How to measure the benefits realization for your strategic and CAPEX intensive initiatives

postet by:
Dr. Said Oualibouch
August 17, 2020

ocusing on Strategic Business Goals Achievement

All businesses are undertaking large initiatives and executing programs such as digital transformation, migration to cloud, virtualization,AI strategy for example. They aim to leverage new technology trends that enable them to increase their market potential, reduce their operational costs and deliver an excellent customer experience. These strategic initiatives are mostly new/innovative and often aren’t accompanied with matured procedures, blueprints, rules and measurable success criteria. Assuring that the chosen strategy is on the courseto success becomes remarkably difficult.

One of the main apsects to embrace the multitude of changes, variety of goals and achievement aspects is to make sure that the business objectives and expected value contribution are not only properly defined and quantified, but also followed, monitored and controlled in a robust, comprehensible and inclusive way.

The most unobtrusive way to achieve that is a robust and consistent methodology that should be applied, which ensures that the expected benefit is being realized by the work done and also within impact of the solution and readiness of existing business landscape of the organization. The methodology should ease both the proper definition of business outcomes of the project/operations and possibility of controlling and at every moment.

While stakeholders and implementation teams concentrate on goals and on achieving them in an optimal way, their actual goals may differ frominitial project plan, business case, assumptions and calculations and change dynamically within the implementation/operating effort. The methodology should embrace this aspect as well.

The methodology presented below aim is to assure that the targets are properly and exhaustively defined, followed, monitored, assessed and corrected. The methodology takes into consideration not only directfactors influencing the preparation and realization of projects orstrategic objectives but also all the context of the company,existing structure, teams and related projects. The Business Success Criteria Management offers a consistent policy to handle the above-mentioned challenges in an organized approach, engaging all interested parties into one orchestrated effort.

The Business Success Criteria Management methodology is composed of several stages and tastes within execution but the main and the most important effort lays in the definition and preparation stage which could be broken down into the following aspects:

Agreementon Benefit/Success Criteria

As the starting point to the realization of Business Success Criteria Management is a comprehensive definition mutually discussed and agreed among stakeholders on what exactly is going to be achieved. It goes way beyond success criteria defined within project plan, scope,risk and quality management. It is the time to reveal real meaning behind “success”, “optimization”, “transformation”,“improvement” etc.

It starts with definition and parametrization on how exactly the success/benefit should look like, what form and when the business value should be realized. The alignment discussion is focused either within proposed best practices or a definition crested ad hoc with stakeholders and implementation group. It has to be established how to translate strategic, financial and contractual terms to real world business success criteria. Common understanding is necessary on what is and what isn't the on the success path.

Definition, Scope and Achievement of Business Target

Next stage in the methodology is to dig deeper in details and define domains, where this success should occur and how it can be quantified. The owners and functional roles that are critical to the achievement of the goals need to be defined and populated.

As a result of this phase a document is created containing exact description of success and business objectives for any internal project, transformation effort, optimization of resources and benefits, company periodic targets. Within the document the description of success and benefit areas will contain both evaluation of results and systematic monitoring with timely correction of the course towards the success.

Alignment on implementation strategy and tooling required

During next stage the characterisation of fine details of success elements,identification of factors, measures, KPIs and components decisive for the achievement of objectives as well as numeric values expected at the end of measurement period is performed and agreed. Parallelly the way the objectives are to be achieved and their impact on the existing and future company landscape are established and aligned within working team/stakeholders.

Implementation of the Success Path Criteria Management

Once the engaged parties are aligned on the contents and way of the achievement of targets, the execution phase can begin. During the execution stage the defined and agreed elements of measurement are implemented, measured and results are delivered to all interested parties. On very important part of implementation is monitoring of the outcomes, interpretation and in case of observed deviation, root cause analysis and correction.

Evaluation of the Results

When the measurement and monitoring stage is completed, the last part ofthe methodology is the assessment of the outcomes and a final score to the measurement and success quantification effort. Additionally,at this moment it should also be agreed upon next steps and potential reuse of the resources, mythologies, measures and tools.

Building Blocks of BSCM

As introduced above the Business Success Criteria Management can be broken down to the following phases:

  • Preparation Phase - with objective of exposing all participants to methodology and focus on all components of the measurement and assessment effort;
  • Implementation Phase - with objective to implement the measurement with existing and new resources;
  • Monitoring Phase - with objective to monitor, update and correct impacting factors and fine tune the measures;
  • Assessment Phase - with objective to evaluate final achievements and take reasoned decision on next steps.
  • Resources – with

              * set of KPIs and business rules either pre-defined or defined withing working team;

              * business outcomes templates – collection of best-practices and predefined definition criteria;

              * criteria for software and tools that can be applied for the needs of the BSCM;

              * charts and dashboards templates for data visualization.

In-Depth Methodology Description

Business Success Criteria Management methodology introduces the process bywhich the strategic goals defined for the overall are manged throughdefined business metrics (KPIs) and deviation control tools.

  1. Preparation - Definition and Alignment Phase
    As mentioned above - the first phase concentrates on onboarding of all stakeholders and participants on the detailed definition of success achievement, target values as well as definition of all basic criteria as precise as possible for the further realization.

The following aspects are to be discussed, defined and aligned:

  • Detailed validation of target - feasibility check within existing context;
  • Preparation of benefit areas - definition of impacted areas and prioritization of benefits;
  • Appointment of main stakeholders, participants and audience - defining not only names but also contact channels and frequency of communication;
  • Definition of business values and target amounts - definition not only the numeric values of parametrized benefits but also mathematic formulas for the measurements;
  • Definition of data sources and owners - identification of data sources, data owners and details related to data extraction, collection and processing;
  • Definition of scope and format for of reporting - further definition of periodicity, feasibility of the reporting on results;
  • Definition of tools needed - the definition and validation of systems and tools used for the measurement;
  • Deliverables - their scope, usage and audience - the type and contents of the procedure documentation;
  • Agreement on acceptance and achievement - alignment with all engaged parties on final benefit achievement and form of achievement validation.

  1. Execution - Implementation Phase
    The execution phase may be realized as a cascade or in an agile way, including periodical assessment reports for possible course correction and comprises the following:

             * Workshops and fact finding with owners and participants - the scope is defined through variable communication channels with engaged parties;

             * Data collection and processing - effort concentrates on data, their timely delivery, quality assurance and consistency check, as well as optimization and standardization of all collected information;

             * Contacting data owners and integrators - involvement of all participants and solution suppliers into the project as well as coordination of their efforts and delivery schedule;

              * Definition of KPIs and reporting scope - application of data to key performance indicators and delimitation of the scope;

              * Creation of dashboard - preparation of data visualization and level of details for each audience group.

           3.        Control and Correction - Monitoring Phase
               When all components are aligned and set, in the Monitoring Phase the results of the measurements are collected, assessed and results are reported to the Stakeholders. In case of deviations from Success Criteria achievement path, the correction, remedy and update steps are executed.

               * Scope and access to dashboards - the dashboard for data visualization are defined, aligned and implemented;

               * Evaluation of results - the results of measurements are analysed for possible deviations from agreed values and acceptable margins;

               * Evaluation on trends and deviations - long term analysis is performed for the correction of course for the future possible

               * Update to the data and fine tuning of the results - in case of significant deviations, the problem management is implemented, composed of following elements:

                       Problem - root cause analysis

                       Problem - data corrections

                       Problem - output updates

                       Enhancement to scope, data and outputs

  1. Evaluation and Achievement - Assessment Phase
    At the end of agreed period, upon the achievement of forecasted goals, the Business Success Criteria Management roll-out is analysed and the results assessed. Also, as the conclusion of the activity is achieved, further steps must be decided. The following components belong to this phase of a project:

            * Reporting on achievement - the concept and procedure for acceptance, the decision points with other reporting characteristics like frequency, quality criteria, format, output tools and areas

            * Evaluation of Deliverables - the deliverables, not only documentation but also, trouble ticketing systems for reporting of deviations, reports etc are examined and completed with results and lessons learnt information;

            * Further steps - at the end of the project it has to be decided what should happen with existing measurements, reporting and dashboards, how much they can be reused, how many are not relevant and how many can be used as components for further analysis and another projects.

Delivery Management

The Business Success Criteria Management can be implemented using various delivery methodologies either cascade, agile or in conformity of the current implementation, company policies and change governance.Depending on the scope and impact of the solution, the scope,staffing, tooling and implementation details can be flexibly adapted to the success criteria defined during Preparation Stage. A BSCM project can be extended from a couple of months to several years with activities organized within continuous delivery when necessary.

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