benefits tracking process
TRANSCRIPT
Business Process Knowledge DocumentBusiness Process Knowledge Document
Benefits Tracking ProcessBenefits Tracking Process
Benefits Tracking Process (Business Process)
BENEFITS TRACKING PROCESS
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Objectives of this knowledge granule are. . .Objectives of this knowledge granule are. . .
• To understand the principles of
the Benefits Tracking (BT)
process
• How BT can be used as a change
management and
communication tool
• How savings delivery is tracked
Benefits Tracking Process (Business Process)
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(2) System
IT Tool
(Access database)
(2) System
IT Tool
(Access database)
(1) Process
Drivers
Charter
Team
Process Steps
Deliverables
(1) Process
Drivers
Charter
Team
Process Steps
Deliverables
There are two distinct aspects to Benefits TrackingThere are two distinct aspects to Benefits Tracking
This is covered in detail in the
BT System Business Process
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Benefits Tracking has some specific aimsBenefits Tracking has some specific aims
• To FORMALISE a process which will allow all the ideas/opportunities which DO exist to be assessed and progressed
• To provide CREDIBILITY to the numbers (the more we understand, the fewer conflicting messages we are likely to send)
• To REPORT BACK on our SUCCESSES!
Benefits Tracking drives the financial component of a projects Balanced Scorecard.Benefits Tracking drives the financial component of a projects Balanced Scorecard.
Benefits Tracking Process (Business Process)
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BT is not only used to help manage change, it’s also a BT is not only used to help manage change, it’s also a great communication and mobilisation tool!great communication and mobilisation tool!
A way ofpreventing theduplication of
effort
Communicatessuccess throughthe Supply Chain
A process forjudging how weare progressing
A process for Plan/Do/Review
Prompts team/projectreviews
A tool for allocating resources
What BENEFITS
TRACKING is about. . .
Benefits Tracking Process (Business Process)
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DeliverablesDeliverablesDeliverablesDeliverables
• A simple, user friendly database that can be used globally
• A system owner for 2000• A training and roll out plan• A set of clear baselines for monitoring savings
in 2000• Reporting functionality which meets the
requirements of functional managers and the supply chain teams
• RACI chart
• A simple, user friendly database that can be used globally
• A system owner for 2000• A training and roll out plan• A set of clear baselines for monitoring savings
in 2000• Reporting functionality which meets the
requirements of functional managers and the supply chain teams
• RACI chart
ObjectivesObjectivesObjectivesObjectives• To deliver a global benefits tracking system
which allows us to monitor identified, scoreboarded and delivered savings, both functionally and by supply chain
• To operate an effective benefits tracking process
• To assist in resource reallocation based on project progress
• To deliver a global benefits tracking system which allows us to monitor identified, scoreboarded and delivered savings, both functionally and by supply chain
• To operate an effective benefits tracking process
• To assist in resource reallocation based on project progress
ScopeScopeScopeScope• All opportunities where savings need to be
made to both achieve and exceed the M&S 2000 budget, specifically SNO implementation, purchasing, Supply Chain mgmt, manufacturing efficiency and packaging
• All opportunities where savings need to be made to both achieve and exceed the M&S 2000 budget, specifically SNO implementation, purchasing, Supply Chain mgmt, manufacturing efficiency and packaging
IssuesIssuesIssuesIssues
The TeamThe TeamThe TeamThe Team• Nigel Roberts• Andy Johnson• Neil Crawford
Client: Kevin Williams
• Nigel Roberts• Andy Johnson• Neil Crawford
Client: Kevin Williams
• H2 ensure opportunity owners update the numbers each month
• H2 ensure opportunities are not duplicated• H2 make the system global• H2 provide support to the functions to
generate their savings and reflect them appropriately
• H2 maintain momentum to update numbers each month
• H2 ensure opportunity owners update the numbers each month
• H2 ensure opportunities are not duplicated• H2 make the system global• H2 provide support to the functions to
generate their savings and reflect them appropriately
• H2 maintain momentum to update numbers each month
CSFsCSFsCSFsCSFs
MeasuresMeasuresMeasuresMeasures
• All of the issues are addressed• All elements of the process visibly operational• System in place and users trained by end
1999• Numbers available by the required date each
month• Data used as part of supply chain team PDR’s
• All of the issues are addressed• All elements of the process visibly operational• System in place and users trained by end
1999• Numbers available by the required date each
month• Data used as part of supply chain team PDR’s
• Functional agreement to own the numbers and update the opportunities
• M&S leadership team sign on and support• Supply chain teams sign-on• Person who is accountable for delivering is
also accountable for the data• Clear set of requirements from customers• Numbers tie-in with finance at a broad level• Clear, unambiguous baseline definitions
Benefits Tracking CharterBenefits Tracking CharterEXAMPLE
EXAMPLE
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There are three stages in the Benefits Tracking Process. There are three stages in the Benefits Tracking Process. The first stage is Identification...The first stage is Identification...
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Opportunities identified at a high level - the focus is on thinking broadly rather than worrying about “H2 resource” or “likelihood of success”
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Identifying benefits highlights all opportunities…Identifying benefits highlights all opportunities…
• Start with a workshop!
• Focus on what the KPI will be i.e. where will the benefit be apparent
• Be inclusive at this stage
• “No idea is a bad idea”…
• Getting all ideas down in one place helps with prioritising and checking for duplication
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Don’t be dismissive of ideas or opportunities at this stage!Don’t be dismissive of ideas or opportunities at this stage!
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Rank/group opportunities in terms of the following. . .Rank/group opportunities in terms of the following. . .
OpportunityIdentified
Will it hitP&L?
Will it changeW/capital?
Will it improveCAPEX?
Which streamwill deliver?
What’s thechance ofsuccess?
How complexis it?
What is a realistic target?
What’s our KPI?
- cost avoidance- cost reduction- revenue
enhancement
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
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Submit or “log” the Identified OpportunitiesSubmit or “log” the Identified Opportunities
• Some opportunities may be filtered out at this stage as clearly infeasible
• All other prospects need to be logged on a system that records the thinking done to date and the probability of success
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
See the Benefits Tracking System Business Process document.See the Benefits Tracking System Business Process document.
Business Process Knowledge DocumentBusiness Process Knowledge Document
Process and Support ActivitiesProcess and Support Activities
Benefits Tracking SystemBenefits Tracking System
““The success of the system will be judged upon its ease of useThe success of the system will be judged upon its ease of useand the quality and diversity of the reports produced”and the quality and diversity of the reports produced”
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The second stage is Scoreboarding...The second stage is Scoreboarding...
Opportunities are worked through in detail, culminating in a firm promise to deliver, based on stated assumptions signed off by the client
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunitiesScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Opportunities identified at a high level - the focus is on thinking broadly rather than worrying about “H2 resource” or “likelihood of success”
Benefits Tracking Process (Business Process)
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At the scoreboarding stage, we are trying to pull together At the scoreboarding stage, we are trying to pull together a comprehensive plana comprehensive plan
• What the financials are
• Do we have a workplan?
• What the timing of delivery benefits is
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Scoreboarded opportunities do not have to have a 100% probability of success.Scoreboarded opportunities do not have to have a 100% probability of success.
We need We need to know. . .to know. . .We need We need to know. . .to know. . .
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Scoreboarding requires detailed information. . .Scoreboarding requires detailed information. . .
• Calculation of “net” benefit for an idea (WHAT):– What costs are associated with the idea & when will they occur
– Costs will offset the savings
– More refined calculation than used at the identification stage
• When the benefit will arise - timing and phasing (WHEN):– Current year - by month
– Next two years - by quarter
– Ties into the budgeting requirements & horizons
• Which areas e.g. supply chain(s) will benefit (WHERE):– May have to allocate to multiple supply chains, if necessary
– Estimated allocations are acceptable
• Team that does the identifying and the implementation stream (WHO):– Could possibly be two different streams
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
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. . . and drives delivery of benefits. . . and drives delivery of benefits
• Scoreboarding occurs once “To-Be” recommendations are developed and approved for implementation
• A scoreboarded benefit is a benefit resulting from a recommendation which:
– Has been developed by the project team
– Is quantified and validated
– Is signed-off by the client
– Has been approved for implementation
– Includes an agreed implementation plan and benefits phasing
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
When benefits are scoreboarded, budgets and ETR’s are correspondingly adjusted.When benefits are scoreboarded, budgets and ETR’s are correspondingly adjusted.
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Scoreboarding….Scoreboarding….
. . . doesn’t always happen overnight
. . . is the process through which you get others to sign-on to helping you deliver the opportunities
. . . becomes easier with practice
. . . it may seem tedious or daunting, but it’s well worth doing
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
In 1998 through into 2000 on Project 5 Plus, we learned that getting
our opportunities scoreboarded was the secret of our success
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The third and final stage in the Benefits Tracking process The third and final stage in the Benefits Tracking process is monitoring Delivery. . .is monitoring Delivery. . .
Progress made is tracked against operational and financial targets
Opportunities are worked through in detail, culminating in a firm promise to deliver, based on stated assumptions signed off by the client
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Opportunities identified at a high level - the focus is on thinking broadly rather than worrying about “H2 resource” or “likelihood of success”
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Delivery is actually realising the benefits. . .Delivery is actually realising the benefits. . .
• The aggregation of Scoreboarded Opportunities gives a good forward view of likely outturn of benefits delivery
• Expect a high percentage of scoreboarded benefits to be delivered
• Thorough work at scoreboarding facilitates accurate measurement of delivered benefits:
– Benefits must be quantifiable and measurable
– Should be able to withstand minor audit scrutiny - “prove it”
– Systems need to be in place to capture and measure benefits• part of the workplan developed in scoreboarding• measured data needs to be consistent with scoreboarded data
• Delivery is driven by Scoreboarding as it requires “sign-on”
• This is where we show the reward for the effort!
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
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But what if we fail. . .?But what if we fail. . .?
• It should be viewed as the exception (clients have signed on to deliver)
• Targets are high but realistic enough for delivery
• There is a need to ensure that: – a thorough and professional job is done
– the risks are identified up front
– the opportunity is continually monitored against the scoreboarded plan
– activities are continually communicated
That’s OK! - but. . .
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
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Delivery on the project has been tracked via a number of Delivery on the project has been tracked via a number of business systemsbusiness systems
• Procurement savings in year 2000 were tracked via the ETR (Expected to Reach) analysis, with data provided by the Raw Materials Procurement Database
• Site-based Fixed Cost savings were tracked via an overview of the site expenditure against the appropriately phased budgets
• Delivery of benefits outside the M&S financial reporting systems (i.e. in Latin and Asia) needed to be tracked on a ‘per opportunity’ basis
Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
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It is important to start early and move rapidly through the It is important to start early and move rapidly through the whole process to create a momentum for changewhole process to create a momentum for change
TrackingDelivery
TrackingDelivery
ScoreboardingScoreboarding
Opportunity LoggingOpportunity Logging
Idea GenerationIdentification
Idea GenerationIdentification
Ideas evaluated
Commitment to Action with Plans in Place
Realise the Benefits
What might be possible
RANKING PROCESS
IMPLEMENTATION
SORTING PROCESS
Phase 2
Phase 3
Phase 4
Phase 1Identifying Identifying
OpportunitiesOpportunitiesIdentifying Identifying
OpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
ScoreboardingScoreboardingOpportunitiesOpportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities
A benefits tracking Communications presentation was made available to help people work their way through the process.A benefits tracking Communications presentation was made available to help people work their way through the process.
BENEFITS TRACKING BENEFITS TRACKING
Communications Pack
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0 04.1
10.5
21.2
35.1
44.349.8
0 2.57.5
12.3
22
3138
4347
5360
6774
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
US
D $
m
Identified Scoreboarded Delivered
Flightpath to achieve stretch target of USD 148m (net of project expenses)
Flightpath to achieve Budget target of USD 74m (net of project expenses)
Budget CurrentIdentified
Score-boarded
Delivered2000Total
44
0
13
41
8
8.3
(2.8)
148
1
USD millions relative to 1999 Actual spend
StretchTarget
44
0
5
9
4
4.3
(1.2)
77
1
H1 Budget
0 5.213.4 1.2
3.7 0 -0
9.8 7.5 4.58
28.0 25.1 14.032
4 7.4 3.7 4.0
4 8.3 8.0 3.1
3.1 2.2 0.2
(1.6) (2.8) (2.8) (2.4)
Total (P&L)Total (P&L) 74 107 80 3.6
ManufacturingEfficiency
SC Management
Complexity Red
Labels & Packs
Procurement
Distribution
SNO Implement
Project Costs
Other savings / (Contingency)
Tolling 0
18018 14.6 10.6 7.59.5
0
0
4.5
16
2.51
(Cash)
15.46.49 18.5 18.5 17.7SNO Stretch 0
-
33.5
0
11.0 2.7 2.2 -0
49.8
Examples of the 5 Plus Benefits Tracking Summary and Examples of the 5 Plus Benefits Tracking Summary and flightpath for the end of July 2000 are shown. . .flightpath for the end of July 2000 are shown. . .
SummarySummary
FlightpathFlightpath
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. . . and they corresponded with the ‘benefits bottles’ . . . and they corresponded with the ‘benefits bottles’ which were a visual way of showing progresswhich were a visual way of showing progress
Identified Scoreboarded Delivered
$107.0m Identified
$80.0mScoreboarded
$49.8mDelivered
$60m
$80m
$100m
$120m
$140m
$160m
$40m$20m
$180m
$200m £40
m
$90m
$30m
$40m
$50m
$60m
$20m
$10m
$100m
$30m
$40m
$50m
$10m
$20m
Stretch Goal $151M$151M
$60m
$70m
$90m
$80m
Budget target$70m
$70m
$80m
$100m
$120m
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In summary, Benefits Tracking. . .In summary, Benefits Tracking. . .
Allows all ideas/opportunities to be assessed and progressed through a formalised process
Is a means of achieving and reporting successes
Is a mobilisation and communication tool and gets people involved
Follows a 3-stage process in which owners ensure delivery of benefits
The process is simple and should be kept that way
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Glossary of TermsGlossary of Terms
BSC Balanced Scorecard
PDR Plan-do-Review. A process for ongoing planning, implementation and review of the change process
M&S
H2
KPI
P&L
CAPEX
W/Capital
Manufacturing and Supply Department
‘How to ‘ - often used in a meeting when capturing Concerns in a positive way
Key Performance Indicator - The primary determinants of organisational/operational performance which are measurable; are consistent gauges of achievement
Profit and Loss
Capital Expenditure
Working Capital
ETR “Expected to Reach”. A view of the year end likely out-turn of a savings project or group of initiatives
Scoreboarding The second stage of the Benefits Tracking process which drives a firm promise to deliver, based on stated assumptions signed off by the client
“To-Be” A forward view of processes and activities to be implemented having examined relevant opportunities and designed the appropriate enhancements