NSW Government ICT Benefits Realisation and Project Management Guidance

Transcription

1 NSW Government ICT Benefits Realisation and Project Management Guidance November 2014

2 CONTENTS 1. Introduction 1 2. Document purpose 1 3. Benefits realisation 1 4. Project management 4 5. Document control 7

3 1. INTRODUCTION The NSW Government ICT Investment Policy and Guidelines (Policy) assists agencies to embed the NSW Government ICT Strategy in investment decisions. While the Policy establishes a collaborative approach to ICT investment across government, it also recognises that agencies are responsible for their own investments. The Portfolio governance role of the ICT Board 1 sets out six key responsibilities, one of which is to ensure that approaches to benefits realisation and project management support cost effective investment in ICT. 2. DOCUMENT PURPOSE This guidance provides agencies with information on approaches to benefits realisation that will support cost effective investment in ICT. It is consistent with Treasury policy paper TPP08-05 Guidelines for Capital Business Cases, which requires agencies to develop a Benefits Realisation Strategy as part of the business case and gateway process. This guidance also outlines best practice principles and concepts in benefits realisation and project management as they apply to ICT investments. It references the NSW Government Benefits Realisation Management Framework which is available at Agencies are encouraged to adopt and tailor, where appropriate, to meet the unique conditions of their ICT investments, recognised benefits realisation and project management methodologies to optimise their use and value. This guidance is provided on the basis that agencies are responsible for the planning, delivery and management of their own ICT investments. It provides a structured approach for agencies to manage and demonstrate the realisation of benefits from business change programs. It helps practitioners show the linkage between investment and government policy priorities, agency business objectives and service delivery outcomes. 3. BENEFITS REALISATION The NSW Government Benefits Realisation Management Framework (June 2014) 2 applies to NSW Government ICT investments. Effective benefits realisation is a critical factor in achieving the expected business outcomes from ICT investments. Benefits realisation is an important consideration in the development of business cases and informs portfolio management, governance and decision making by the NSW Government. The purpose of the Benefits Realisation Framework is to provide: best practice principles drawn from latest experiences and proven practice in setting up and managing programs across NSW agencies standardised approaches to benefits realisation management for program directors and managers, change managers, project managers, business analysts and program management office staff 1 Portfolio governance role of the ICT Board, 14 May

4 consistent terminology and benefits categorisation introduction and guidance for program sponsors and business leaders. Planning for the realisation of benefits commences at the earliest stage of the project life cycle, as benefits may rely on the strategic use of deliverables to change the way business processes are run. Benefits realisation is an integral part of each stage of the ICT investment. 3.1 Principles ICT-enabled business change programs represent a large portion of government expenditure. Benefits realisation principles support a comprehensive approach to ICT investment planning and provide opportunities for improved government performance through more sustainable, consistent and standardised solutions. The following benefits realisation principles support agencies to achieve better value from investments in ICT. Benefits Realisation Principles Scoping Benefits management starts by defining objectives and the benefits they deliver Identifying and understanding benefits refines the business case Intermediate outcomes are needed to realise end benefits, and are just as important Development Benefits Realisation Management needs to integrate with an organisation s financial, program and change management strategies Benefits are enabled by successful change people, process, technology and organisational Benefits need to be owned and managed by a designated person within the business Benefits need to be communicated Measurement and analysis Benefits must be measurable and linked to performance data and reporting frameworks Benefits realisation requires a baseline and benefit targets in order to measure resulting outcomes Disbenefits need to be recognised and mitigated Benefits can be tangible (financial or non-financial) or intangible, e.g. improvements in quality, efficiency, access, and financial performance The same benefits cannot be claimed by two or more projects Monitoring and evaluation Benefits are not automatically realised; active monitoring is required Benefits are dynamic; they need to be regularly reviewed and updated Benefits tracking continues after a program/ project is completed 2

5 3.2 Process Benefits realisation can be divided into four phases: 1. Understand: define vision, objectives and potential benefits ensuring alignment with strategic drivers 2. Plan: prioritise the benefits and business change required to determine a plan for achieving the objectives 3. Manage and Report: measure, analyse and understand the program outcomes to proactively support the delivery of benefits 4. Evaluate: identify learnings from program activities to inform strategic decisions and priorities. Understand Evaluate Plan Manage and Report Figure 1: Benefits realisation process Agencies are encouraged to ensure each phase has clearly articulated tasks and deliverables. Whilst the specific details will change to meet the needs to the investment, below is some generic guidance: Tasks Articulate the vision Identify key stakeholders Map and estimate scale of benefits Develop benefits profiles Update baseline data Review benefits register Handover benefits reporting and measurements to BAU team Deliverables Business case Benefits realisation strategy First draft benefits register Benefits reporting format Periodic reports on benefit performance Updated benefits register Lessons learnt and post-implementation report 3

6 Conduct post-implementation review Capture lessons to inform continuous improvement Tailored benefits tools and templates Business case variation report 3.3 Evaluation Well planned and executed evaluation provides evidence of the efficiency and/or effectiveness of a project. Evaluation reports achievement against set targets and enables agencies to identify learnings and corrective actions required, and quantify outcomes from project activities to inform strategic decisions and priorities. Evaluation should ideally take place across the lifecycle of a program/project, from design and piloting through to implementation. It should not be seen as post-program/project activity only. It is a continuous process that commences as soon as business change starts to be delivered. The focus early in the program/project life will be on reporting progress in achieving intermediary outcomes of the program/project, e.g. new capabilities successfully delivered, change outcomes achieved, etc. In the post implementation phase, (reporting should continue beyond program closure) the focus is on the achievement of the desired business and strategic benefits. This phase answers the following key questions: Has the transition to BAU been managed? Have benefits been optimised with all key stakeholders? Has progress towards the vision/end state been reported against? Have lessons learnt been captured and communicated? Key principles that underpin the conduct of good evaluations include: evaluation should be built into program/project design evaluations should be methodologically rigorous with appropriate scale and design evaluations should be conducted with the right mix of expertise and independence evaluations should be timely to support and influence decision making evaluation processes should be transparent and open to scrutiny. A whole of government approach to evaluation can be found in the NSW Government Evaluation Framework It is recommended agencies consult this document to gain a more complete understanding of the evaluation needs and appropriate frameworks. 4. PROJECT MANAGEMENT ISO 21500:2012(E) - Guidance on project management defines project management as the application of methods, tools, techniques and competencies to a project, and includes the integration of the various phases of the project life cycle. Project management is the process used to enable the delivery of a project on time, within budget, according to specification and at a quality that meets professional standards and management expectations. It involves a different set of issues and skill set to the management of daily agency operations. A project is normally less predictable, more subject to change and has a longer planning horizon than the delivery of daily ICT services. 4

7 The purpose of the guidance below is to provide direction in the management of ICT projects, describing what agencies should expect from a project and addressing key considerations. This guidance applies throughout the life cycle of all projects regardless of their size or complexity. The life cycle of a project starts from the development of a concept for investment in ICT, and concludes with a post implementation review to assess whether the expected business benefits were realised. 4.1 Characteristics of successful projects To be successful, a project should have: Clearly defined business objective(s): business objectives should be understood and defined in the project's business case and expected, measurable benefits specified Well-defined and agreed scope: project scope includes what the project will do and won t do ; an agreed and well-defined project scope sets realistic expectations and provides a framework for project delivery and benefits realisation Partnership approach: a project is a partnership between the business unit that requests the project and the ICT staff assigned to the project, and should be considered to be a business initiative with an element of ICT rather than an ICT initiative that supports the business Project Sponsor: ownership and accountability for a project rests with the Project Sponsor, who is the owner and champion of the project and should be the individual with the greatest stake in the outcome of the project Support of senior management: role of senior management on a project will vary according to its scale and complexity, but senior management would normally monitor progress of projects that are critical to agency operation or which require significant levels of investment Stakeholder management and communications: this includes identifying stakeholders, their impact on the project and giving appropriate understanding and attention to their needs and expectations Project controls: pro-active and effective project control throughout all stages of the project ensures the success of a project; controls include project plans, risk and issues management, change management and quality control Regular progress reporting: reports on a project s progress should be available for senior management and other interested parties, on a regular basis and in a format consistent across the agency Benefits realisation: Planning and organising for the delivery of benefits must start as early as possible in the project life cycle, through a benefits realisation approach as discussed above. 5

8 4.2 Key considerations Development approach A project's level of risk will typically grow as the degree of customisation increases. Off-the-shelf solutions should be selected unless a compelling argument exists for development of new services. Phased or modular implementation Given the current rate of technological change and the potential rate at which an agency's business environment can change, it is not advisable to initiate a large scale project that runs for multiple years and has one major deliverable. Large projects should be undertaken on a phased or modular basis, with manageable deliverables at the conclusion of each phase or module. The business objectives of a project with an extended duration should be regularly reviewed and formally reconfirmed with the project's sponsor. If internal or external influences make it clear that a project will not meet its business objectives, or if it becomes apparent that a project will significantly exceed its time or cost estimates, it is the responsibility of senior management to reassess the project. The business case for any project will need to be reviewed and revised by its sponsor. If insufficient justification is found for the project to continue, it should be stopped. User participation Successful projects typically have high levels of user participation through measures such as membership of the project team or user focus groups. Clear roles and responsibilities Projects must have a well-defined structure with the roles and responsibilities of all participants clearly documented. In particular, the project's sponsor must be identified and this individual must assume ownership of, and ultimate accountability for, the project. Competent project team It is essential that appropriate resources are assigned to, and retained by, a project throughout its life cycle. Factors such as skills and expertise are to be taken into consideration in organising a project team. Use of a project management methodology does not guarantee that a project will be well managed. The methodology must be applied by skilled and experienced project managers and the project team members must be adequately trained in its use. Agencies may choose to employ external resources to complete a project successfully, including project management resources. If this occurs, the agency must retain overall responsibility for and control over the project. 4.3 Project risk management AS/NZS ISO 31000: Risk Management Principles and Guidelines defines risk as the effect of uncertainty on objectives, where an effect is the deviation from what is expected. All projects have some level of risk and while many risks cannot be eliminated, they can be managed and reduced. Project risk management is a continuous process that begins as part of 6

9 management planning and continues to be reviewed and monitored throughout the project to reduce risks to a manageable level. AS/NZS ISO identifies seven elements in the risk management process: Communication and consultation: exchanging information about risk management with internal and external stakeholders Establishing the context: defining the internal and external parameters to be considered when managing risk and setting the scope of an agency s risk management process Risk identification: finding, recognising and describing risks; initial project risks are identified through assessment of the project objectives and anticipated implementation approach Risk analysis: understanding the nature and level of risks so decisions can be made about whether a risk needs to be treated; at the start of each project phase, the specific risks associated with that phase are identified and risk profiles of similar projects are reviewed Risk evaluation: deciding which risks require further treatment by comparing against established risk criteria, and in what order; an impact analysis of the risks is performed to determine the relative exposure of the risk in terms of time and cost Risk treatment: identifying, selecting and implementing responses to risks that fall outside the levels an agency is prepared to accept or tolerate; two types of management actions may be adopted, (i) preventive action where the project environment is modified to minimise the identified risk, and (ii) contingency action which provides a buffer that will be available to address an unanticipated event Monitoring and review: continually checking that each component of the risk management process is performing as desired. The NSW Treasury s Risk Management Toolkit for the NSW Public Sector (TPP12-03) provides detailed guidance. 5. DOCUMENT CONTROL Document history Date Version Description Author November Approved Office of Finance and Services Contact: Ray Evans, Director, Strategic Policy, Office of Finance and Services ray.evans@finance.nsw.gov.au Telephone: (02)