority benefits identified (20% that represent 80% of value) Approach to quantification Benefits strategy content Benefits action plan content Stakeholder engagement plan to commence ‘benefits discussion’ Apply metrics to direct and indirect benefits Approach to direct and indirect benefits (% claim) Continued stakeholder liaison and build compelling narrative Profile priority benefits Record benefits profiles in economic analysis (and financial analysis where appropriate) Clear delivery plans set up with SMART actions and clear ownership/responsibility for benefits realisation Articulation of benefits review cycle and likely changes to action plan over time Strategy reviewed and updated as appropriate Strategy reviewed and updated as appropriate
  12. 12. CRB cash releasing benefits nCRB Financial non- cash releasing benefits QB Quantifiable benefits nQB Non- quantifiable benefits Cannot be counted or valued (£) Valued (£) but not ‘hard cash’ Can be counted but not valued (£) ‘Hard cash’ (£) Reflected in: bottom line/balance sheet (financial case) Economic analysis (economic case Reflected in: NPC/V Economic analysis (economic case) Reflected in: Economic analysis (economic case)
  13. 13. Main Stakeholder beneficiaries Benefit no. Main Benefit Criteria Benefit category Learners B1 Improved learning outcomes QB B2 Appropriate pupil-teacher ratio and reduced age ranges within individual classes QB B3 Improved social and sporting opportunities Qual B4 Improved appropriate and flexible learning environment QB Community B5 Increased community engagement Qual B6 Opportunity to raise awareness of the Welsh language and Welsh-medium provision in the locality Qual B7 Sustainable primary education in the area Qual Staff B8 increased staff morale and wellbeing Qual B9 Improved professional development opportunities and job security for teachers Qual B10 Reduced age range of learners and reduction in current range of abilities QB B11 Improved leadership and governance Qual Local Authority B12 Reduction in backlog maintenance Non-CRB B13 Reduction in staffing costs CRB B14 Reduction in premises running costs CRB B15 Less administrative burden, servicing reduced governance Non-CRB B16 Reduction (and/or mitigation) of pupil transportation costs CRB B17 Meeting best practice and regulatory standards for learning environments Qual
  14. 14. No. Benefit criteria weight Option 1 Option 2 Option 3 Option 4 Option 5 score W x S score W x S score W x S score W x S score W x S B1 Improved learning outcomes 19 0 0 8 152 9 171 9 171 9 171 B2 Appropriate pupil – teacher ratio and reduced age ranges within individual classes 12 0 0 7 84 7 84 7 84 7 84 B3 Improved social and sporting opportunities 8 0 0 4 32 5 40 5 40 5 40 B4 Improved appropriate and flexible learning environment 9 0 0 7 63 9 81 9 81 9 81 B5 Increased community engagement 6 0 0 3 18 6 36 6 36 6 36 B6 Opportunity to raise awareness of the Welsh language and Welsh-medium provision in the locality 6 0 0 5 30 5 30 5 30 5 30 B7 Sustainable primary education in the area 12 0 0 7.5 90 8.5 102 9 108 9 108 B8 increased staff morale and wellbeing 9 0 0 8.5 76.5 9 81 9 81 9 81 B9 Improved professional development opportunities and job security for teachers 7 0 0 6 42 7 49 7 49 7 49 B10 Reduced age range of learners and reduction in current range of abilities - - - - - - - - - - - B11 Improved leadership and governance 12 0 0 5 60 6.5 78 6.5 78 6.5 78 TOTAL 100 0 647.5 752 758 758
  15. 15. BENEFITS Direct Indirect
  16. 16. Are we being too scientific about benefits management? • Quantify and claim the 20% of benefits that represent 80% of the value • Is this the right approach?
  17. 17. Can we legitimately claim the indirect benefits with the highest values?
  18. 18. Invest in Public Health smoking cessation campaign Reduced number of smokers Leads to Leads to Improved health of x people Leads to Less GP visits (£) Less treatment of smoking related diseases (££) Improved public knowledge of the dangers of smoking Leads to Reduction in work lost time (££££) Can we claim these benefits? Measure public knowledge before and after – reasonable to assume majority of increase due to the campaign Assumes increased knowledge translates into changed behaviour – tenuous to assume this is due to the campaign Assumes health improvement due to smoking cessation but could be due to: • The campaign • Reduction in disposable income • Tax increase on cigarettes • Increased physical activity Assumes £ benefits due to improved health but could be due to: • Busier at work • More effective treatments • Improved economy and work availability
  19. 19. Solution? • Focus on paying for the scheme with direct benefits (anything over and above this is a bonus) • Work with stakeholders to develop a convincing narrative for the large indirect benefits • Encourage investment decisions to be taken with the full understanding that indirect benefits cannot be controlled • Measure programme/project success on delivery of clearly articulated outcomes (spending objectives)
  20. 20. Thank you Questions?

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