BENEFITS REALIZATION ENSURES CHANGE DELIVERS GREATER BUSINESS VALUE

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1 BENEFITS REALIZATION ENSURES CHANGE DELIVERS GREATER BUSINESS VALUE Focusing on the delivery of value-adding benefits is an excellent way to achieve greater ROI from change. Benefits & Value Management offers a powerful approach to identifying, managing and realizing those benefits that will add the most value. We offer the support, tools and processes needed to ensure your change program is a success. From visualizing goals, identifying benefits, and understanding how they will be achieved, to engaging stakeholders, driving change, and delivering solutions that generate value over their entire lifecycle. WHAT CAN YOU EXPECT? ROI in the form of reduced waste, higher productivity and more long-term value Embraced change that delivers positive results early and frequently A shift in organizational culture towards continuous improvement and adding value THE CHALLENGE OF CHANGE Traditional approaches to business change programs offer few guarantees for success. Survey after survey reveals how difficult it is for most organizations to ensure change delivers real business value. For example, it is generally accepted that between 20 and 70% of all large scale IS/IT investments is wasted. It should be remembered that even those projects that fall short of their goals are based on good intentions. They are initiated to meet a need; they are designed to deliver certain advantages; they have specified objectives; and they are carefully reviewed before budgets are approved. Still, all too often, they fail to deliver on their promises. Faced with the need for change, how can you ensure that your project will be successful? NAME YOUR DESIRE A common problem with business change programs is that they focus too heavily on delivering the physical aspects of the project a new technology, a new system, an updated process model. By contrast, a benefits approach shifts the emphasis from the physical deliverables to the desired result i.e. the benefit or improvement that will add value to the business. The question then becomes What do we need to change to achieve the result we want? Focusing on the delivery of well-defined benefits (that are linked to your investment objectives) puts you in a powerful position to achieve greater value from business change. VALUE THE ULTIMATE GOAL There are two phases within benefits realization: Page 1 of 6. PlantVision AB PlantVision AB offers value-adding consultancy services and solutions for improving operational efficiency. To date, we have delivered more than 200 successful projects for customers in the process and manufacturing industries. Kista Science Tower SE Kista Tel: Fax:

2 Benefits realization process. 1) Identifying those benefits that will meet your organization s needs whilst adding the greatest amount of value. 2) Doing everything possible to ensure those benefits are realized and the maximum amount of value is attained. While the concept is simple this approach requires a determined effort. The key to success lies in understanding and managing the relationships that link the different parts of the puzzle. At PlantVision our experience with Benefits & Value Management means we can support you throughout your entire change program. We offer direction, tools, techniques and processes as part of a coordinated effort to ensure business change generates the maximum amount of value for your organization. BENEFITS REALIZATION PROCESS Every organization is different. Every change program is different. Even so, the basic principles behind a benefits approach remain the same. We can help you adapt the process to your needs and provide whatever support you require at each stage. 1) SITUATION WHAT IS YOUR GOAL? Those who haven t decided where they are going should not be surprised if they never get there! It is important to start with a clear understanding of where you are, where you have come from, and where you are headed. What are the company s strategic drivers? What are the challenges facing your organization? How should these be prioritized? Where should you focus your efforts? What should an investment deliver? What are your goals? Page 2 of 6.

3 Benefits should also be about people, not just money, quality and time. 2) IDENTIFY BENEFITS WHAT WILL YOUR FUTURE LOOK LIKE? Once you know where you are headed it is time to get creative. Identify and explore all the possible benefits that could be achieved from the investment. Prioritize them in terms of value and feasibility. This also means identifying soft benefits, not just those relating to quality, time and money. For example, how might improving information sharing, job satisfaction or team working improve performance and add value to your business? Here, it is important to involve stakeholders from all areas that could benefit from change. Voicing internal and external user stories will help you to build a full and rich picture. Involving key stakeholders also results in a greater sense of ownership and engagement, which are essential for success. 3) JUSTIFY CHANGE ADD CONFIDENCE Stop? Go? The decision whether or not to approve the change initiative is undoubtedly the single most important step in the project. Too many projects are given the green light without a clear idea of what a successful outcome should look like, or without any insight into the company s ability to deliver the extent of change required. The decision should be based on a carefully created Business Case. One of the cornerstones of which will be the future vision of achievable benefits generated in the previous step. The Business Case links this vision to business strategies and drivers, describes the key stakeholders, and details costs, resource requirements, and risks. It should be a living document and be updated at each stage as you learn and discover more during the change process. 4) SPECIFY, ASSESS & ASSIGN CREATE A ROAD MAP FOR CHANGE The next stage is to gain a clearer understanding of the benefits and how they will be achieved. It is important to realize that the various elements of a project are not discrete. One part affects another. Achieving a desired outcome usually depends on the achievement of several other outcomes, which, in turn, may affect other parts of the project, or even another project altogether. A key tool here is the Benefits Dependency Chart (example shown on next page). This is developed with the help of key stakeholders and reveals the network of cause and effect relationships that make up the project. It provides insights into the changes and tools that need to be in place to enable realization of each benefit and how these benefits relate to the investment objectives and business drivers. The Benefits Dependency Chart is a simple, visual, dynamic communication tool. It can be used to build understanding, gain commitment, show priorities and agree responsibilities. It also helps set expectations by showing what will (and what will not) be delivered. Once agreed, it becomes a powerful visual road map providing focus and guidance throughout the change program. 5) BENEFITS REALIZATION PLAN WHO, WHAT, WHERE, WHEN? To ensure smooth implementation a more formalized plan needs to be drawn up based on the prioritized and achievable benefits. This will provide the details around goals, deliverables and deadlines, along with who is responsible for what. Page 3 of 6.

4 Simplified example of a Benefits Dependency Chart. Do not delegate specific activities. Instead delegate goals. Stakeholders should be given responsibility for creating value, rather than simply delivering to a list of specifications. Planning should also address the emotional element of change. Resistance to change is a natural phenomenon. It is human nature to want to continue to do things the way we have learnt and are comfortable with. How you overcome this resistance will depend on the extent of change required and the type of culture within your organization. 6) EXECUTE BENEFITS PLAN MANAGING CHANGE Objectives are owned by organizations but benefits should be owned by individuals. The delivery team needs to be made up of engaged and committed individuals who feel responsible for achieving their benefits. Projects never run 100% smoothly. Focus needs to remain on achieving the value goals that have been set. This means being flexible and willing to alter your course if you see things moving in the wrong direction - whether that relates to technology development or changes to structure and processes. 7) MEASURE BENEFITS ARE YOU ON TRACK? Progress should be reviewed at regular intervals as some benefits will be realized quicker than others. It is a good idea to identify some quick wins early on to show progress and to be able to measure against. The Benefits Dependency Chart can be used to help track and evaluate progress and make sure efforts remain correctly focused. The important point to remember is that a benefit is only real once it is demonstrated. A thorough review that accounts for all benefits needs to be carried out after project delivery. Which benefits were realized? Which did you fail to capture? Can these still be captured if you make further changes or add additional resources? Or should they be written off? 8) EXTEND BENEFITS CAN YOU GET MORE? A major advantage of a benefits realization approach is that it creates a new mind set within the organization. It switches people on to the idea of adding value and eliminating waste, rather than simply carrying out tasks. Oftentimes this produces a snowball effect, with bright idea building on bright idea. Take advantage of the lessons learnt and maximize the benefits you have achieved. How can they be exploited to create even greater value? How can you ensure longevity? What else can you do to leverage success? Is there any more value you can extract from this project? 9) BUSINESS VALUE ADDED MEASURE YOUR SUCCESS Your ultimate goal is to add value to your business. The value generated can be defined as Page 4 of 6.

5 the sum of realized benefits minus the cost of change over the whole of the investment cycle, normally 3-5 years. How well did you do? The chances are you did a whole lot better than you would have done using the traditional specify and deliver approach. You will have eliminated the non-value adding tasks and even if you missed some of the benefits you know exactly where and why they were missed. There is also one final benefit. The journey itself has value. The experience gained from the project increases your organization s knowledge and capabilities. You can expect even more from the next change project. GETTING STARTED OK, a benefits realization approach sounds good, but our situation is complicated. How and where do I start? Every organization has its own special circumstances. Every situation has its own complexity. Difficult challenges in complex environments is where we thrive. We have been helping customers to increase the value of their operations for more than 15 years. Our experience has been gained from inside process and manufacturing companies. This means we can offer knowledge, insights and unique expertise when it comes to identifying and delivering benefits. PlantVision is your ideal partner and the ideal place to start. We will ensure a holistic approach where business changes deliver value over their entire lifecycle. It s what we do. WHERE PLANTVISION CAN ADD VALUE Our goal is to give you the best possible chance of achieving real sustainable value. Direction, guidance, tools, techniques and processes are tailored to meet the needs of your business area and the level of support you require. i) START-UP/PLANNING PHASE We can provide guidance or more specific direction, planning and organization to help get the change initiative off the ground. Workshops are a key tool during the early stages. In addition to being a source of ideas and creativity, workshops encourage engagement, cooperation consensus and a sense of ownership as well as being a fun and rewarding experience in their own right. We can provide coaching and workshops for a variety of purposes. For example: Big Picture workshops to establish project focus and goals in support of company strategies; Benefits workshops to identify, describe and prioritize achievable benefits; Benefits Dependency workshops to reveal the relationships between project outcomes and generate a visual road map for success; Coaching and training in Benefits & Value Management to provide understanding and insights into the core principles and tools. Workshop length (usually between half a day and two/three days) depends on the scope of the challenge and the workshop goals. The single most important success factor is ensuring that the right people are in attendance. We can also support the development of both the Business case and the Benefits Realization Plan. Either providing input around project goals and benefits, or developing the full proposal and then working with you to gain approval. ii) IMPLEMENTATION PHASE Once the project reaches the execution phase change management becomes increasingly important. The project moves forward on many fronts simultaneously. We can provide support in the form of direction and coaching, or by taking a more hands on role. For example, overseeing part of the implementation, tracking overall progress, or monitoring, measuring and reporting benefits as they are realized. iii) REVIEW & EXTEND PHASE Following-up after project closure is vital. The full extent of the return on investment is realized at the end of the investment lifecycle, normally Page 5 of 6.

6 after 3-5 years, so it is crucial to maximize the full potential of benefits and value. We can support you with tracking and accounting of individual benefits, planning additional change to extend value, and reporting and evaluating the success of the overall project. Workshops can again be used at this stage to explore recapturing of missed benefits, extend business value, or simply gather feedback that can be used to improve future projects. SEE, FEEL & CHANGE A Benefits & Value Management approach requires a good deal of commitment, some additional investment, and an element of courage. But the potential rewards are enormous. Not just in terms of greater business value, but also on a personal level for you and your colleagues. The process itself is a meaningful, rewarding and exciting experience. It reaches across the organization and can have a positive effect on company culture and future competitiveness. The success of your project will come down to three things see, feel and change. SEE: Making sure the vision, goals and road map are clearly presented and understood by all. FEEL: Inspiring people making them feel committed and engaged. Their emotional energy will be the fuel that drives the project forward. CHANGE: Finally, driving change itself. Ensuring change is understood, embraced and efficiently carried out. We understand the nature of creating value from challenging situations. That is something you can rely on at every stage from day one until it s time for champagne and strawberries! PlantVision AB, (v1.0) Page 6 of 6.

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