Assess Complexity. Assess Capability. Align for Success. Improving Infrastructure Delivery: Project Initiation Routemap

Transcription

1 Assess Complexity Assess Capability Alig for Success Improvig Ifrastructure Delivery: Project Iitiatio Routemap Hadbook Versio 1.1 October 2014

2 Crow copyright 2014 You may re-use the Improvig Ifrastructure Delivery: Project Iitiatio Routemap (Routemap) ad its associated tools free of charge i ay format or medium uder the terms of the Ope Govermet Licece. To obtai a copy of this licece, psi@atioalarchives.gov.uk. Where we have idetified ay third party copyright tools or iformatio you will eed to obtai permissio from the copyright holders cocered. Ayoe usig the Routemap does so at their ow risk ad o resposibility is accepted by HM Govermet for ay loss or liability which may arise from such use directly or idirectly. Ay equiries regardig this publicatio should be set to us at public.equiries@hmtreasury.gov.uk You ca dowload this publicatio from: ISBN

3 Improvig Ifrastructure Delivery: Project Iitiatio Routemap Hadbook October 2014

4 Ifrastructure UK & the Ifrastructure Cliet Group Ifrastructure is the backboe for the UK ecoomy. It provides the etworks ad systems that supply ad support reliable ad cost effective trasport, flood protectio, eergy, commuicatios, water ad waste maagemet. These are vital to esurig that the UK remais a competitive force i the global race. The govermet is committed to establishig a log-term sustaiable pla for ifrastructure ivestmet. Ifrastructure UK (IUK) s Cost Review Report 2010 idetified the opportuity to improve ifrastructure delivery. It set a target to remove wastage ad make efficiecy savigs of at least 15 per cet by 2015 across public ad private sector ifrastructure delivery. The govermet s Costructio 2025 Strategy goes further, settig a target of lowerig costs by 30 per cet ad reducig time by 50 per cet. The govermet, through IUK, cotiues to work with idustry to drive improved productivity ad remove wastage i the delivery of ifrastructure ivestmet. These measures are providig better value for moey for taxpayers ad cosumers. Across public ad private sectors, these combied efforts are startig to yield success. However, there is o room for complacecy. There is still much to be doe to match the levels of efficiecy ad productivity see i some other sectors. The Ifrastructure Cliet Group is demostratig the value of effective collaboratio betwee govermet ad idustry to support the developmet ad exchage of best practice ad delivery improvemet. Iitially brought together by IUK to support the Ifrastructure Cost Review work, the membership of this group is represetative of the major ifrastructure cliets. It has bee istrumetal i settig a commo ageda for chage ad supports a programme of activities ad applied kowledge trasfer across the public ad private sectors. The success of this iitiative has bee made possible by the cotiued ad valuable support from idustry ad academic parters. Lord Deighto Commercial Secretary to the Treasury Simo Kirby Chair of the Ifrastructure Cliet Group

5 Preface The UK has a prove capability i deliverig successful projects ad iovatio, where the imperative ad coditios for success have bee properly prepared. The Olympics demostrated the beefits of havig a clear set of requiremets ad delivery imperatives i place at a early stage. However, there remai may examples of poorly executed projects across both public ad private sectors. The Ifrastructure UK Cost Review Report 2010 ad successive studies, icludig the Natioal Audit Office s Guide to Iitiatig Successful Projects, have all idetified the eed for a greater focus o the early stages of projects to esure that they are set up to succeed. Rigorous focus o establishig the right delivery eviromet ad capability, matched to the complexity of the project, is vital to improvig outcomes. The Project Iitiatio Routemap (Routemap) is a product of govermet workig collaboratively with idustry ad the Uiversity of Leeds, through the Ifrastructure Cliet Group. Built o lessos leared by both public ad private sector, the Routemap provides a much-eeded framework to help idetify ad address may commo ad recurrig problems, particularly durig the early stages of projects. It eables sposors ad those resposible for project delivery to properly alig complexity with the ecessary capabilities ad other ehacemets to esure a more successful outcome. Pilot applicatios have demostrated its value as a tool for testig ad developig the compoets ad coectios required to create a successful delivery eviromet. It idetifies the characteristics commo to successful project delivery while recogisig there is o oe size fits all solutio. This versio of the Routemap replaces the cosultatio draft published i Jauary It adds a suite of additioal supportig modules that provide further support to address some of the most frequetly occurrig issues foud durig the iitial pilot applicatios. Further Routemap resources ad case studies ca be obtaied by followig these liks: The followig orgaisatios have cotributed to this latest versio of the Routemap.

6 Uderstad the delivery eviromet you HAVE, the CREATE the oe you eed. Ady Mitchell, Programme Director, Crossrail

7 Table of Cotets Sectio 1 Itroducig the Project Iitiatio Routemap 8 Sectio 2 Assess Complexity 14 Sectio 3 Assess Capability 18 Sectio 4 Alig for Success 28 Sectio 5 Applyig the Project Iitiatio Routemap 34 Sectio 6 Appedices 40 Appedix A Appedix B Appedix C Appedix D Appedix E Appedix F Appedix G Qualifyig Checklist Orgaisatio Systemic Aalysis Capability ad Complexity Gap Aalysis Cliet ad Market Capability Gap Aalysis Refereced Examples Glossary List of Cotributors 7 Project Iitiatio Routemap Hadbook

8 ess Complexity Same but more complex Same complexity approach Sposor AssComplexity Capability Asset Maager Assess Capability Cliet New to Orgaisatio Procuremet Alig for Success Market Requiremets EhDeliver acemets & Check Orgaisatioal Desig Executio Strategy Pla Ehacemets Goverace Idetify Gaps Sectio 1 Itroducig the Project Iitiatio Routemap I welcome the ivolvemet of cliets ad idustry i the developmet of the Project Iitiatio Routemap. Focusig o matchig capability with complexity ad the eablers of successful delivery will sigificatly improve project outcomes. The Ifrastructure Cliet Group looks forward to supportig the implemetatio of the Routemap ad will cotiue to provide a forum for cliets to share experieces ad best practise to support successful ifrastructure delivery i the UK. Simo Kirby, Chair of the Ifrastructure Cliet Group 8 Project Iitiatio Routemap Hadbook

9 Sectio 1 Itroducig the Project Iitiatio Routemap Why is the Project Iitiatio Routemap (Routemap) eeded? Projects that ehace ad expad the UK s ifrastructure are critical to the atio s success, therefore it is importat to esure that these projects do ot fall short of expectatios. Various studies ito the causes of failure o such projects have clearly show that more focus o creatig the appropriate delivery eviromet could have preveted poor performace. The Cabiet Office Review Guidace: Commo causes of programme/project failure (2012)* icluded the followig: Lack of clear lik betwee the project ad the orgaisatio s key strategic priorities, icludig agreed measures of success; Lack of clear seior maagemet ad miisterial owership ad leadership; Lack of effective egagemet with stakeholders; Lack of skills ad prove approach to project maagemet ad risk maagemet; Too little attetio to breakig developmet ad implemetatio ito maageable steps; Evaluatio of proposals drive by iitial price rather tha log-term value for moey (especially securig delivery of busiess beefits); Lack of uderstadig of ad cotact with the supply idustry at seior levels i the orgaisatio; Lack of effective project team itegratio betwee cliets, the supplier team ad the supply chai. The Ediburgh Tram project provides a example of a project that may have falle short of expectatios ad failed to create the right delivery eviromet, geeratig ucomfortable headlies such as this:...i the decade sice the first moey was allocated to the project, the price has doubled, the etwork has halved ad it has take twice as log to build as was first thought. BBC Scotlad News Website (30 May 2014) Goig off the rails: The Ediburgh trams saga. The sposors ad cliets of ifrastructure projects have a key role to play i establishig the appropriate delivery eviromet, i order to avoid these causes of failure ad create the foudatios for project success. The marked improvemet i project performace achieved by the Highways Agecy sice 2006 provides a clear example of what ca be achieved. Efficiecy Nichols Review Orgaisatioal Review Gateway cotrol frameworks Portfolio maagemet & kowledge share GovCo (2006) (2014) (2015 +) Time I the Nichols report Review of the Highways Agecy s Major Road Programme (2007), the root causes of poor project performace were idetified as primarily beig i the establishmet of a appropriate delivery eviromet, rather tha the subsequet executio of the projects. The Highways Agecy respose was to focus o a review ad staged improvemets of their goverace ad programme structure supported by improved data ad stregtheig capability. This has resulted i otable performace improvemets across their projects ad meas the Highways Agecy is ow well placed to move to a GovCo as part of the Roads Reform. Throughout this guide the term project is used to mea both project or programme. * Cabiet Office Review Guidace dowload available at: 9 Project Iitiatio Routemap Hadbook

10 Sectio 1 Itroducig the Project Iitiatio Routemap Pilot applicatios of the Routemap have demostrated its value as a framework that allows sposors ad cliets to establish what they eed to do to create the appropriate delivery eviromet for a specific project. It achieves this by framig a assessmet of a project s complexity together with the orgaisatios capability to udertake the project, ad so idetifies complexity-capability gaps that eed ehacemet for the project to be successful. Usig the Routemap is like holdig a mirror up to yourself. We used it retrospectively at Crossrail ad demostrated that the compoets of the Routemap correspod to the challeges that Crossrail faced ad how they were actually dealt with (may ituitively). The key lessos we took from its use were: Uderstad the eviromet you have ad create the oe you eed; whe plaig for a major trasitio cosider - what differig skills, structures ad processes are required at differet phases; reflect o the optimal programme iterfaces to avoid edig up with them by accidet, expedig uecessary resource; ad protect ad keep the crucial programme elemets movig, eve i the face of orgaisatioal chage. Ady Mitchell, Programme director, Crossrail What is it? The Routemap is a aid to strategic decisio-makig. It supports the aligmet of the sposor ad cliet orgaisatios capability to meet the degree of challege durig iitiatio ad delivery of a project. It provides a objective ad systemic approach to project iitiatio fouded o a set of assessmet tools that help determie: Complexity ad cotext of the delivery eviromet; Capability of curret ad required sposor, cliet, asset maager ad market; Key cosideratios to ehace capability where complexity-capability gaps are idetified. The Routemap helps orgaisatios to uderstad their curret delivery eviromet the create the oe they eed. For istace, it provides assistace o addressig the most commo capability gaps that sposors ad cliets eed to ehace, such as blurred goverace structures, or lack of aligmet betwee beefits ad requiremets. These are explored i more depth i supportig Alig for Success modules, which are outlied i sectio 4. The itetio is to address issues as early as possible i the project life cycle. However, as projects progress, the assessmet ad gap aalysis results ca be reviewed ad the Alig for Success modules revisited, i order to fie-tue the ehacemet activities. What it is ot? The Routemap is ot a: prescriptive process. It is meat to eable reflectio o the project eviromet; route to a sigle solutio. It esures that the right questios are asked at critical poits i the project lifecycle; replacemet for existig assurace ad review procedures, though its outcomes ca support these; maturity model for orgaisatioal capability buildig. However, applyig the Routemap o specific projects may idetify orgaisatioal issues that eed ehacig. Who is it for? The Routemap is aimed primarily at public or private sector sposor ad cliet orgaisatios that deliver ifrastructure projects. It provides particular value where a proposed project is either ew i its ature to the participatig orgaisatios, is beig delivered i a differet way, or is o a sigificatly bigger scale tha those previously udertake. 10 Project Iitiatio Routemap Hadbook

11 Sectio 1 Itroducig the Project Iitiatio Routemap What does it cotai? The tools withi the Routemap assess the capability of the sposor, cliet, asset maager orgaisatios ad the market, together with the complexity of the project eviromet. Through this aalysis, areas of aligmet ad misaligmet ca be idetified. It cotais detailed checklists to use durig the iitial assessmet steps, advice o how to do the gap aalysis, ad advice about what to iclude i plas for a ehaced project eviromet. The compoets of the Routemap are: Complexity Assessmet The Delivery Eviromet Complexity Aalytic (DECA) * - a set of 12 factors that determie complexity. Capability Assessmet Sposor - stregthes uderstadig of the requiremets for the sposor s capability durig the ivestmet ad delivery plaig process; Asset maager - highlights key operatioal costraits ad requiremets to be cosidered; Cliet - cosiders the ability of the cliet orgaisatio to egage effectively with a appropriately selected supply chai, ad to maage the delivery outcomes; Market reviews the market s ability ad appetite to respod to the requiremets. The complexity ad capability assessmets idetify the areas that require ehacemet i order to achieve project success. To support ehacemet, a series of supplemetary modules have bee developed that deal with these commo topics that eed to be addressed. Alig for Success modules There are curretly five Alig for Success modules that provide orgaisatios (sposors ad cliets) with advice o ehacig capability i the followig areas: Requiremets; Goverace; Executio Strategy; Orgaisatioal Desig & Developmet; Procuremet. This list is ot exhaustive ad other areas of capability may eed to be examied as part of the process of improvig delivery. Additioal modules may be developed whe other areas are idetified. Not oly did the process work i helpig to idetify the approach to procuremet through costructive challege i a series of workshops, it also gave cofidece durig subsequet assurace that the right solutio was beig pursued. Peter Quarmby, Thames Estuary Flood Risk Programme Director, Eviromet Agecy Too ofte projects are started o a urealistic basis, so it is o surprise there are problems i delivery. MPA has bee delighted to support the developmet ad evolutio of the Routemap as a way of providig a more structured approach to uderstadig the challeges facig ifrastructure projects ad their deliverability. Tim Bafield, Director, Strategy, Major Projects Authority *The DECA (October 2013) has bee developed by the Natioal Audit Office ad is icorporated withi the Routemap with their permissio. 11 Project Iitiatio Routemap Hadbook

12 Sectio 1 Itroducig the Project Iitiatio Routemap Decidig whether to use the Routemap Not every project will beefit from usig the Routemap, or eed to apply it fully. Workig through the questios i the diagram below should help decide the best way forward. The Qualifyig Checklist i Appedix A helps idetify the miimum set of Routemap compoets that the project would beefit from usig. Is the project either o a larger scale or more complex tha ay that have bee previously udertake by your orgaisatio? No Yes Will the differece require a fudametal shift i approach? Are critical aspects of requiremets, goverace, procuremet ad delivery udecided? Are there kow areas of misaligmet betwee stakeholders, sposors, cliets ad market? Have projects historically failed to deliver o outcomes? Have iteral or exteral reviews idetified the eed for improvemet? Yes to either No Yes to ay Are you cofidet that you are set up for success i terms of requiremets, goverace, orgaisatioal capability, procuremet ad delivery approaches? No Yes No Routemap ot critical to success Partial Routemap recommeded Full Routemap recommeded 12 Project Iitiatio Routemap Hadbook

13 The Routemap has provided a fulcrum for us to chage. Miles Ashley, Programme Director, Lodo Udergroud

14 ess Complexity Same but more complex Same complexity approach Sposor AssComplexity Capability Asset Maager Assess Capability Cliet New to Orgaisatio Procuremet Alig for Success Market Requiremets EhDeliver acemets & Check Orgaisatioal Desig Executio Strategy Pla Ehacemets Goverace Idetify Gaps Sectio 2 Assess Complexity We foud strikig patters i the reasos for projects failig, which all related to the importace of uderstadig the delivery eviromet ad complexity of the project whe makig a decisio whether to proceed. Orgaisatios which really uderstood the iheret challeges of their project were able to create a eviromet for success at the earliest stages of its desig, while those which did ot set themselves up for failure at a later stage. Source: Natioal Audit Office 14 Project Iitiatio Routemap Hadbook

15 Sectio 2 Assess Complexity Usig the Delivery Eviromet Complexity Assessmet (DECA) tool Why uderstadig complexity is importat Lack of uderstadig of the cotext i which a project is beig created ad delivered is a sigificat cotributory factor to project failure. Uderstadig the wider project eviromet is especially importat where the proposed project may i itself be more complex or o a larger scale tha ormal, or is beig delivered i a ovel way. Purpose The DECA (see followig page) is a tool for cosiderig the challeges, complexity ad risks to delivery of a project, policy or area of work. It provides a focus for discussio ad cosolidatio of existig kowledge through cosideratio of the likely impact of 12 factors which are key ifluecers of success or failure. These factors ca be used to develop a broad, high-level uderstadig of a orgaisatio for assessig the challeges surroudig the implemetatio of major projects. How to assess delivery eviromet complexity Users decide whether the potetial impact from each factor is high, medium or low to build a overall picture of the delivery eviromet ad its complexity. Whe applyig the DECA various approaches have bee applied to decide o the complexity ratig, for example: a team meetig or workshop to share existig kowledge ad complete the DECA together; team members each complete a DECA separately ad the compare their thoughts; a sigle team member completes the DECA, with other team members addig their ow thoughts ad commets afterwards. Further advice ca be foud i the Natioal Audit Office publicatio The DECA: Uderstadig challeges i deliverig project objectives. (2013) Usig the DECA results There is ecessarily a judgemet to be made as to whether overall complexity is low, medium or high because differet factors will carry more weight i some projects tha others. For istace, 5 highs, 3 mediums ad 4 lows may look like a fairly eve spread across the factors but averagig these out to give a overall medium complexity would give too little weight to the high factors whe aalysig the complexity-capability gap later o i the Routemap process. As well as feedig ito the Complexity-Capability Gap Aalysis, completio of the DECA geerates a profile that ca be used by the sposor ad cliet to saity-check risk ad readiess at various poits i the project lifecycle. It also helps improve team uderstadig of what they will eed to deal with i the project. The results of this assessmet combied with the Capability Assessmets the feed i to the developmet of a robust delivery pla tailored for the project. 15 Project Iitiatio Routemap Hadbook

16 Sectio 2 Assess Complexity Delivery Eviromet Complexity Assessmet (DECA) Factor Low (Level 1 Complexity) 1 Low 2 Med 3 High Strategic importace Low priority operatioal level project. Expected beefits are ecessary but low i value relative to orgaisatio s/govermet s overall ambitios. Exterally there is little political, media or public iterest ad failure would ot have sigificat impact outside the orgaisatio. Stakeholders / Ifluecers Low umber of stakeholders or level of ifluece. Stakeholders are aliged with the busiess objectives, supportig the project ad agreeig o the expected outcomes. Key stakeholders ad ifluecers are ulikely to chage. Requiremets ad Beefit Articulatio Requiremets ad expected beefits are clear ad liked to busiess policy. Key performace measuremets lik to goals, visio ad values. Stability of overall cotext Requiremets, goverace ad delivery modes are clear ad ulikely to chage. No sigificat risk of chage i scope, structure, exteral requiremets or ecoomic/political ladscapes. High degree of cofidece i plaig, estimates ad/or goverace. Necessary approvals/ ivestmet already received or guarateed. Fiacial impact ad value for moey Ivestmet is ot sigificat relative to sposorig body s capital expediture, or comparable ivestmets. Project is ot material to key suppliers. Aticipated reveues, efficiecies or returs o ivestmet are ot fudametal to the busiess. High level of assurace over key estimates. Executio Complexity (icludig Techology) No ew or utested busiess practices or techologies form part of the scope. There is frot ed loadig for phased implemetatio ad pilotig if required. Orgaisatio or its parters has past experiece of all practices, key techologies ad methods used. Iterfaces / Relatioships Project spas few boudaries (orgaisatioal, political, regioal) ad success is ot depedet o relatioships. Goverace is ot complex ad supports decisio-makig ad reportig. Success is ot depedet o factors outside cotrol of the orgaisatio. Rage of disciplies ad skills Delivery ivolves few specialist disciplies or skill requiremets. Acquirig the skills for implemetatio is straightforward ad readily available i the market. Depedecies Project is ot critical to the delivery of other projects. Extet of chage Busiess as usual. Orgaisatioal capability: performace to date Demostrated capability to deliver project through delivery of similar successful projects. Culture promotes itelliget cliet attributes. Itercoectedess Cosideratio of the required aligmet ad relatioships betwee policy, culture, practices, techology, people, processes ad procedures. Iterrelatioships iform decisio-makig ad risk maagemet. High (Level 3 Complexity) Critical to delivery of policy, key strategic objectives or legal obligatios, with very high expectatio of beefits. High level political or public iterest with strog media attetio. Failure would have major impacts ad cosequeces outside the orgaisatio. Sigificat umber of stakeholders with high levels of ifluece ad differig or misaliged objectives/expectatios. Stakeholders/ifluecers may chage. Ambiguity aroud requiremets ad how the expected beefits cotribute to the realisatio of the goals, visio ad values. High ucertaity o project impact. High risk of scope, structure, exteral requiremets or ecoomic/political ladscapes chagig. Low level of certaity withi key estimates, plaig ad/or goverace. Ucertaity over whether ecessary authorisatios will be received. Ivestmet is sigificat for the sposorig body. Ivestmet expected to deliver sigificat value for moey, efficiecies or returs. Highly ivolved type/source of ivestmet aticipated. Low level of assurace over key estimates. New/utested busiess practices or techology is required. Wide scope ad challegig objectives with limited scope for risk maagemet such as phased implemetatio or pilotig due to immovable deadlies ad demadig targets. Project spas may boudaries with iteral ad exteral parters. Success is depedet o factors maily outside cotrol of the orgaisatio ad is depedet relatioship maagemet. Goverace is complex. Large umber of disciplies ad skills ad/or potetial for strai o the supply chai capacity ad capability. Project is critical to the delivery of other projects. Large amout of orgaisatioal chage required to deliver desired outcomes ad beefits. Delivery represets a fudametal chage to the orgaisatio. Has ot demostrated key capabilities i deliverig major projects ad/or has ot delivered uder similar arragemets i the past. Cosideratio of the relatioships betwee policy, culture, practices, techology, people, processes ad procedure has ot bee ivestigated, captured or commuicated. 16 Project Iitiatio Routemap Hadbook

17 Sectio 2 Assess Complexity Examples: The two examples below show the cotrast i profiles betwee the outputs of the complexity assessmets carried out o the Trasport for Lodo (TfL) Vauxhall Statio Upgrade Project ad Network Rail s Europea Trai Cotrol System (ETCS) Programme. The Vauxhall Statio Upgrade Project icluded: istallatio of a ew lift shaft, reovatio of the ticket hall ad provisio of additioal ticket gates ad wide-aisle gates. There was good aligmet aroud the complexity profile of the delivery eviromet with the majority of factors ot posig a maagemet challege. However, due to the familiarity of the work type it was cosidered helpful to validate that the busiess as usual approach was effective at dealig with stakeholders ad iterface maagemet. TfL Vauxhall Statio Upgrade Project Factor Strategic importace Stakeholders/Ifluecers Requiremets ad beefit articulatio Stability of overall cotext Fiacial impact ad value for moey Executio complexity (icludig techology) Iterfaces/Relatioships Rage of disciplies ad skills Depedecies Extet of chage Orgaisatioal capability: performace to date Itercoectedess Ratig L/M/H M M L L L/M L L/M L/M L L L L Are the stakeholders beig maaged by those best placed to do so? Whilst project is ot viewed as high capex there is still a eed to esure value for moey. Active maagemet of the iterface with operatios is critical to project acceptace ad hadover. The ETCS programme is the plaed upgrade from the existig rail trackside sigallig system to i-cab sigallig. The overall complexity attributed to the delivery eviromet was agreed as high ad the risks arisig from each of the DECA factors were compared with the programme risk register to help idetify actios to reduce complexity if possible, for example reductio of depedecies or improvig stability through political/ fudig commitmet. Network Rail ETCS Programme Factor Strategic Importace Stakeholders/Ifluecers Requiremets ad beefit articulatio Stability of overall cotext Fiacial impact ad value for moey Executio complexity (icludig techology) Iterfaces/Relatioships Rage of disciplies ad skills Depedecies Extet of chage Orgaisatioal capability: performace to date Itercoectedess Ratig L/M/H H H M/H H H H H H M/H H M/H H The whole idustry is ivolved, every member of the idustry i some way, shape or form as a stakeholder for this because it is fudametally goig to chage the way the railway operates. The cotrol period/regulatory framework is a costrait that stakeholders are strugglig to see beyod. The priorities for deploymet ad executio strategy are ot clear icludig atioal vs route cosideratios. The ature of the orgaisatio eeded to deliver a programme of this magitude has ot bee fully cosidered. 17 Project Iitiatio Routemap Hadbook

18 ess Complexity Same but more complex Same complexity approach Sposor AssComplexity Capability Asset Maager Assess Capability Cliet New to Orgaisatio Procuremet Alig for Success Market Requiremets EhDeliver acemets & Check Orgaisatioal Desig Executio Strategy Pla Ehacemets Goverace Idetify Gaps Sectio 3 Assess Capability I plaig for the AMP6 programme ad the ext evolutio of Alliace, Aglia Water assessed cliet capability as beig appropriate to the challege, but that greater aligmet ad itegratio across the Aglia Water / Alliace iterface would eable further progress. Ay ehacemet to that iterface would improve the traslatio of Aglia Water outcomes ad requiremets through the supply chai. Dale Evas, Alliace, Aglia Water 18 Project Iitiatio Routemap Hadbook

19 Sectio 3 Assess Capability Capability Assessmets What is meat by capability? The Routemap uses capability to describe the ability of the sposor, cliet, asset maager ad market to orgaise for effective ad efficiet delivery of a project. It refers to a part of the busiess ivolved with the project ad ot the idividual, as most barriers to effective practice are rooted i systemic issues ad ot idividual actio. Why assess capability? I additio to uderstadig the complexity of the delivery eviromet it is importat to uderstad the capability of the various parties ivolved, i order to check aligmet (or misaligmet) with the capabilities eeded to deliver a project of the level of complexity beig proposed. This icludes takig a broader view of the market capability that might be eeded to address idetified capability gaps ad the degree to which the respective views of capability are cosistet ad aliged across the various parties. What are the capability assessmets? Each of the assessmets provides a set of observable characteristics that represets the orgaisatioal capability as it applies to the project. These characteristics ca be used to reflect o the curret ad eeded capabilities for successful delivery. The characteristics are grouped ito three sets: Red are idicative of a failig system. Ay idividual red characteristic will hold a orgaisatio back regardless of other good practice, ad either eeds to be addressed or allowaces made for the cosequeces; Gree are see i systems that are performig acceptably. The system may be appropriately govered but ot be fully optimised; Blue are idicative of a effective ad efficiet system that has bee optimised. Not all projects will require systems that have blue characteristics to succeed. Note: These three sets of characteristics should ot be see as a progressive scale. A orgaisatio ca demostrate a mix of all three at ay oe time. The assessmet characteristics have bee shaped by recogised good practice ad are draw from practical experiece of the assessmet of project failure. The capability assessmet results represet sapshots of systemic capability. Gettig value out of the assessmets To maximise the value of the assessmets, you eed to have a appreciatio of the scope ad complexity of the project ad its strategic importace to the busiess. The scope of the project as cotaied i the busiess case, ad the results of the complexity assessmet (DECA), eed to be commuicated to the people takig part i the capability assessmets. Whe assessig, cosider both the characteristics that are curretly observable ad those that are eeded. This should be based o curret uderstadig of what will be required for successful project iitiatio ad delivery. The differeces betwee curret ad eeded characteristics iform thikig about how to arrow the gaps i capability. The aligmet of the sposor, cliet, asset maager ad market capability should also be cosidered. Capability misaligmet betwee orgaisatios ca be a barrier to effective workig ad certai capability combiatios may ot promote efficiet practice. The combied assessmet results feed ito the Complexity-Capability Gap Aalysis as outlied i Sectio Project Iitiatio Routemap Hadbook

20 Sectio 3 Assess Capability Assess Sposor Capability What is meat by sposor? The sposor ows the busiess case ad is resposible for specifyig the requiremets to the cliet. I most cases the sposor also secures the fudig. As ower of the busiess case, the sposor is resposible for esurig strategic aligmet of the project ad achievig the optimum whole life value. They should be the ower of the ivestmet ad overall busiess chage. I some cotexts the sposor ad cliet could be from the same orgaisatio. Purpose To show whether the level of sposor capability is equal to the challege of esurig that the project remais viable ad it is aliged to the strategic objectives of the whole orgaisatio. How to assess sposor capability Review the characteristics i the table opposite ad tick those that you cosider are curretly preset i sposor capability ad those that should be i place. The groups of characteristics i the table opposite are see i sposor orgaisatios that demostrate the followig behaviours. Red: Provides isufficiet directio ad strategic guidace. Owership of beefits are fragmeted ad subject to coflictig sposor/cliet priorities. Immature processes ad systems; Gree: Provides directio ad policy guidace. Demostrates active stakeholder maagemet. Iforms ad works with the cliet to maage strategic risks; Blue: Ivests i strategic plaig. Assured goverace structures ad processes. Udertakes structured evaluatio of requiremets ad sets demadig but realistic efficiecy targets. Actively seeks out best practice ad icorporates ito policy/strategy. How to use the results The assessmet results cotribute to the Complexity-Capability Gap Aalysis. Additioally, the sposor results will help i cosiderig how the capability of the sposor ad the balace of resposibility withi potetial delivery optios will determie the desired capability of the cliet, as illustrated i the Crossrail project example below. Example: Crossrail Sposor capability Throughout the developmet phase of Crossrail, the lack of clear accoutability for key decisios was a achorig characteristic of the sposor capability. This resulted i slow decisio makig ad a lack of the delegated authority eeded to deliver. The formatio of a joit sposor board betwee the Departmet for Trasport ad Trasport for Lodo provided a clear hierarchy for decisio-makig ad was subsequetly uderpied by a Project Developmet Agreemet givig Crossrail staged authority to cofidetly maage the project. 20 Project Iitiatio Routemap Hadbook

21 Sectio 3 Assess Capability Sposor Capability Assessmet Level Curret Needed What sposor characteristics do you recogise? Red Lack of future thikig Stop/start ivestmet ad iflexible fudig cycles Political imperatives compromise good practice Reactive approach Isufficiet plaig Alterative solutios are ot sufficietly cosidered Assessig project i isolatio without referece to overall busiess strategy N/A The stated busiess eed does ot articulate realistic ad justified objectives Projects hadled as discrete etities Focused o processes to the detrimet of outcomes Iappropriate trasfer of risks Lack of clear accoutability for key decisios Suspicious culture Techology viewed as a paacea Work practices compromise delivery Poor strategic awareess of market capacity ad capability Poor developmet ad retetio of sposor capability Gree A accurate ad frequetly validated baselie of beefit measures is maitaied Requiremets ad issues are idetified Sceario plaig Recogitio of the eed for ivestmet i iitiatio/frot ed loadig Robust busiess case The ivestmet case is reviewed before progressig to implemetatio Clarity of accoutability ad authority The right programme of projects is idetified Smart maagemet of the sposor/cliet iterface Active stakeholder egagemet Lessos leared are fed back ito the decisio-makig process Blue Visible ad cosistet support ad owership of the visio Cotiuity of ivestmet Achievability of busiess objectives is validated Clear requiremet defiitio with measurable beefits Effective ad clear decisio-makig processes that challege assumptios Active risk maagemet focused o beefits delivery Adaptive culture established Ivestmet aliged with busiess eeds Leverages/optimises value-addig iterdepedecies Maaged stakeholder support Sufficiet autoomy ad capability to eable delivery ad maage resources Lessos leared ad performace data are systemically captured ad built ito decisio-makig 21 Project Iitiatio Routemap Hadbook

22 Sectio 3 Assess Capability Assess Asset Maager Capability What is meat by asset maager? The asset maager is resposible for day-to-day operatios ad maiteace of the asset. The asset maager may be a part of the sposor or cliet orgaisatios or a separate etity. Similarly the operator ad maitaier of the assets might be separate etities. Effective asset maagemet takes a systemic, orgaisatioal view of assets as eablers of the strategic goals of the orgaisatio. Purpose To highlight key operatioal costraits ad/or requiremets that will eed to be addressed i the project. How to assess asset maagemet capability Review the characteristics i the table opposite ad idetify those that you cosider are curretly preset i asset maagemet ad those that are cosidered ecessary for the project to succeed. Cosideratio of the project s impact o existig assets ad maiteace routies is as relevat as cosiderig how ew assets will be adopted ad owed. The groups of characteristics i the table opposite are see i asset maagig orgaisatios that demostrate the followig behaviours; Red: Owership of assets is fragmeted ad subject to coflictig sposor/cliet priorities. Immature processes ad systems. No lik to strategic goals; Gree: Clear lie of sight to strategic goals ad policy. Clear resposibility for assets. Maagemet of strategic risks; Blue: Ivests i strategic plaig. Assured goverace structures ad processes. Udertakes structured evaluatio of asset performace ad sets demadig but realistic efficiecy targets. Actively seeks out best practice ad icorporates ito policy/strategy. How to use the results The assessmet results cotribute to the Complexity-Capability Gap Aalysis by providig isights to the wider operatioal ad maiteace cotext, ito which the project will ultimately deliver its outputs. This is illustrated i the example below. Example: Surrey Couty Coucil asset maagemet Surrey Couty Coucil Strategic Highways idetified that there was potetial to ulock efficiecy ad iovatio savigs through a ew approach to asset maagemet ad the provisio of a exteded fudig horizo. They used the Asset Maager Capability Assessmet to assess their curret capability ad were able to build the case for chage by highlightig barriers to effective practice, such as the ivestmet asset strategy ot beig aliged to the orgaisatios strategic objectives. 22 Project Iitiatio Routemap Hadbook

23 Sectio 3 Assess Capability Asset Maager Capability Assessmet Level Curret Needed What asset maagemet characteristics do you recogise? Red Iadequate whole life asset maagemet approach The ivestmet asset strategy is ot aliged to the orgaisatios strategic objectives Poor decisio makig, goverace structures ad processes udermie asset strategy Reactive maagemet ad/or ill-defied roles ad resposibilities Lack of resiliece Uecessary use of bespoke solutios Not based o a whole life value for moey propositio N/A No strategic egagemet with the operators ad/or supply chai Iappropriate, chagig or o data No ivestmet i capability developmet Iappropriate trasfer of risks Lack of clear accoutability for key decisios Suspicious culture Techology viewed as a paacea Work practices compromise delivery Poor strategic awareess of market capacity ad capability Poor developmet ad retetio of sposor capability Gree Whole life asset strategy Optimised asset groupig Asset performace measuremet Plaed asset resiliece Formalised whole life asset maagemet processes, fuctios ad roles Pla for operatioal readiess Active stakeholder egagemet Competecy assessmet ad developmet framework is utilised Data usage ad iformatio maagemet Blue Itelliget use of assets aliged to orgaisatioal goals Cotiuity of performace through asset life Effective goverace, leadership ad chage maagemet Ivestmet efficiecy ad performace measuremet Systemic orgaisatioal view of assets Effective operatioal readiess strategy i place Assured capability Itelliget data usage ad kowledge maagemet 23 Project Iitiatio Routemap Hadbook

24 Sectio 3 Assess Capability Assess Cliet Capability What is meat by cliet? The cliet is resposible for fulfillig the requiremets ad deliverig the beefits. The cliet traslates the requiremets from the sposor ad maages the delivery outcomes. The cliet selects the most appropriate supplier/s to meet project objectives. Fudametal to this is the ability to maage relatioships with suppliers i order to maximise the delivered value. The Routemap is cosistet with the priciples of the Istitutio of Civil Egieer s characteristics of a Itelliget Cliet as follows: A itelliget cliet should uderstad ad defie the eeds of the project; defie its requiremets fully; select the cotractor competitively ad fairly ad reward through icetivised cotracts; support the cotractor ad eforce the cotract fairly; brig projects together to make the whole programme ad commissio the projects ad measure their effectiveess. Purpose To ivestigate whether or ot the cliet is capable of avigatig the rage of potetial Delivery Models ad deliverig the complexity of the project. How to assess cliet capability Review the characteristics i the table opposite ad tick those that you cosider are curretly preset i cliet capability ad those that should be i place. The groups of characteristics i the table opposite are see i cliet orgaisatios that demostrate the followig behaviours. Red: The delivery eviromet is ot stable. It has a urealistic or o formal pla. Immature processes ad systems. No evaluatio of impact or performace; Gree: Orgaised ad coheret. Provides directio ad policy guidace. Repeatable cotrol methodology ad evaluatio but focused o objectives rather tha outcomes. Processes are evaluated but ot improved; Blue: Capable of specifyig the requiremets to exteral participats ad maagig the delivery outcomes. Obtais maximum value from the supply chai through relatioship maagemet. Adaptive ad sustaied system focused o learig ad cotiuous improvemet. How to use the results The assessmet results cotribute to the Complexity-Capability Gap Aalysis. They help idetify orgaisatioal developmet eeds, as was foud by Trasport for Lodo i the example below. Additioally, the cliet results will help i cosiderig how the capability of the cliet ad the balace of resposibility withi potetial delivery optios will determie the desired capability of the support required from the market. Example: TfL Cliet capability Trasport for Lodo s (TfL) Statio Stabilisatio Programme aimed to develop a delivery eviromet capable of realisig greater efficiecies by brigig specific delivery capabilities i house. For busiess as usual, TfL demostrated gree capability, but eeded blue capability to support this ew way of workig ad achieve the expected beefits. It was idetified that this would require more plaig for the trasitio to ehaced capability, thus impactig the overall programme of delivery. However, ot allowig sufficiet time to acquire or develop the required capability usually results i poor value from later stages. 24 Project Iitiatio Routemap Hadbook

25 Sectio 3 Assess Capability Cliet Capability Assessmet Level Curret Needed What cliet characteristics do you recogise? Red Lack of clarity ad directio causig icomplete or uclear requiremets Blurred goverace structures Poor risk ad cotigecy maagemet Applicatio of uecessary stadards N/A Uecessarily bespoke solutios Competitive processes do ot result i desired outcomes Highly risk averse approach regardless of market capability Does ot adapt or chage behaviour to the circumstaces Does ot icetivise ivestmet withi the supply chai No ivestmet i the developmet of cliet orgaisatio capability Gree Kows what is eeded ad prioritises accordigly Establishes project purpose, priciples, roles ad tasks before the detail Traslates sposor requiremets ito clear fuctioal/techical requiremets Costructively challeges chages from sposor Challeges specialist requiremets Establishes appropriate measuremets, metrics ad targets for success Bechmarks cost ad performace ad applies idustry comparators as appropriate Implemets appropriate busiess processes ad uderstads their beefits Ivests i iformatio maagemet Balaces risk ad reward appropriately with the supply chai Cosistet behaviours towards others Makes timely decisios Goverace arragemets provide clear accoutability to sposorig orgaisatio Blue Cosiders log term efficiecy before short term commercial gai Objectively challeges the requiremets ad cost estimates Uderstads ad applies whole life cost ad carbo reductio priciples Effectively bridges iterfaces betwee orgaisatios Esures project eeds supersede idividual stakeholder demads Risk ad reward deliver optimum outcome Makes iformed use of competitio Advocates o behalf of the team a o blame culture Adopts lea priciples ad cocepts Cotiuous capability ad capacity ehacemet Strategic awareess of market appetite, capacity ad capability 25 Project Iitiatio Routemap Hadbook

26 Sectio 3 Assess Capability Assess Market Capability What is meat by market? A market is a group of orgaisatios that itegrates ad competes to provide goods or services to oe or more cliets. The costructio ad ifrastructure market is ofte characterised by a large umber of suppliers ad SMEs. This fragmetatio of the market meas this sector is ofte less resposive to chage ad iovatio. Market capability assessmet looks at the broader idustry/sector capacity or capability requiremets over the life of the asset. Early egagemet with the market is always ecouraged. Purpose To uderstad, pla ad cofirm what the market capability ad appetite is for the project. If either capability ad/or appetite are isufficiet, idetify what developmet might be required. This icludes support from cosultats, delivery parters, cotractors ad suppliers. Aligmet of market capability to the demads of the project ad to complemet the capability of the cliet is fudametal for a successful workig relatioship ad project success. It is the resposibility of the sposor ad cliet to work strategically with the market to uderstad ad verify what ca realistically be achieved. If a sposor ad/or cliet requires or wishes to egeder differet outcomes the they must pla for ad verify how the market will be ehaced. For example, by buildig the capability i the market (recogisig that this may take time), or lookig to aother market to fulfil the eeds or chagig the project approach. How to assess market capability Review the characteristics i the table ad tick those that you cosider are curretly preset i the market s capability ad those that should be i place. The groups of characteristics i the table opposite are see i markets that demostrate the followig behaviours. Red: The market has isufficiet capacity or capability to meet the project s eeds or has istabilities that are likely to be detrimetal to the project s success; Gree: The market has sufficiet capacity ad capability to support the project s eeds, or has viable plas to ehace ay shortfall; Blue: The market is mature yet iovative ad is likely to deliver efficiecies i additio to meetig the project s eeds. Where there is a established supply chai the Alig for Success Procuremet module provides a similar approach to assessig supplier capability. How to use the results The assessmet results cotribute to the Complexity-Capability Gap Aalysis. Where there are market capability gaps the Alig for Success module o Procuremet ca help with: ay issues idetified e.g. where the project requires more from the market tha it is curretly capable of providig; ay misaligmet issues betwee cliet capability ad market capability. Note: there might be circumstaces that require a sposor or cliet to egage with the market while still i a vulerable state regardig their ow capability; capability assessmets of specific supplier orgaisatios. Example: Network Rail market buildig Network Rail opeed a ew dialogue with their supply chai i 2011 about a collaborative approach to drivig idustry chage. Time ad effort was required to reach the curret level of maturity ad the key was focusig o brigig tagible chage across the whole supply chai; from faster paymet, removal of retetios, adoptio of BS11000 & the creatio of alliaces. With each step Network Rail ad their supply chai collectively proved that they could make a differece ad brig a ew commercial dyamic to the Rail sector. 26 Project Iitiatio Routemap Hadbook

27 Sectio 3 Assess Capability Market Capability Assessmet Level Curret Needed What market characteristics do you recogise? Red The market comprises may small idividual orgaisatios workig for multiple cliets Oe party teds to dictate the relatioship (e.g. cliet or supplier domiates) Work is ormally awarded based o lowest price Little iteractio betwee suppliers prior to cotract awards N/A No collective uderstadig of market s capacity to deliver Suppliers do ot uderstad the cliet busiess ad therefore caot offer busiess orieted solutios Roles ad resposibilities across the supply chai are hierarchical with each sub-let beig dictated by the lettig supplier s teder Desig teds to be a discrete activity completed before implemetatio suppliers are ivited to teder Icosistet performace resultig i ufulfilled outcomes Gree The market works closely together up ad dow the tiers of the supply chai Cliets maage suppliers strategically but ecourage iteractio ad cotributio Agreemets betwee suppliers ad/or customers eable log-term ivestmet i performace improvemet The mai players ivolved i projects focus o deliverig project goals Suppliers uderstad the cliet busiess ad offer busiess orieted solutios to mutual beefit eablig more effective icetivisatio Cliet team work o a itegrated basis with some key suppliers Desig is iterative ad ivolves parties cocerig istallatio, operatios ad maiteace (whole life approaches) The market collaborates to fid ways of gettig more beefit for the same cost, thus addig value Suppliers form multi-skilled joit vetures ad cosortia for specific projects Geerally time, cost ad quality requiremets are met Performace across the supply chai is measured, uderstood, commuicated ad acted upo Blue The whole idustry is itercoected ad those itercoectios are uderstood ad maximised Suppliers brig forward supply chai parters they feel will add the most value to successful delivery Orgaisatios regularly participate i repeat activity where may parters at all levels move from project to project ad/or customer to customer Orgaisatios uderstad the importace of esurig that all parts of the chai uderstad the goals of the project ad the philosophy beig adopted Structure ad orgaisatio o projects is agreed by the collaborative itegrated project team There is a market focus o removig uecessary duplicatio ad wastage, thus addig value There is log term ivestmet to buildig market capability (e.g. research, developmet, facilities) Established ad log-term joit vetures ad ew compaies formed to offer itegrated solutios 27 Project Iitiatio Routemap Hadbook