Developing the Ofgem portfolio - Julie Black

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Developing the Ofgem portfolio Julie Black April 2015

Transcript of Developing the Ofgem portfolio - Julie Black

Page 1: Developing the Ofgem portfolio - Julie Black

Developing the Ofgem portfolio

Julie BlackApril 2015

Page 2: Developing the Ofgem portfolio - Julie Black

Developing the Ofgem Portfolio the organisation

Corporate Functions

• IT

• HR

• Group Finance

• Project Management Group

• Property & Procurement

Dermot Nolan CEO

Divisions

• Electricity Transmission

• Smarter Grids & Governance –Distribution

• Markets

• Sustainable Development

Schemes

• Renewable Electricity

• Domestic Renewable Heat Initiative

• Non-Domestic Renewable Heat Initiative

• Energy Efficiency & Social Programmes

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

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Developing the Ofgem Portfolio the Ofgem Strategy

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

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Developing the Ofgem Portfoliointroduction

“Business process improvement is at the heart of our drive to gain organisational efficiencies in both our policy and regulatory functions. In 2015 we will launch projects which examine our business functions and develop an approach to corporate planning which integrates our strategic objectives, our efficiency aspirations and our performance against planned outcomes. To inform this, we will consider ways in which we could be more transparent about the costs and benefits of our regulation. This will provide us with better information on which to base future planning and identify opportunities to increase the quality and cost effectiveness of our work. Crucially it will allow us to make effective prioritisation decisions and speed up decision making”.

Source: Ofgem Forward Work Programme 2015/16

Ofgem Strategic Transformation ProgrammeIntegrated Corporate Planning

This presentation sets out our approach to setting up a portfolio function. We describe our activities in the first nine months – building a foundation of processes, information and capability. This is the story of my team – the Project Management Group and the beginning of the journey from an ‘admin’ PMO to a corporate portfolio.

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

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Developing the Ofgem Portfolio key steps

We identified three key elements which needed to be in place in order to build our portfolio:

Sponsorship at the top of the organisation. Recent changes in top management have provided drivers for this change:

• Chair – October 2013• CEO – March 2014• Group Finance Director – March 2014• Strategy – launched September 2014

People and Processes – a skilled team and links with key points of contact in business areas• Growing an ‘admin’ PMO into an ‘agent of change’• Controls and processes• Infrastructure – modifying finance systems to capture and report corporate information in a

strategic context

Information - BAU, projects and future initiatives• What changes are we committed to?• Why are we initiating changes?• What business areas / processes are we delivering change into?• How do we evaluate and measure the impact?

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

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Developing the Ofgem Portfolio timeline

Sept 14

Dec 14

Jan 15

Feb 15

Mar 15

Aug 14

Oct 14

Nov 14

Jul 14

Mar 14

Oct 13

People…

Changes to finance system live

Apr 15

Head of Project Management Practice

May 15

Head of Portfolio & Operational Performance

Portfolio & Operational Performance Data Analyst

Portfolio AnalystAssociate Director

Performance Analyst

Changes to Senior Management & Strategy Development

ChairCEO

GFD

Strategy Developed

Strategy Internal Launch Strategy Published

Draft Forward Work Programme published for consultationForward Work Programme Published

Project accounting processes

Revised business case process

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

…and processes

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Sponsorship• Engage with and understand the priorities

of top managementPeople and Process• Re-orient PMG from passive to active• Recruit a team with capability to develop a

portfolio function• Design an enhanced approach to project

control – business cases and approvals linked to funding release

• Change to fact based MI and reporting against project baselines

Information• Create a baselined portfolio of all projects

and understand the business activities that change will be delivered into

• Use production of the 2015/16 Forward Work Programme as a starting point for the new approach

Developing the Ofgem Portfolio approach

Sponsorship• Use business understanding to build

relationships with senior managers, develop culture of prioritisation and demonstrate value of portfolio information

People and Process• Build team identity and develop team

capability• Begin aligning portfolio processes with

business planning / budgeting processes• Develop prioritisation model and test

throughout business planning roundInformation• Analyse the drivers in the organisation that

will influence prioritisation of future initiatives

• Regularly check that the information provided is useful – and effort required to produce does not outweigh the value

• Provide good quality, repeatable reporting on initiatives within the portfolio

• Report anticipated impact of initiatives on organisational performance targets

Prepare – FY14/15 Implement - FY15/16 Sustain – FY16/17

Sponsorship• Maintain alignment with organisational

priorities – remain relevant• Embed culture of prioritisationPeople and Process• Integrated corporate planning• Prioritisation model used for business

planning roundInformation• Repeatable process of integrated

information capture and analysis• Report impact of changes delivered into

BAU through operational performance reporting

• Maintain good quality, repeatable reporting on initiatives within the portfolio

• Maintain reporting of anticipated impact of initiatives on organisational performance targets

It is crucial to build a solid foundation before attempting to implement portfolio management into an organisation. We have taken a low-key approach, getting our own team ready and prepared. We will confirm that our approach is accepted by top management, ensure that we have the processes in place to provide good quality information and check that our team is trusted to be pragmatic and focused on the interests of the organisation as a whole. Only then can we confidently engage in detail with the wider organisation and demonstrate that effective portfolio management is a valuable management tool.

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

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Developing the Ofgem Portfoliocollecting information

We set ourselves a milestone of 1st April 2015. This meant that we had nine months in which to understand the business, put in place the key processes and build the team we needed to begin working effectively.

• With the annual budget round approaching, there was limited time to influence the data collection format.

• A manual process of extracting information from individual budget submissions was time consuming and complex, but forced the team to think about the context of business activity – and led to a deeper understanding.

• We observed all budget challenge sessions, further adding to our collective knowledge – and a useful insight into the style of the CEO and GFD – helping to shape our future reporting approach.

• Identifying single points of contact in business areas at operational level helped us to validate our information.

• We found that projects were easier to identify than BAU processes and activities. We used information gathered from a recent Business Continuity exercise – which provided a useful “bottom up” view of BAU activities.

• The most important factor was our engagement with the organisation to develop FY 15/16 Forward Work Programme. This process galvanised the organisation towards the new strategy.

• Our FWP interactions also demonstrating the new approach for the team. My aim is to delegate effectively, eliminate unnecessary hierarchy and sign off and give my team members the recognition they deserve. We gave the editor of the document the opportunity to represent the FWP in GEMA reviews. He was able to get direct complementary feedback and by showing this as our way of working, we attracted high performers from across the organisation during our recruitment phase.

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

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Sept 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15Aug 14 Oct 14 Nov 14Jul 14

Reporting against project baselines

Identify projects & BAU Initiatives

List of projects and initiatives baselined

Publish Final FWPPublish draft FWP for consultation

Budget challenge sessions

Budget templates sent to business

Changes to finance system live

Budget agreed

Finance timeline (high level)

Portfolio timeline

Analyse budget planning information

Early data showing initiatives against strategic outcomes

Forward Work Plan draft

Report progress of FWP initiatives and deliverables

Developing the Ofgem Portfoliocollecting information

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

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Orange

e-serve

Corporate functions

Estates

Budget breakdown by business area ‘Orange’ cost breakdown by strategic output

The team was able to provide high level detail of initial budget submissions, showing the progress of the organisations alignment towards the new strategy.

Developing the Ofgem Portfolio early results

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

Charts are illustrative only

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Activities for Ofgem in 2015/16 – project related work

Division Activity Brief description Strategic output Initial budget submission amount (m)

Markets Change of supplier (CoS)

New work – project to enable a faster and more reliable switching process

Effective Competition £x

Markets REMIT Ongoing work from 2014/15 -effective systems and processes for the application of REMIT in GB

Trust and Confidence £x(Includes IT cost)

SG&G Transmission Onshore competition –extending competition in transmission

New work – implementing the proposal to extend the use of tendering to onshore assets

Effective Competition £x

Activities for Ofgem in 2015/16 - teams

Division Activity Brief description Strategic output Budget submission (£m)

Sustainable Development

Enforcement Enforcement case work and policy work Multiple outputs £x(Includes 70% of SD legal

costs)

Markets Retail markets Domestic retail market policy, retail market analysis, non-domestic retail

Multiple outputs £x

Developing the Ofgem Portfolio early results

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

Project and team level information summarised context of the budget submissions

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Structured by Strategic Output

• Key Initiatives

• Budget

• Deliverables

• KPIs

Developing the Ofgem Portfoliothe Forward Work Programme

Structured by Strategic Output, the Forward Work Programme outlines the initiatives we think will make the greatest difference to consumers in the coming financial year. Our new approach means that the Forward Work Programme will become a living document through our portfolio.

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

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January 2015• Business Case approach finalised• Team recruited• Strategic Transformation Programme – corporate planning project

February 2015• Business Case approach communicated• Project budgeting processes agreed

March 2015• FWP published• Business Cases drafted • Project “Executive Summaries” drafted (assessing alignment of existing projects to the new strategy)

April 2015• Budget information validated and handed to Finance for input into finance systems• Team resourcing complete (full team to be in place by 8th May)• Portfolio Report – pipeline view, forward view of key deliverables & closure reports included into our

Major Project Report, providing early sight of our development towards a richer set of management information.

Developing the Ofgem Portfolioconsolidation and the sprint to the finish line

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

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Developing the Ofgem Portfolioevolution of the team

Pool of Programme Managers “Advice & Assurance”

Start Up Support Workshop Facilitation

Centre of Excellence

Reporting (top projects)

Head of PMGHead of PMG

Associate Director

By July 2014, the team had been through a period of significant change in management. Originally a pool of Project professionals allocated out to the major projects, the team changed model in October 2013 to become a centralised group – no longer providing PPM delivery, but offering advice and guidance.

MD E-Serve

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

The team began reporting to the GFD in June 2014. The new team is designed around a central portfolio function, which will link in a hub and spoke model to local portfolio offices in IT and E-Serve.

The new structure was agreed in November 2014, managed with an increase in headcount of two people (see next slide)

Team structure May 2014

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Operational Performance

• Establish a performance management culture, promoting continuous improvement, operational efficiency and process control

Portfolio Office

• Establish a strategic portfolio culture focused on effective prioritisation in the interests of the organisation as a whole

Project Management Practice

• Ensure the highest standards of project and programme disciplines and maturity across the organisation.

• Ensure that projects and programmes are well managed - meeting the tests of internal and external scrutiny

Provide high quality information and analysis to facilitate corporate planning and effective decision making

Associate Director

Head of Project Management PracticeHead of Portfolio & Operational Performance

Operational Performance Analyst Portfolio Analyst

Developing the Ofgem Portfolio evolution of the team

Flexible pool of skilled PPM Professionals

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

Portfolio management is at the centre of this function. The incorporation of an operational performance team enables us to evaluate the anticipated impact of the portfolio on strategic objectives in the organisation’s performance targets, and track the benefits of completed initiatives. This model balances the portfolio function by providing an view of the business as usual operations as well as a focus on project delivery.

Group Finance Director

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• Don’t try and sell portfolio management to the organisation before you have a mature PPM baseline. Building and providing good information will do more to warm up an organisation in the early stages.

• Keep it simple – report your progress towards capturing better project data and use it to bolster existing reporting at an individual project level. Minimise change to collated project reports in the short term.

• As you begin to capture portfolio level data, avoid the temptation to produce reports for senior management. You may set expectations too soon. Early on, it is likely that you have collected information manually and will be unable to maintain sufficient quality – with a risk of losing the confidence of the organisation.

• Anticipate cultural differences. Your colleagues in Finance have a lot of work to do during budget planning and are working to hard deadlines (i.e. Treasury). They will need to be sure that any changes to the budgeting process will be useful and not disruptive. Therefore it may take more than one business planning cycle to fully embed the desired changes.

• Be prepared to take a low key approach within the organisation. Build your own capability first and make sure you have good contacts within the business.

• Regularly check the value of the processes you are proposing and implementing. Don’t create a self-perpetuating team producing information which contributes little to decision making.

Developing the Ofgem Portfolio lessons and success factors

This presentation was prepared for the APM Portfolio SIG Conference, 22nd April 2015

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Thank you