Developing the Ofgem portfolio - Julie Black
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Transcript of Developing the Ofgem portfolio - Julie Black
Developing the Ofgem portfolio
Julie BlackApril 2015
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
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
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
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
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
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
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
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
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
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
• 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
Thank you