Identifying where the real value is and where the focus needs to be

The Client's Challenge

The IT Department of the TAB was trying to justify the development and installation of a new project management methodology and supporting PPM tools.

The new CIO recognized that this would need to be justified in terms of the improvement in project performance and the standard business case approach did not support this type of justification.

Scope

The end-to-end project delivery processes.

All five TAB divisions across Australia.

Approach

A team of CIOs, project managers and PMO managers from across the five divisions was assembled to work through the TOP Business Case generation process. A series of three workshops was conducted over four weeks to:

• identify the desired business outcomes, benefits and risks
• identify the workload, costs and critical success factors
• agree the financials, approach and priorities
• assemble and agree the final business case.

The Results

• This process defined 12 ‘desired business outcomes’ that described how the end-to-end project delivery processes would work when they were working ‘just right’

• Identified that most of the value was available only when the executive and investment governance processes were fully implemented

• Quantified that just implementing a project management methodology and toolset (the original plan) was not cost-effective and would have only marginal impact on project performance

• Identified that the five divisions had very different views as to how to manage projects, the roles of IT, the project manager and the business; and that some common ground would need to be established before progress could be made in this area (a dimension not previously considered)

• Identified portfolio and investment management plus project governance as the priorities so as to gain control of project scopes and budgets that were found to be poorly managed – but when managed effectively would (through the avoided losses) more than pay of the whole investment.

The Payoff

During the course of the assignment the client did an analysis of actual project performance vis-à-vis approved budgets and potential returns and found a net loss of over 70% of the annual investment budget. This was ten times more than was believed to be the case.

The Investment Committee moved from ‘allocating capital’ to managing the project investment portfolio – with an immediate improvement in results

While work was commenced on a project management methodology, the main emphasis was on executive education and support as the savings here justified the costs involved with implementing project delivery the toolset.