Monthly Archives: October 2021

Delivering Enterprise Outcomes Through Collaboration

The world is full of gizmos and gadgets that people don’t want, don’t need, and certainly don’t want to pay for.”  – Kimberly Wiefling ‘Scrappy Project Management’ (2007).

Benefits Realisation Map – New HR System[1]

‘Benefits maps provide a visual description that illustrates the links between outputs and objectives. Benefit maps allow us to create a shared vision of success, craft effective Enterprise Performance Measures, and ensure Performance Management Frameworks are fit for purpose’

Introduction

Successful projects or programmes focus on benefits realisation and the delivery of enterprise objectives.  Traditional contract approaches attempt to ‘compartmentalise’ contract scope and allocate liabilities to suppliers in an arms-length manner. In such circumstances, suppliers can deliver 100 percent on time, on cost and to A1 specification[2] yet the customer may fail to realise any expected benefits despite the supplier’s success.  In Andrew Jacopino’s blog on performance based contracting, he highlights the problem with the watermelon effect. This arises where all suppliers can report their performance as fully compliant or ‘green’, yet the customer is not being provided with any tangible value and hence, the customer score is in the ‘red’. A reaction to this problem was the introduction of third generation performance-based contracts. These contracts incorporate Enterprise Performance Measures (EPMs) to drive all parties to a ‘shared destiny’.[3] Implementing EPMs to achieve a shared destiny though is a significant challenge.  In this blog, I explore how we can use the Managing Successful Programmes benefits realisation mapping process to effectively integrate third generation, performance based contract frameworks. This will ensure all parties work collaboratively towards delivering enterprise outcomes.

Benefits, Objectives, and Outcomes

A benefit is defined as a “measurable improvement resulting from an outcome perceived as an advantage by one or more stakeholders, which contributes towards one or more organisational objective(s)”.[4]  Benefits contribute to corporate objectives as illustrated in Figure 1 below:

Figure 1: Mapping of Outputs, Capabilities, Outcomes, Benefits and Objectives[5]

As we have mentioned in previous blogs, it is rare that suppliers would be solely responsible for delivering the actual benefits or corporate objectives to a customer.  In most Performance Based Contracts, it is the outcomes that are often within the remit of suppliers.  The Australian Department of Defence Productivity and Performance Based Contracting Guide for ASDEFCON (Support) makes this point clear

“KPIs are Performance Measures that measure the contribution of the Contract in achieving  outcomes”[6]

KPIs by themselves may not deliver any benefits or objectives.  For example, we could have KPI’s that are linked to fleet availability, or repairable item turnaround time.  Achieving all these outcomes with 100 percent compliance may not result in any capabilities being available if the customer does not have people trained in the system, essential infrastructure, or other enabling systems necessary to realise benefits. In this situation, corporate objectives will not be achieved.  We must therefore ensure that there is a clear picture of what outcomes need to be delivered collectively to ensure benefits and objectives are achieved. An effective tool to achieve this is through benefits mapping.

Benefits Mapping

Benefits mapping illustrates the relationships between outputs, capabilities, outcomes, benefits and objectives.[7] Benefit maps allow us to clearly identify project or program interdependencies and identify the relevant importance of each output. When we craft a benefits map, we start at the right (objectives) and work towards the left (outputs). This ensures that all activities are focussed on delivering the organisations’ objectives.  In Peppard’s paper ‘A Tool to Map Your Next Digital Initiative’, he provides a useful illustration of a benefits dependency map, reproduced below:

J. Peppard ‘A Tool to Map Your Next Digital Initiative’ Harvard Business Review (June 2016).

Benefits maps such as the above, provide us with substantial value, including:

  1. Visibility of all activities needed to achieve corporate objectives;
  2. Assurance that all projects/outputs deliver ‘fit for purpose’ outcomes,
  3. Identification of the relative importance of each output in the program (for example, where a single output can contribute to more than one benefit);
  4. A clear picture of interdependencies of outcomes;
  5. A means to clearly identify ‘Enterprise Performance Measures’; and
  6. A process for providing defensible business cases, whereby every project can be shown to contribute to corporate objectives.

Crafting a benefits map, such as the above, requires a holistic view of all the outcomes required to deliver objectives.  There is a temptation to simply focus on technological outputs or ‘mission systems’ but this ignores the many other critical outputs, capability, and outcomes necessary to delivery objectives.  The Australian Department of Defence uses the term, Fundamental Inputs to Capability (FIC) to refer to all the additional outputs necessary to deliver capabilities. These include[8]

  1. Organisation,
  2. Command and Management,
  3. Personnel,
  4. Collective Training,
  5. Major Systems,
  6. Facilities and Training Areas,
  7. Supplies,
  8. Support, and
  9. Industry.

In summary, a benefits map needs to clearly identify all interdependent outputs and capabilities needed to deliver benefits and objectives.

Industry Engagement

The benefits map should be crafted as early as possible and well before we engage with industry. Nonetheless, as the benefits map matures (and we move from solution independent to solution dependent needs), the benefit map needs input from key stakeholders.[9] Industry engagement is therefore of critical importance in ensuring our benefits map is optimised for the following reasons:

  1. Validation of outputs. Industry is far more likely to have a grasp on what outputs can be delivered in their core business areas. This includes realistic estimates on performance outcomes, cost, and schedule.
  2. Efficiency. Several outputs can be bundled together and allocated to a single contractor in the interests of efficiency. Industry input is required to explore these opportunities.
  3. Crafting a Shared Vision. With co-development of the benefits map, buyers and suppliers are far more likely to buy into a shared vision of success.
  4. Developing Effective Key Performance Indices. Where we have full visibility of all outputs, capabilities, and outcomes required to deliver benefits and objectives, then our performance management framework will be far more robust.
  5. Enterprise Performance Measures.  Where customers and suppliers have an agreed and transparent benefits map, then all parties can progress to developing effective enterprise performance measures and work towards delivering the enterprise outcomes.

Industry engagement in this process will of course introduce some challenges with ‘contamination’ of solution independent needs with proprietary solutions and associated probity risks.  Likewise, with multiple industry participants, challenges may arise with how bundling outputs will be managed as there is an inherent motivation for suppliers to grab as much work as possible.  Nonetheless, where we engage with suppliers who have an affinity to collaboration, such issues should be manageable.

Conclusions

Benefit maps are powerful tools that clearly show what output and capabilities are required to deliver enterprise outcomes.  Benefit mapping will be more effective if we engage a wide variety of key stakeholders, including industry.  The benefit map will ensure we have a clear understanding of what success looks like, will inform our enterprise performance measures, and ensure the broader performance management framework is fit for purpose.


[1] Axelos “Managing Successful Programmes” 4th Ed (2011) Fig 7-7.

[2] T. Lendrum “Building High Performance Business Relationships” (2011) p81.

[3] A. Jacopino ‘Mastering Performance Based Contracts: From Why to What to How’ (2018).

[4] Axelos “Managing Successful Programmes” 4th Ed (2011) p75

[5] Ibid, p83.

[6] Australian Department of Defence ‘Productivity and Performance Based Contracting Guide for ASDEFCON (Support)’ V4.0, p1

[7] Axelos opcit, p83.

[8] Australian Department of Defence “Capability Life Cycle Manual’ v2.1 (2020), p2.

[9] Axelos, opcit [7.4.1]