Association for Project Management holds an annual Benefits Management Summit. 2016 I spoke about non-Financial benefits using the Social Return on Investment (SROI) framework). Enclosed are the powerpoint slides
2. Contents
50 minutes practical session to
cover:
What does success look like?
Measuring Success
Why are “soft” measures
important?
Putting a financial value on non-
financial measures
Return on Investment – in a new
light
10 mins introduction and
explanation
15 mins understanding
15mins applying
5 mins sum up
3. Basics of Benefits Management
A Benefit is a result that a stakeholder
perceives to be of value.
Benefits Management is the identification,
definition, planning, tracking and realisation of
business benefits
4. What does success look like?
Financial Cash Releasing KPIs
– The ‘easy’ things to measure
– Traditional Return on Investment
Financial long-term, and not-directly-
financial KPIs: issues arising
– How to show Logic Chain/ Chain of
Causality?
– How to assign a value?
5. Some examples KPIs
Easily quantifiable
– Sales
– Costs
– Profit
Less easily quantifiable but possibly more important
– Customer satisfaction – an indicator of future business
– Staff satisfaction – R&R and productivity
– IP portfolio
Not-for-profit and possibly non-financial – the real future of the organisation
– Savings on other possible costs
– A value assigned to Quality of Life, or Happiness
– Future impact on the economy
6. Exercise – example measures
What would success look like for each of
these Programmes (based on FTSE100
Bakery/ high street eatery)?
ICT investment – a new CRM system
Fleet cars for management
Ventilation system for a bakery
Replacing bakeries in built up areas with a
single bakery out of town
7. The SROI six stage
process
Used for identifying your
stakeholders
8. Six stages of SROI
1. Establishing scope and identifying key
stakeholders
2. Mapping outcomes – relationship between inputs,
outputs and outcomes
3. Evidencing outcomes and giving them a value
4. Establishing impact (what would have happened
anyway?)
5. Calculating the SROI – and sensitivity analysis
6. Reporting, using and embedding
9. Change happens because people
make it happen
Who stands to gain?
Who stands to lose?
What do they care about?
What do they want to see change?
How can you measure that?
How can you minimise the effort of measurement?
What can you report?
10. How much do parents love their
children?
How much is a parent willing to pay to
have a child?
How do we know?
Is this a reasonable (conservative) cash
figure for how much love is worth?
11. Customer Satisfaction – what does it
mean?
How much does a customer cost to acquire?
How much is the lifetime worth of a customer?
How many customers will you acquire with your new
capability?
Will you change their lifetime worth, on average?
How much difference do you think this will make, in
financial terms?
What is the Return on Investment?
12. Staff satisfaction – what does it
mean?
How long does the average member of staff
stay?
What are the recruitment, onboarding and
induction costs?
How much does sickness/ absence cost?
How much difference will you make to each
of the above by your new programme?
What is the Return on Investment?
13. Chain of Causality/ logic chain
How much of the benefits we are measuring
can be attributed to the programme we’re
managing?
– What else is going on? (changes in the
environment, other projects)
– Is there a logical connection?
– What’s attributed to the sum total of
“everything else”?
14. SROI and Sensitivity Analysis
RoI
– Total return / total cost
Worst case
Most likely case
Best case
15. LM3 – Local Multiplier 3
A simple example of how money makes money
My company pays me £5000. I pay tax.
I spend what remains on cars/ insurance/ buying food and stuff/
entertainment and eating out. Each business pays tax.
They pay their employees. They pay tax
Each employee spends what remains on cars … eating out.
Each business pays tax
Does the money run out?
If we’ve created £15000 from the £5000 that I spent (it touched
7 pairs of hands before it left the North East), where did it come
from?
16. Some things to be aware of
Deadweight
Attribution
Causality
Believability
Standard approaches
17. Exercise – example measures
What would success look like for each of
these Programmes (based on FTSE100
Bakery/ high street eatery)?
ICT investment – a new CRM system
Fleet cars for management
Ventilation system for a bakery
Replacing bakeries in built up areas with a
single bakery out of town
18. Exercise Reminder
Six stages of SROI
1. Establishing scope and identifying key
stakeholders
2. Mapping outcomes – relationship between inputs,
outputs and outcomes
3. Evidencing outcomes and giving them a value
4. Establishing impact (what would have happened
anyway?)
5. Calculating the SROI – and sensitivity analysis
6. Reporting, using and embedding
19. Exercise CRM System
1. Stakeholders (5min)
2. Inputs, outputs and outcomes (Chain of Causality)
(3min)
3. Evidence and value (how will you measure?) (3min)
4. Impact (what would have happened anyway?) (2min)
5. Calculating the SROI – What is sensitivity analysis?
(2min)
6. Reporting, using and embedding
20. Some useful tools
The ‘Guide to Social Return on
Investment’ (Cabinet Office)
SROI Thought Leadership Guide
HACT measures library
Hugo
Purpose of the exercise
1 Hour practical session to cover:
Pick the right stakeholders
Know what makes a difference
Measure and report to drive change
Exercise in Stakeholder mapping
Exercise in Benefits mapping
Hugo
The most generic definition of a benefit, it works just about everywhere - A benefit is a result that a stakeholder perceives to be of value. It might not be what you’ve already heard earlier but let’s just go with it for now.
Benefits Management – the processes that get you your benefits
SROI – for when it’s not all about the money but you need some kind of currency to express value.
Hugo 3:07
Benefits can be more than profit
Not-for-profit - how to measure return on investment?
Savings on other possible costs to the public purse
A value assigned to Quality of Life, or Happiness
Future impact on the economy
For Profit and Commercial
Customer satisfaction – an indicator of future business
Staff satisfaction – R&R and productivity
IP portfolio
Hugo
Change happens because people make it happen
A clear vision
A way to measure progress
A clear connection between what is done and what is achieved
Something that motivates people (The basic benefits questions of any Change):
Who is it all actually for? Do we understand who gets the reward or the pain? Are they the right people?
What do they really want out of it? Is it tangible or emotional, personal or group-wide, feasible, proportionate, sensible, morally right?
What makes this choice better than Plan B? Show that it’s the best use of scarce resources.