The Implementation of BPR Pertemuan 9

Matakuliah : M0734-Business Process ReengineringTahun : 2010

Monitor and BenefitRealization Phase

Monitor and Benefit Realization Phase :Why ?How ?Critical Success FactorsOutputsRisks

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Why ?

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Projects are not finished after it has successfully gone live and the users are happy

Often there’s a transition period, where operational costs actually increase after deployment and then the benefits start to be realized and the operational costs decrease

“If it is discovered during a project that the expected business value cannot be realized, or has gone away, the project should be stopped. If the business case is maintained and updated throughout the project (at each phase), this will become apparent”

Many business change projects fail to deliver the benefits on which the investment was originally justified. An estimated 30 – 40 percent of systems to support business change deliver no benefits whatsoever

(www.ogc.gov.uk, 2005)

How ?

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Step 1 : Benefits Management Framework – Foundation Phases

Establish a framework to manage project business benefits to approach target, measure and realize them

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• How the organization identifies benefits and links them to the organization foundation

• How the organization identifies and measures benefits• Benefit roles, responsibility and ownership• Benefit planning procedures – milestones/benefits network matrices,

delivery, assessment and review points, dependencies, risks, business impact• What, when, by whom• How to deal with unplanned benefits• Identification of dis-benefits• Baselining – responsibility, how, who signs off on it• Benefits Realization Register – what is the benefit? How much? Who is

accountable for delivery? When? Where will it impact business?

• Lessons learned• Benefits realized• Benefits not realized

Regular benefits management meetings

Step 2 : Potential Benefits and Plan – BPM Foundation Phases

Use Benefits Realization Register to record details about

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• The benefit• Who is responsible for the delivery (realization) of the benefits• The expected value• When the benefit will start to accrue and end• Any dependencies and risks associated with the benefit

Document and plan for the management of benefits to be monitored throughout the life of the project, so they can be compared against the business case

Prepare a comprehensive plan of action and register of benefits

Have the plan accepted by the responsible business manager (benefit owners) and approved by the project sponsor

Step 2 : Potential Benefits and Plan – BPM Foundation Phases

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Benefit Summary Plan

Step 3 : Baseline and Comparative Measurement – Elaboration Phase

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Collect metrics during the Elaboration Phase, use these metrics as Baseline

Ensure the baseline is solid and it is aligned with the business case

Step 4 : Refine and Optimize – Improvement Phases

Have metrics calculated for new redesigned processes to estimate the impacts on increased process efficiencies

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Compare the new Improvement phase metrics with the baseline, select and finalize the improvement option that yields maximum benefits with minimum costs

Benefit Milestone Matrix

Step 5 : Benefit Details – People and Technology Development & Deployment

Phases

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Monitoring of progress against benefits realization milestones should be an integral part of project reporting, and incorporated as a segment in the regular reports to the project sponsor and Project Steering Committee

Benefit Delivery Matrix

Step 6 : Benefits Delivery and Monitoring – Monitoring and Benefit Realization

Phase

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Benefits owner needs to make sure that

Once benefits are realized, obtain a formal sign-off, put them in the register and ‘tell people’ (celebrate!)

• All activities identified in the benefits summary plan are realized• The appropriate control structures necessary for benefits realization

are in place

Step 7 : Value Maximization – Continuous Improvement Phase

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Full report on achievement of benefits will record benefits which were fully achieved or benefits that failed to reach targets. These reports need to be followed up with the responsible managers to validate findings and identify areas for remedial action

Post implementation reviews to check that the benefits are being realized and continue to be realized

Organization should be confident that it has achieved the maximum possible benefit from the BPM investment, if it’s not, there should be at least and understanding of the causes and plan for future remedies

Step 8 : Project Result

Compare initial business case with actual project results/outcomes

• How much faster the processes are executed• By how much errors, rework and backlogs have been reduced• How efficient the processes being performed are• How much customer satisfaction has improved• How much employee satisfaction has improved• The overall cost-benefit analysis for this project• Whether the benefits have started to flow as expected

Comparison determines:

• To make the necessary change to the current environment to correct any shortcomings• To include lessons learned from the project in the relevant aspects of the foundation

phases for later projects

Comparison purpose:

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Step 9 : Performance Management

Processes need to be measured in terms of performance

• Stakeholder visions and expectations• Management expectations• Comparative measurements within the organization’s industry, competitors, and outside

the industry• Ensuring that the process owners understand their role in detail and have accepted it• Ensuring that the people change management process has empowered the people for

change• Centrally monitoring that this continuous improvement is working• Adjusting the approach from the lessons learned• Continually re-evaluating the applicability of the performance measures established

Process Performance measurement is done against:

• How an organization compares across business units within itself organization or with competitors

• Benchmarking can be related to throughput times, processing times, costs, quality, customer satisfaction, and profitability

• Benchmarking can also be completed ad different levels, such as product level, process level, business unit level and organization level

Benchmarking

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Step 10 : Feedback Loops

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Step 10 : Feedback Loops

• At the beginning of the process• Can anticipate for changes in business

Feedforward

• Process owner monitors the flow of process and ensure it flows as planned• Any issues need to be addressed

• At the end of the process• Corrective measures if targets or objectives are not met

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Monitor

Feedback

Feedback can be in the form of• Personal Feedback• Management Feedback• Process Feedback

Combination of Feedforward and Feedback to enable anticipation, monitoring, managing and correction

Critical Success Factors towards Benefit Realization

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An understanding that the realization of value needs to be intricately intertwined with, and a critical part of, the project and organization culture

It is necessary to plan benefit delivery-timeframes and costs

There must be agreement of the roles, responsibilities and accountabilities associated with the realization of benefits

There must be complete identification of the risks associated with the non-delivery of the benefits, and appropriate remediation strategies

The staff involved in the realization of the value must be trained in benefits identification, analysis and review

Relevant measures and management must be in place to track and act on the results

Unexpected benefits must be recognized and recorded

If it is possible to benchmark against other organizations within your industry, or appropriate others industries, then do so

Never underestimate the importance of the people change management aspect of the project on realizing value

Outputs

A benefits summary plan A benefits milestone network

matrix A benefits delivery matrix A benefits realization register

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RisksRisks Mitigation Strategy

Business may not commit to the realization of the benefits

Hold the project manager. Process foundation team and project sponsor responsible for the benefits management system

Lack of business benefit realization focus

Project manager, process foundation team and project sponsor responsible for the focus

Unrealistic benefit expectations, difficult to realize

Only record realistic benefits in business case and reporting matrix

Lack of structured approach to realization of business benefits

Establish and stick to benefits management framework

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