Benefits Tracking Process

Business Process Knowledge DocumentBusiness Process Knowledge Document

Benefits Tracking ProcessBenefits Tracking Process

Benefits Tracking Process (Business Process)

BENEFITS TRACKING PROCESS

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Objectives of this knowledge granule are. . .Objectives of this knowledge granule are. . .

• To understand the principles of

the Benefits Tracking (BT)

process

• How BT can be used as a change

management and

communication tool

• How savings delivery is tracked



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(2) System

IT Tool

(Access database)

(2) System

IT Tool

(Access database)

(1) Process

Drivers

Charter

Team

Process Steps

Deliverables

(1) Process

Drivers

Charter

Team

Process Steps

Deliverables

There are two distinct aspects to Benefits TrackingThere are two distinct aspects to Benefits Tracking

This is covered in detail in the

BT System Business Process



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Benefits Tracking has some specific aimsBenefits Tracking has some specific aims

• To FORMALISE a process which will allow all the ideas/opportunities which DO exist to be assessed and progressed

• To provide CREDIBILITY to the numbers (the more we understand, the fewer conflicting messages we are likely to send)

• To REPORT BACK on our SUCCESSES!

Benefits Tracking drives the financial component of a projects Balanced Scorecard.Benefits Tracking drives the financial component of a projects Balanced Scorecard.



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BT is not only used to help manage change, it’s also a BT is not only used to help manage change, it’s also a great communication and mobilisation tool!great communication and mobilisation tool!

A way ofpreventing theduplication of

effort

Communicatessuccess throughthe Supply Chain

A process forjudging how weare progressing

A process for Plan/Do/Review

Prompts team/projectreviews

A tool for allocating resources

What BENEFITS

TRACKING is about. . .



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DeliverablesDeliverablesDeliverablesDeliverables

• A simple, user friendly database that can be used globally

• A system owner for 2000• A training and roll out plan• A set of clear baselines for monitoring savings

in 2000• Reporting functionality which meets the

requirements of functional managers and the supply chain teams

• RACI chart

• A simple, user friendly database that can be used globally

• A system owner for 2000• A training and roll out plan• A set of clear baselines for monitoring savings

in 2000• Reporting functionality which meets the

requirements of functional managers and the supply chain teams

• RACI chart

ObjectivesObjectivesObjectivesObjectives• To deliver a global benefits tracking system

which allows us to monitor identified, scoreboarded and delivered savings, both functionally and by supply chain

• To operate an effective benefits tracking process

• To assist in resource reallocation based on project progress

• To deliver a global benefits tracking system which allows us to monitor identified, scoreboarded and delivered savings, both functionally and by supply chain

• To operate an effective benefits tracking process

• To assist in resource reallocation based on project progress

ScopeScopeScopeScope• All opportunities where savings need to be

made to both achieve and exceed the M&S 2000 budget, specifically SNO implementation, purchasing, Supply Chain mgmt, manufacturing efficiency and packaging

• All opportunities where savings need to be made to both achieve and exceed the M&S 2000 budget, specifically SNO implementation, purchasing, Supply Chain mgmt, manufacturing efficiency and packaging

IssuesIssuesIssuesIssues

The TeamThe TeamThe TeamThe Team• Nigel Roberts• Andy Johnson• Neil Crawford

Client: Kevin Williams

• Nigel Roberts• Andy Johnson• Neil Crawford

Client: Kevin Williams

• H2 ensure opportunity owners update the numbers each month

• H2 ensure opportunities are not duplicated• H2 make the system global• H2 provide support to the functions to

generate their savings and reflect them appropriately

• H2 maintain momentum to update numbers each month

• H2 ensure opportunity owners update the numbers each month

• H2 ensure opportunities are not duplicated• H2 make the system global• H2 provide support to the functions to

generate their savings and reflect them appropriately

• H2 maintain momentum to update numbers each month

CSFsCSFsCSFsCSFs

MeasuresMeasuresMeasuresMeasures

• All of the issues are addressed• All elements of the process visibly operational• System in place and users trained by end

1999• Numbers available by the required date each

month• Data used as part of supply chain team PDR’s

• All of the issues are addressed• All elements of the process visibly operational• System in place and users trained by end

1999• Numbers available by the required date each

month• Data used as part of supply chain team PDR’s

• Functional agreement to own the numbers and update the opportunities

• M&S leadership team sign on and support• Supply chain teams sign-on• Person who is accountable for delivering is

also accountable for the data• Clear set of requirements from customers• Numbers tie-in with finance at a broad level• Clear, unambiguous baseline definitions

Benefits Tracking CharterBenefits Tracking CharterEXAMPLE

EXAMPLE



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There are three stages in the Benefits Tracking Process. There are three stages in the Benefits Tracking Process. The first stage is Identification...The first stage is Identification...

Identifying Identifying OpportunitiesOpportunitiesIdentifying Identifying

OpportunitiesOpportunities

ScoreboardingScoreboardingOpportunitiesOpportunities


Monitoring DeliveryMonitoring Deliveryof Opportunitiesof Opportunities


Opportunities identified at a high level - the focus is on thinking broadly rather than worrying about “H2 resource” or “likelihood of success”



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Identifying benefits highlights all opportunities…Identifying benefits highlights all opportunities…

• Start with a workshop!

• Focus on what the KPI will be i.e. where will the benefit be apparent

• Be inclusive at this stage

• “No idea is a bad idea”…

• Getting all ideas down in one place helps with prioritising and checking for duplication







Don’t be dismissive of ideas or opportunities at this stage!Don’t be dismissive of ideas or opportunities at this stage!



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Rank/group opportunities in terms of the following. . .Rank/group opportunities in terms of the following. . .

OpportunityIdentified

Will it hitP&L?

Will it changeW/capital?

Will it improveCAPEX?

Which streamwill deliver?

What’s thechance ofsuccess?

How complexis it?

What is a realistic target?

What’s our KPI?

- cost avoidance- cost reduction- revenue

enhancement









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Submit or “log” the Identified OpportunitiesSubmit or “log” the Identified Opportunities

• Some opportunities may be filtered out at this stage as clearly infeasible

• All other prospects need to be logged on a system that records the thinking done to date and the probability of success







See the Benefits Tracking System Business Process document.See the Benefits Tracking System Business Process document.

Business Process Knowledge DocumentBusiness Process Knowledge Document

Process and Support ActivitiesProcess and Support Activities

Benefits Tracking SystemBenefits Tracking System

““The success of the system will be judged upon its ease of useThe success of the system will be judged upon its ease of useand the quality and diversity of the reports produced”and the quality and diversity of the reports produced”



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The second stage is Scoreboarding...The second stage is Scoreboarding...

Opportunities are worked through in detail, culminating in a firm promise to deliver, based on stated assumptions signed off by the client



ScoreboardingScoreboardingOpportunitiesOpportunitiesScoreboardingScoreboardingOpportunitiesOpportunities






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At the scoreboarding stage, we are trying to pull together At the scoreboarding stage, we are trying to pull together a comprehensive plana comprehensive plan

• What the financials are

• Do we have a workplan?

• What the timing of delivery benefits is







Scoreboarded opportunities do not have to have a 100% probability of success.Scoreboarded opportunities do not have to have a 100% probability of success.

We need We need to know. . .to know. . .We need We need to know. . .to know. . .



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Scoreboarding requires detailed information. . .Scoreboarding requires detailed information. . .

• Calculation of “net” benefit for an idea (WHAT):– What costs are associated with the idea & when will they occur

– Costs will offset the savings

– More refined calculation than used at the identification stage

• When the benefit will arise - timing and phasing (WHEN):– Current year - by month

– Next two years - by quarter

– Ties into the budgeting requirements & horizons

• Which areas e.g. supply chain(s) will benefit (WHERE):– May have to allocate to multiple supply chains, if necessary

– Estimated allocations are acceptable

• Team that does the identifying and the implementation stream (WHO):– Could possibly be two different streams









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. . . and drives delivery of benefits. . . and drives delivery of benefits

• Scoreboarding occurs once “To-Be” recommendations are developed and approved for implementation

• A scoreboarded benefit is a benefit resulting from a recommendation which:

– Has been developed by the project team

– Is quantified and validated

– Is signed-off by the client

– Has been approved for implementation

– Includes an agreed implementation plan and benefits phasing







When benefits are scoreboarded, budgets and ETR’s are correspondingly adjusted.When benefits are scoreboarded, budgets and ETR’s are correspondingly adjusted.



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Scoreboarding….Scoreboarding….

. . . doesn’t always happen overnight

. . . is the process through which you get others to sign-on to helping you deliver the opportunities

. . . becomes easier with practice

. . . it may seem tedious or daunting, but it’s well worth doing







In 1998 through into 2000 on Project 5 Plus, we learned that getting

our opportunities scoreboarded was the secret of our success



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The third and final stage in the Benefits Tracking process The third and final stage in the Benefits Tracking process is monitoring Delivery. . .is monitoring Delivery. . .

Progress made is tracked against operational and financial targets

Opportunities are worked through in detail, culminating in a firm promise to deliver, based on stated assumptions signed off by the client










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Delivery is actually realising the benefits. . .Delivery is actually realising the benefits. . .

• The aggregation of Scoreboarded Opportunities gives a good forward view of likely outturn of benefits delivery

• Expect a high percentage of scoreboarded benefits to be delivered

• Thorough work at scoreboarding facilitates accurate measurement of delivered benefits:

– Benefits must be quantifiable and measurable

– Should be able to withstand minor audit scrutiny - “prove it”

– Systems need to be in place to capture and measure benefits• part of the workplan developed in scoreboarding• measured data needs to be consistent with scoreboarded data

• Delivery is driven by Scoreboarding as it requires “sign-on”

• This is where we show the reward for the effort!









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But what if we fail. . .?But what if we fail. . .?

• It should be viewed as the exception (clients have signed on to deliver)

• Targets are high but realistic enough for delivery

• There is a need to ensure that: – a thorough and professional job is done

– the risks are identified up front

– the opportunity is continually monitored against the scoreboarded plan

– activities are continually communicated

That’s OK! - but. . .









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Delivery on the project has been tracked via a number of Delivery on the project has been tracked via a number of business systemsbusiness systems

• Procurement savings in year 2000 were tracked via the ETR (Expected to Reach) analysis, with data provided by the Raw Materials Procurement Database

• Site-based Fixed Cost savings were tracked via an overview of the site expenditure against the appropriately phased budgets

• Delivery of benefits outside the M&S financial reporting systems (i.e. in Latin and Asia) needed to be tracked on a ‘per opportunity’ basis









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It is important to start early and move rapidly through the It is important to start early and move rapidly through the whole process to create a momentum for changewhole process to create a momentum for change

TrackingDelivery

TrackingDelivery

ScoreboardingScoreboarding

Opportunity LoggingOpportunity Logging

Idea GenerationIdentification

Idea GenerationIdentification

Ideas evaluated

Commitment to Action with Plans in Place

Realise the Benefits

What might be possible

RANKING PROCESS

IMPLEMENTATION

SORTING PROCESS

Phase 2

Phase 3

Phase 4

Phase 1Identifying Identifying

OpportunitiesOpportunitiesIdentifying Identifying






A benefits tracking Communications presentation was made available to help people work their way through the process.A benefits tracking Communications presentation was made available to help people work their way through the process.

BENEFITS TRACKING BENEFITS TRACKING

Communications Pack



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0 04.1

10.5

21.2

35.1

44.349.8

0 2.57.5

12.3

22

3138

4347

5360

6774

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

US

D $

m

Identified Scoreboarded Delivered

Flightpath to achieve stretch target of USD 148m (net of project expenses)

Flightpath to achieve Budget target of USD 74m (net of project expenses)

Budget CurrentIdentified

Score-boarded

Delivered2000Total

44

0

13

41

8

8.3

(2.8)

148

1

USD millions relative to 1999 Actual spend

StretchTarget

44

0

5

9

4

4.3

(1.2)

77

1

H1 Budget

0 5.213.4 1.2

3.7 0 -0

9.8 7.5 4.58

28.0 25.1 14.032

4 7.4 3.7 4.0

4 8.3 8.0 3.1

3.1 2.2 0.2

(1.6) (2.8) (2.8) (2.4)

Total (P&L)Total (P&L) 74 107 80 3.6

ManufacturingEfficiency

SC Management

Complexity Red

Labels & Packs

Procurement

Distribution

SNO Implement

Project Costs

Other savings / (Contingency)

Tolling 0

18018 14.6 10.6 7.59.5

0

0

4.5

16

2.51

(Cash)

15.46.49 18.5 18.5 17.7SNO Stretch 0

-

33.5

0

11.0 2.7 2.2 -0

49.8

Examples of the 5 Plus Benefits Tracking Summary and Examples of the 5 Plus Benefits Tracking Summary and flightpath for the end of July 2000 are shown. . .flightpath for the end of July 2000 are shown. . .

SummarySummary

FlightpathFlightpath



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. . . and they corresponded with the ‘benefits bottles’ . . . and they corresponded with the ‘benefits bottles’ which were a visual way of showing progresswhich were a visual way of showing progress

Identified Scoreboarded Delivered

$107.0m Identified

$80.0mScoreboarded

$49.8mDelivered

$60m

$80m

$100m

$120m

$140m

$160m

$40m$20m

$180m

$200m £40

m

$90m

$30m

$40m

$50m

$60m

$20m

$10m

$100m

$30m

$40m

$50m

$10m

$20m

Stretch Goal $151M$151M

$60m

$70m

$90m

$80m

Budget target$70m

$70m

$80m

$100m

$120m



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In summary, Benefits Tracking. . .In summary, Benefits Tracking. . .

Allows all ideas/opportunities to be assessed and progressed through a formalised process

Is a means of achieving and reporting successes

Is a mobilisation and communication tool and gets people involved

Follows a 3-stage process in which owners ensure delivery of benefits

The process is simple and should be kept that way



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Glossary of TermsGlossary of Terms

BSC Balanced Scorecard

PDR Plan-do-Review. A process for ongoing planning, implementation and review of the change process

M&S

H2

KPI

P&L

CAPEX

W/Capital

Manufacturing and Supply Department

‘How to ‘ - often used in a meeting when capturing Concerns in a positive way

Key Performance Indicator - The primary determinants of organisational/operational performance which are measurable; are consistent gauges of achievement

Profit and Loss

Capital Expenditure

Working Capital

ETR “Expected to Reach”. A view of the year end likely out-turn of a savings project or group of initiatives

Scoreboarding The second stage of the Benefits Tracking process which drives a firm promise to deliver, based on stated assumptions signed off by the client

“To-Be” A forward view of processes and activities to be implemented having examined relevant opportunities and designed the appropriate enhancements

Benefits Tracking Process

Documents

Transcript of Benefits Tracking Process