BCM Workbook 2 2022

BUSINESS AND CHANGE MANAGEMENT
MANAGING PROGRAMMES
WORKBOOK 2
Updated December 2021

Valid for exams from June 2022 to March 2023
Business and change management
First published 2016
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2: Managing programmes
Table of contents
The syllabus ............................................................................. 1
2 Introduction to Workbook ........................................................ 3
2.1 Managing programmes ..................................................... 3
2.2 Topic overview diagram .................................................... 4
2.3 Programme: definition and features .................................... 5
2.4 Distinction between projects and programmes ..................... 7
2.5 The importance of stakeholders ......................................... 8
2.6 How a programme achieves organisational objectives ......... 10
2.7 Sponsoring the programme ............................................. 12
2.8 Programme mandate ...................................................... 13
2.9 The transformational flow of programme management ....... 15
2.10 Identification of a programme ........................................ 16
2.10.1 Programme brief .................................................... 16
2.10.2 Programme preparation plan .................................... 18
2.11 Programme definition .................................................... 18
2.12 Programme structure .................................................... 19
2.12.1 The role of the finance professional within a programme
............................................................................. 20
2.12.2 Programmes involving several organisations .............. 21
2.13 Refining the vision statement ......................................... 22
2.14 Developing the blueprint ............................................... 25
2.14.1 The blueprint for programme tranches ...................... 26
2.15 Benefit management..................................................... 26
2.15.1 Identification of benefits .......................................... 26
2.15.2 Categorisation of benefits ........................................ 27
2.15.3 Benefit profile ........................................................ 28
2.15.4 Benefits map .......................................................... 29
2.15.5 Benefits realisation plan .......................................... 30
2.16 Developing the project portfolio ..................................... 32
2.16.1 The project portfolio ................................................ 32
2.16.2 Evaluation of projects dossier ................................... 33
2.16.3 Project dependencies .............................................. 37
2.16.4 Planning the programme tranches ............................ 37

2.17 Confirm the programme business case ............................ 40
2.17.1 Gateway review ...................................................... 42
2.18 Management and control of the programme ..................... 43
2.19 Managing the tranches .................................................. 43
2.19.1 Preparing for a tranche ............................................ 44
2.19.2 Monitor and control ................................................. 45
2.19.3 End of tranche review and close ............................... 45
2.20 Delivering the capability ................................................ 46
2.21 Realising the benefits .................................................... 47
2.21.1 Preparation and planning for transformation .............. 47
2.21.2 Delivering and supporting the changes ...................... 48
2.21.3 Post transition ........................................................ 48
2.22 Governance strategies .................................................. 49
2.22.1 Risk and issue management ..................................... 49
2.22.2 Quality management ............................................... 50
2.22.3 Assurance management .......................................... 51
2.23 Closing a programme .................................................... 52
Summary ......................................................................... 54
Quiz questions..................................................................... 56
Quiz answers ...................................................................... 57
Scenarios.......................................................................... 59
The syllabus
Syllabus aim
Discuss, evaluate and apply techniques to deliver successful
programmes
Learning outcomes and content

Discuss, evaluate and apply techniques to identify and define
programmes
▪ Distinction between projects and programmes
▪ The importance of stakeholders
▪ Link to organisational objectives
▪ Sponsoring a programme
▪ Programme mandate
▪ Identification of a programme
− Programme brief
− Programme preparation plan
▪ Programme definition
− Programme structure including the role of the finance
professional
− Vision statement
− Developing the blueprint
− Benefits management – identification of benefits, benefit
maps and profiles and the benefit realisation plan
− Developing the projects portfolio including dependencies
and tranche planning
− Confirming the business case and Gateway review
Discuss, evaluate and apply techniques to manage and control
programmes
▪ Managing the tranches
▪ Delivering the capability (overview only)
▪ Realising the benefits
1
▪ Governance strategies
− Risks and issues
− Quality management
− Assurance management
▪ Closing a programme
Note
All CIPFA learning materials and examinations use £ (pounds) and
p (pence) as the designated currency.
2
2 Introduction to Workbook
To achieve a strategic goal, an organisation will need to define and
develop a programme for change, in which a portfolio of projects,
each delivering different outputs, is combined and coordinated such
that the planned benefits envisaged for the programme are
achieved.
In the previous workbook we considered the tasks involved in
managing a single project. In this workbook we will look at the
broader tasks involved in defining and managing a change
programme.
Guidance on managing programmes is provided by the UK
government’s Major Projects Authority in collaboration with Capita
(the international business process outsourcing and professional
services company). This guidance is known as Managing Successful
Programmes1 or MSP®, has become standard practice for
programme management internationally. MSP® is the basis of the
principles and practices detailed below.
2.1 Managing programmes

Successful programmes are run by professional programme
managers. However, an accountant will be a key stakeholder in the
delivery of business change and therefore needs to understand how
a programme is organised and managed.
In this workbook you will learn how a programme first comes into
existence, how it is planned and how it is executed to ensure
success. You will learn the vital importance of ensuring stakeholder
engagement at every stage of the process and how the focus of a
programme must always be on delivering the benefits it was
developed for.
One term which should be distinguished from programme
management is that of ‘portfolio management’. This is a related role
which refers to the task of creating and maintaining unrelated
projects and is outside the scope of this syllabus.
1
Axelos (2011), Managing Successful Programmes, Norwich: TSO
3
2.2 Topic overview diagram
MANAGING
SUCCESSFUL
PROGRAMMES
Purpose Creation Governance
Definition Sponsorship Mandate Risks and issues
Stakeholder Quality and

objectives engagement assurance
flow
Identifying a Defining a Manage and Close

programme programme control
Programme brief Programme Managing the

Structure tranches
Programme
preparation plan Delivering the
Vision
capability
Realising the
Blueprint
benefits
Projects portfolio
Benefits
management
Business case
4
2.3 Programme: definition and features

Key definition
Programme:
A temporary, flexible organisation created to coordinate, direct and
oversee the implementation of a set of related projects and activities
in order to deliver outcomes and benefits related to the
organisation’s strategic objectives.
Key points to note about the definition:
▪ Temporary – a programme is undertaken to achieve given

organisational objectives after which it is closed down. However
this does not mean it is a quick process. A programme may take
several years to complete.
▪ Flexible – a programme is not a fixed plan – it is constantly

under development and must be capable of accommodating
changing circumstances. At regular stages the programme is
reviewed, the key documentation is updated, and the future
plans are adjusted to ensure the overriding strategic goal will be
achieved.
▪ Coordinated – a key skill in programme management is deciding

which projects should be carried out in which order.
▪ Related projects and activities – the outputs from a number of

different projects and activities will be required to realise each
of the programme benefits.
▪ Outcomes and benefits – a project is designed to produce a

specific set of outputs. The aim of a programme is to achieve an
overriding strategic goal.
▪ Strategic – a programme is a significant, whole organisation

undertaking. It is because of the size and complexity of the
process that it is not undertaken within the normal operational
business of the organisation but is instead run as a separate
temporary structure.
Let us apply this definition to the Pawton government plan for the
fire and rescue services:
▪ Temporary – the programme is expected to take five years but

the end goal is a new operational way of working. Once that has
been achieved, the programme will be closed.
5
▪ Flexible – the programme’s aim is the development of an

effective fire and rescue service response to national
emergencies. If, during the programme, world events dictate
that new competencies will be needed, or different ways of
working must be introduced, the process should be flexible
enough to allow for them to be included at that later stage.
▪ Coordinated – there are three core parts to the fire service

programme – the development of the IT system, the building of
the control centres and the development of standardised ways
of working.
If the three parts were all started and run as completely
separate projects rather than as part of a coordinated
programme, there would be a real risk that the control centre
building project, which is likely to be relatively straightforward,
would be complete with the buildings waiting empty long before
the IT system was complete. (You will remember from
workbook 1 that IT projects, unlike construction projects, are
notoriously complex, subject to time overruns and if not very
tightly controlled can have spiralling budgets.) This would mean
millions of pounds tied up in buildings that could not be used.
By coordinating the projects and their likely completion dates,
the programme manager can ensure outputs are only delivered
as needed.
▪ Related projects and activities – the outputs from each of the

projects – the control rooms, the IT system, the ways of
working and the specialist training – will all be needed to deliver
the overall goal of a coordinated national response.
▪ Outcomes and benefits – the aim of the programme is effective

national response capacity – this is more than the output of any
one project.
▪ Strategic – the programme will affect all parts of the fire and
rescue service within Pawton. To organise and coordinate so
many different stakeholders will require a structure specifically
designed for the purpose.
6
2.4 Distinction between projects and

programmes
A project is designed to produce a specific output or series of
outputs to bring about a tangible change in an organisation’s
capabilities.
The aim of a programme is to use those capabilities, in combination
with the outputs from a range of other projects, to deliver a change
in the way the organisation does business, and so realise the overall
strategic objectives of the firm i.e. programmes deliver
transformational change.
Other differences include:
▪ A project has a clear start and end date for completed delivery
of the outputs. The end date for a programme, which must
realise objectives, will be less clear.
▪ A programme will run for longer than individual projects. The

outputs from a number of projects will be delivered during a
programme.
▪ Programme objectives cannot be realised with the outputs of a

single project, although individual projects may play an
essential role in the programme.
▪ A decision must be made to close the programme. At this point,

management of the change is passed from the programme
team to the operational business staff. This contrasts with a
project which will automatically be closed when the outputs are
delivered.
Note that a large project is not the same as a programme. A large
project may have lots of parts and require significant management
skills but it still delivers outputs – products or services – and the
project manager is not expected to realise organisational goals.
7
EXAMPLE1
For Cloud Airlines the building of the transatlantic terminal at
Tadnow represents a huge project. It will have many subsidiary
parts (from construction of the building itself and the roads which
will serve it, to commissioning art installations in passenger waiting
areas). However the building of the terminal will not alone make
Cloud Airlines a transatlantic provider. Additionally the order in
which the project activities can be clearly identified and the project
manager’s job finishes when it is completed.
For the airline to achieve its goal of becoming a transatlantic
provider will require the completion and coordination of many other
projects and activities, from the purchase of aircraft to contracting
with US airports for landing rights. It is this combination of related
projects that forms the programme and the programme manager
will need to coordinate them all. What’s more the job is not
completed until the intended benefits are being realised.
2.5 The importance of stakeholders

Stakeholder engagement is perhaps the most crucial task a
programme manager has to undertake. Some estimates suggest
that over 80% of the time spent by a programme manager is
focused on some aspect of stakeholder management.
The programme vision statement (discussed below) will play a vital
role in helping stakeholders to understand and buy-in to the value of
the programme and the benefits it will bring. However stakeholder
engagement is not about informing stakeholders about strategic
intentions – rather it involves collaborating with them at every stage
of the planning and execution of the programme.
Key definition
Stakeholder engagement:
Ensuring that the entirety of the programme is co-designed and co-
produced by a coalition of key stakeholders to achieve positive
supported outcomes and so realise the intended benefits.
8
A programme will only be successful if it has the full support of the

following stakeholders:
▪ The programme sponsors who must approve all major decisions

including the ongoing financial investment.
▪ Other organisations involved in the change.

This could include partners in the programme (where for
example the programme is undertaken as a joint venture), or
subsidiary organisations within the group structure that will be
affected by the changes, as well as supplier and customer
organisations.
▪ The operational staff who will need to implement the changes

and adopt the new working practices. They will need to be led
and kept motivated throughout the change process.
▪ The public who must engage with the new version of the
organisation if the benefits are to be realised.
Exercise 2.1
Identify the main stakeholder groups who should be included in the
planning coalition for the programmes for Cloud, Hartshap and
Pawton.
The leadership and engagement of stakeholders is covered across

many of the CIPFA modules. In the public service arena the
stakeholder groups are often more extensive and will consequently
require even greater levels of coordination. In particular:
▪ The techniques involved in identifying and managing

stakeholders are explored extensively in the Strategy and Policy
Development paper. All these techniques will be used within the
programme process.
▪ The development of a communications plan for a project is

covered in workbook 1. In the same way a programme manager
will draw up a communications plan for the programme.
▪ The tasks of leading and motivating staff through a change

process are explored in depth in workbook 3.
9
2.6 How a programme achieves organisational

objectives
The way in which a programme serves to deliver corporate
objectives is illustrated in Figure 1 below.
Figure 1 – strategic context of benefits management within a
programme2
2
Ibid.
10
Key definitions
Corporate objectives:
Long term strategic goals of the organisation
Programme vision statement:
A high level picture of the better future that the programme will
deliver.
Benefits:
Quantifiable, measurable improvements in organisational
performance perceived as positive by the stakeholders. The full
range of benefits required from the project will be described in the
programme vision statement (discussed further below). Taken as a
whole the benefits will ensure achievement of the corporate
objective.
Programme blueprint:
A description or model of the future environment that will be needed
to deliver the benefits. This will include details of the skills, working
practices, systems, structures, information systems and
infrastructure that will be needed.
Outcomes:
The practical manifestations of the new state the programme is
designed to bring about. The outcomes will be changes in behaviour
or circumstances which create the organisational environment
envisaged by the programme. The programme blueprint (also
discussed further below) will define the outcomes the projects must
deliver.
Outputs:
The results of projects and activities. They do not result directly in
organisational benefits. The capabilities they deliver must be
harnessed to bring about the outcomes needed to generate benefits.
Capabilities:
Services, functions and operations that the organisation can exploit
to realise benefits.
11
The diagram can be explained using the example of the Hartshap

Hotel chain:
▪ Objective: The objective of the chain is to shift its market

position upmarket and so improve profitability.
▪ Vision: The board have a vision of the future which sees the
Hartshap Hotel chain as a five star luxury chain of elite hotels.
▪ Benefits: The executive board want the programme to deliver

measurable benefits such as higher margins, improved brand
image and increased customer numbers.
▪ Outcomes: To become a luxury chain will require outcomes such

as a five star hotel experience, gourmet dining, an attractive
loyalty scheme and a strong brand message. These outcomes
should allow the chain to realise the benefits they have
identified.
▪ Outputs: The specific outputs for each of the projects, when

taken together, should ensure the achievement of these
outcomes. For example, to deliver a gourmet dining experience
may involve several projects: one to redesign the appearance of
the restaurants, another is to improve the menu and a third to
improve the standard of catering staff employed within each
hotel.
▪ Capabilities: To provide just one example from the outputs

described: the capabilities which would emerge from the
projects focused on the dining experience would be the ability
to design seasonal gourmet menus and cook local food to a high
standard
Exercise 2.2
Identify the objectives, vision, benefits, outcomes and outputs for
the programme to be undertaken by
(i) Cloud Airlines
(ii) Pawton government
2.7 Sponsoring the programme

A programme will require sponsorship at the highest organisational
level if it is to succeed. The senior executives responsible for
12
achieving the strategic goal the programme is designed to achieve

will form the sponsoring group for the programme.
The sponsoring group will be led by the senior responsible owner
(SRO) who will have overall responsibility for ensuring the
programme meets its objectives and delivers the required benefits.
(The details of programme governance structures are covered later
in this workbook.)
The first role of the sponsoring group will be to develop the
programme mandate. This must be done in collaboration with the
key stakeholders to the programme.
2.8 Programme mandate

In workbook 1 we considered the role of a project mandate which
triggers the start of an individual project. In this workbook we will
look at how a programme mandate triggers the initiation of a
programme.
Strategic goals are designed to achieve an organisation’s
overarching mission (this is covered in detail in the Strategy and
Policy Development paper). The executive team responsible for
achieving a particular goal must decide on a way forward which they
believe will enable the organisation to achieve it. They will then
propose a programme in the form of a programme mandate.
It will be essential from the very beginning of the process that key
stakeholders are consulted to ensure that the programme mandate
has their full support. The importance of ensuring stakeholder
engagement cannot be overstated. Without the support of those who
will be working within or with the newly designed organisation the
benefits will not be realised.
EXAMPLE2
The national government of Pawton has a very clear strategic aim –
they wish to facilitate a fast and effective national response to
national emergencies. This will therefore be the focus of their
programme mandate.
The local fire and rescue services are currently happy with their
ways of working. They are not controlled by national government but
by the local fire authorities that also support the status quo. Both
sets of stakeholders will therefore need to be persuaded of the value
of working within a new national control framework.
13
At this stage the programme is very much just an idea – no detailed

analysis has been performed. The programme mandate is a formal
document designed to explain the idea more fully and will form the
basis for the analysis to follow.
Key definition
Programme mandate:
A programme mandate is an initial high level description of the
strategic aims of the programme. Its approval triggers the initiation
of the overall programme management process.
A programme will have a high level and significant impact on the
way an organisation carries out its business. The mandate should
provide the basis for the development of the programme business
case and incorporate:
▪ The strategic objectives of the programme
▪ How the programme fits into the organisation’s strategic

framework including a summary of the ‘as is’ state that the
programme is being commissioned to address, and a summary
of the drivers for change
▪ The critical success factors against which its performance will be

measured
▪ Anticipated initiatives for inclusion and possible strategies for

delivery
▪ The improvements or capabilities that are expected
▪ An initial (and highly estimated) budget
Exercise 2.3
Suggest key contents for inclusion in the programme mandate for
the Hartshap Hotel Chain.
Once the mandate has been drawn up and formally approved by the
sponsoring group, the programme process will begin. The sponsoring
group should not approve the mandate until it is sure that it has the
support of key stakeholders.
14
2.9 The transformational flow of programme

management
There are a number of stages in the management of a programme
as shown in the diagram below:
Figure 2 – the transformational flow of project management
The aim of this workbook is to explain what is involved in each of the

stages involved in a programme. Leading a programme is not simply
about controlling the projects and activities within it. It is a larger
role which encompasses:
▪ Providing clear direction
▪ Actively engaging with stakeholders at all stages in the process
▪ Managing uncertainty and risk
▪ Supporting the transition to the new state and the realisation of

the benefits it brings.
As a programme is an organisation-wide undertaking, the finance
director will be a key stakeholder and will have an important role to
play in achieving these aims.
15
2.10 Identification of a programme

The first stage in the programme management process is
identification of a programme. This is a preplanning stage where the
idea contained in the mandate is refined to produce a more tangible,
workable design. The purpose is to test out the viability of the idea
in practice.
Identification of the programme will provide the context and
direction for the work that follows. At the end of this stage, if, and
only if, the idea is considered viable, the programme will be given
formal approval to proceed to the significantly more costly
programme definition (detailed planning) stage.
It has two aspects, firstly the programme brief is developed and
then a plan for the detailed planning stage is drawn up.
2.10.1 Programme brief

The approved programme mandate is used to produce the more
detailed programme brief. It is this key document which will be used
to decide whether the ‘idea in principle’ contained in the mandate is
actually workable in practice. If there are flaws in the mandate, the
programme brief should reveal them.
Key definition
Programme brief:
A programme brief provides a formal basis for assessing whether the
programme is viable and achievable. Based on the programme
mandate, it details the specific objectives, required benefits,
potential risks, outline costs and approximate timescales.
The brief should:
▪ Provide an outline vision of the future state envisaged for the

organisation with a clear description of the end goal
▪ Summarise the benefits the programme should realise which

will provide the justification for the investment along with
measurement criteria and approximate timescales
▪ Include estimates of costs, timeframes and effort required at

each stage from set up through to benefits realisation. Issues
such as optimism bias and a political desire to see the
programme implemented should be factored into the estimates
16
to ensure they are as realistic as possible, and include an

adequate contingency
▪ Assess the current ‘as is’ state (including any positive aspects
that are to be retained) and the aspects of business operations
and performance that will be affected by the change
▪ Include alternative options for delivery including an assessment

of the ‘do nothing option’ (you should remember this from zero
based budgeting in your Management Accounting studies)
▪ List the projects and activities which are expected to be

included in the programme
▪ Identify any risks that have already been recognised.

The programme brief is not a detailed business case for a particular
course of action; at this stage different options to achieve the
objectives may still be explored. It is an opportunity for the
sponsoring group to evaluate the initial idea more thoroughly, before
the expensive planning process begins, and ensure that the
programme will be able, in principle, to achieve what is intended.
Exercise 2.4
Suggest key contents for inclusion in the programme brief for the
Pawton government programme.
Approval to proceed
The decision to approve a programme is dependent on the analysis
provided by the programme brief. Approval should not be automatic,
and a programme could well be abandoned after the brief has been
reviewed by stakeholders. Reasons would include:
▪ Too much resistance / too little support from key stakeholders –

This is a major factor – if stakeholders do not believe in the
overall aims for the programme, it is highly unlikely they will be
persuaded at a later date.
▪ Unlikely to achieve the envisaged objectives – the aim of the

programme brief is to test the viability of the programme. All
stakeholders should be open to the possibility that it is not
viable.
▪ Will require resources beyond those available to the

organisation. It is essential that estimates are prudent and
17
contingencies are included so that even the ‘worst case’

outcome is affordable and worthwhile.
▪ Other strategic goals have a better chance of being achieved.

The programme under consideration is likely to be just one on
many competing claims on the resources of the organisation. If
other claims are less risky or likely to yield higher returns they
may be undertaken instead.
2.10.2 Programme preparation plan

Once a programme brief has been approved to move to the
definition (detailed planning) stage a programme preparation plan
will be drawn up. This is the plan for how the planning itself will be
carried out.
The definition stage for a programme can take many months and
can cost thousands (even millions) of pounds. It is therefore
essential that it is properly planned like any other large scale project
using the tools and techniques covered in workbook 1.
The plan will set out the governance arrangements, resources and
expected timetable for the definition stage. The definition stage must
not be rushed and the sponsoring group must ensure that sufficient
resources are made available.
2.11 Programme definition

The programme definition process marks the official start of the
programme. It determines who will be involved, what is to be
achieved and how it will be undertaken.
As explained above, the programme definition phase is where the
detailed planning for the programme is undertaken. As the process
progresses a detailed business case and governance structure for
the programme will be drawn up incorporating the planning outputs.
Too many large scale programmes fail because this phase is not
given sufficient time and resources. If the decision to proceed with
the programme is rushed and stakeholders are not fully involved in
the every stage of the planning process, it is likely that the projects
which are undertaken will not be suitable or will be undertaken in
the wrong order and the benefits from the programme will never be
realised.
At the close of this phase, the sponsoring group and the SRO should
have sufficient information to formally approve the programme to
proceed.
18
The definition phase will involve the following activities
▪ Establishing the programme structure
▪ Refining the vision statement
▪ Developing the blueprint
▪ Creating the benefits realisation plan
▪ Developing the project portfolio
▪ Confirming the programme business case

The list above introduces a number of new terms which are key to
the understanding of programme management. We will look at each
activity in turn.
2.12 Programme structure

A successful programme requires a defined and coherent
organisation structure to lead and run it. There are a number of
important roles in a programme structure each with a distinct remit.
The emphasis is on ensuring that the benefits envisaged for the
project are realised. We have already mentioned two of these roles
above - the sponsoring board and the SRO. We must now consider
the full structure of a programme organisation as illustrated in
Figure 3 below.
Figure 3 – programme organisation structure
19
Key definitions
Sponsoring group:
The senior management group driving the programme. Approves the
investment decision and provides the high-level support for the
programme’s objectives. Should include representatives from key
external stakeholder groups.
Senior responsible owner (SRO):
The individual with the overall responsibility for ensuring the
programme meets its objectives and delivers the required benefits.
Usually the chair of the programme board.
Programme board:
A group of key stakeholders formed to assist the SRO deliver the
programme.
Programme manager:
The person responsible for the day to day set-up, management and
delivery of the programme.
Business change manager (BCM):
Also known as a change agent. The role responsible for leading and
coordinating the change and delivering the programme benefits,
from identification through to final realisation, and for ensuring the
new capabilities are embedded. Active stakeholder engagement is a
key part of the role. Often more than one BCM is appointed.
Business change team:
Specialists who work with the BCMs to assist in the realisation of
programme benefits.
Programme office:
The function providing information and standard maintenance for the
programme.
2.12.1 The role of the finance professional within a

programme
Accountants will be involved in many of the roles within a
programme:
▪ Sponsoring group: This role is commonly taken on by the

existing executive committee or other senior board. This will
20
usually include the finance director who is likely to be

responsible for the investment decision and deciding on the best
way to raise the finance to pay for it.
▪ Programme board: This group is usually formed once the

programme mandate (or sometimes the brief) has been
approved. It will include executives involved in the projects in
the programme, functional heads (such as finance and IT),
other major stakeholders and where relevant lead suppliers.
The head of the finance function is likely to be responsible for
the analysis of risk, management of resources and application
of standards within the programme.
▪ Business change manager: Where a programme has a

significant financial dimension it is likely that a senior member
of the finance function will be one of the BCMs responsible for
realising the benefits of the programme.
▪ Business change team: The change team working with the

BCMs needs a range of operational specialisms from business
analysis to finance. Their role is to assist with the transition in
their area of the business. It is therefore common for an
accountant to be one of the members of the business change
team assisting the BCM to embed the finance related changes.
▪ Programme office: The programme office has two key roles.

One is to provide support in the form of information, resource
management, budgeting and risk analysis and administration.
The other is to be the home of governance and control (setting
standards, providing quality assurance and controlling finance
and the change process). Many of these tasks will be performed
by accountants.
It is likely that during your career as an accountant you will be
required to work as part of a programme team in one of roles
described above. As you become more senior, your role will become
more strategic and you will take on more responsibility for the
overall success of the programme. It is therefore essential that you
understand how a programme is run and managed and what is
required for it to be a success.
2.12.2 Programmes involving several organisations

Some complex programmes may involve the collaboration of two or
more organisations.
21
A common example would be a public private partnership where a

private sector provider funds and building capability for a
development to be run and staffed by a public service organisation.
It is essential in these circumstances that the programme
organisation is clearly defined and organised to allow for effective
collaboration. The organisation must be separate from the
operational structures of the individual organisations taking part and
may even be a separate legal entity.
Key features should include:
▪ A sponsoring group made up of executive representatives from

each organisation who agree to achieve the objectives together
▪ A programme board formed from managerial representatives

from each organisation. The SRO will be appointed from this
group to act as chair - usually from the organisation that is
taking on the most risk under the programme.
▪ Contractual agreement over specific rights of representation and

responsibilities.
EXAMPLE3
The Pawton programme will involve the collaboration of several
organisations – the government department driving the change, the
fire authorities that support the different fire and rescue services and
the services themselves. Representatives from all three bodies must
be appointed to both the sponsoring group for the programme and
the programme board in order to ensure their ongoing support.
2.13 Refining the vision statement

Above we defined the vision statement as ‘a high level picture of the
better future that the programme will deliver’.
The vision statement is a vital document:
▪ A change programme will transform the organisation and the

vision statement will help stakeholders to understand how the
future will look.
▪ The programme team must hold onto the vision throughout the
detailed projects and activities that follow. It should be their
focus during all of the programme’s stages ensuring that the
22
final result is the manifestation of the original vision and

achieves the strategic goal for which it was designed.
Once the defining the programme phase is underway, and the
detailed planning begins, the outline vision statement which was
produced during the programme identification phase must be
refined.
The outline vision will be worked on by a group of key stakeholders
headed up by the SRO. They will build the vision statement into a
strong, tangible statement of the future which can be used to
communicate the programme’s aims to all stakeholders and provide
the context and direction needed to develop a detailed blueprint.
We can therefore expand the definition as follows:
Key definition
Programme vision statement:
An outward-facing description of the better future state of the
organisation following programme delivery. It will describe the
combination of new services, improvements and innovative ways of
working with stakeholders to be achieved by the programme. It
should become the focus and enabler for the buy-in, motivation and
coordination of all programme stakeholders.
A good programme vision should:
▪ Be written as a vision of a future state
▪ Demonstrate why the current reality must be transformed
▪ Be concise and free of jargon
▪ Be easily understood and remembered by a wide range of

stakeholders
▪ Motivate and inspire

The vision statement should remain flexible and should not therefore
contain detailed performance targets or specific deadlines. Vision
statements are not the place for details. Details are reserved for
programme blueprint which will be fully aligned and consistent with
the vision.
23
EXAMPLE4
The local government group which developed an MSP® model known
as Public Sector Programme Management Approach (PS PMA) refers
to the vision statement as a ‘postcard from the future’ and provides
the following example3:
Example: Change of council leadership:
Dear resident!
Welcome to your transformed …council.
Working closely with you, our staff and our partner organisations we
have systematically reviewed every service we provide following the
mandate you gave us in 2010. We have made tough decisions about
stopping, transforming or maintaining services.
We have cut our costs and stripped out waste and inefficiency so we
are providing even better value for money. There have been no
council tax rises and we have improved satisfaction with the services
we provide.
With best wishes
The Leader
This second example comes from the Welsh Blood Service
Programme4:
“We will work closely with our donors, staff and customer hospitals
to provide a sustainable and high quality supply of blood
components on an all Wales basis by 2016. Ensuring that the right
blood components are available at the right time and in the right
place to meet patients’ clinical needs”
Exercise 2.5
Write a full vision statement for the Hartshap Hotel Chain.
3
Local Government Group (July 2011), PS PMA Embedding Guide [Online] Available
http://pspmawiki.londoncouncils.gov.uk/images/4/43/PSPMA_Embedding_Guide_Aug_2011.pdf [16th
July 2015]
4
Bryce G (2014), All Wales Blood Service Programme, Programme Blueprint, Version: Draft 0.21A
“DEFINING THE PROGRAMME” [Online] Available www.wales.nhs.uk/sitesplus/861/opendoc/256491
[16th July 2015]
24
2.14 Developing the blueprint

Once a vision statement has been agreed, the programme blueprint
must be developed.
The blueprint is divided into two sections. A brief 'as is' section
which describes the current state of the organisation and the main
'to-be' section which describes its future state in detail. The 'to-be'
section describes a working model of the organisation at the end of
the programme. It shows how it will operate to achieve the required
outcomes and benefits. The blueprint is sometimes referred to as a
‘target operating model’
The purpose of the blueprint is to allow for a detailed gap analysis to
be performed on the difference between the ‘as is’ state of the
organisation and the new future state. Planning can then take place
to close the gap using the projects and activities which will make up
the programme.
Note that a blueprint is not concerned with how to reach this new
future state but rather with providing a more detailed picture of how
it will look once it is achieved.
The programme manager is responsible for organising the blueprint
development process but it is the BCMs who should be the main
contributors.
The BCMs should develop the content, working closely with the
stakeholders who will be involved in using and operating the final
model.
The POTI model can be used to provide a framework for the matters
to be included in a programme blueprint:
▪ Processes, business models and functions including operational

costs and performance levels – what the business will actually
be doing day to day.
▪ Organisation structure, staffing levels, skill requirements,

culture and supply chain links.
▪ Technology, buildings, IT systems, equipment (e.g. customer

orders, delivery details) and machinery.
▪ Information and data requirements for future operations and

performance measurement (profit margins, brand awareness
levels).
25
2.14.1 The blueprint for programme tranches

Programmes do not deliver the future capabilities all at one time.
Instead there will be several points in time during the programme
when there is a step change in the organisation’s capabilities – when
a programme tranche is delivered.
Key definition
Tranche:
A group of projects within a programme that delivers a new
capability or capabilities.
The blueprint must therefore show the intermediate future states as
they are envisaged at the end of each tranche as well as the final
future state at the end of the programme.
These intermediate blueprints help with project planning as gap
analysis can be performed on the capabilities of the firm between
the delivery of one anticipated tranche and another – shortening the
time horizon for the detailed design work that follows the gap
analysis.
2.15 Benefit management

Delivering benefits is the core of any programme and it is therefore
essential that they are properly identified, evaluated and managed.
At every stage of the programme the benefits plan must be revisited
and if benefits are not emerging as intended action must be taken.
Programmes are often unsuccessful because although the projects
and activities within them have been delivered as planned, the
benefits did not follow.
2.15.1 Identification of benefits

The starting point for any benefits plan is to be clear about what
benefits the programme is designed to deliver. The tools and
techniques used to identify the detailed benefits which will achieve
strategic goals and their relationship to overall organisational
strategy is covered in your Strategy and Policy Development paper.
In a BCM you will be told within the scenario what benefits an
organisation wishes to have delivered by a programme.
The process of characterising the benefits will have begun during the
programme identification phase as they are included in the
programme brief although in summary form only. They must now be
26
categorised to simplify the benefit management process and defined

in more detail so that their realisation can be managed.
Note that any large transformational change is likely to have some
negative consequences. These are known as dis-benefits.
Key definition
Dis-benefit:
A measureable decline resulting from an outcome which is unwanted
by one or more stakeholders.
A dis-benefit is not the same as a risk – it is an expected, planned
for negative consequence which is accepted as the anticipated
benefits from the programme outweigh the negative impact.
EXAMPLE5
For example the decision to bring in better catering staff in the
Hartshap Hotel Chain is likely to also mean that many current staff
lose their jobs. The decision by Cloud Airlines to build a new
transatlantic terminal will mean greater noise pollution and reduced
property values for those citizens living near the airport.
Dis-benefits must also be categorised, identified and managed to

minimise their negative effects.
2.15.2 Categorisation of benefits

The identified benefits should first be categorised so that similar
types of benefits can be grouped together within the benefits plan.
This categorisation is allows the organisation to
▪ Plan its priorities
▪ Ensure that a balanced mix of benefits is achieved
▪ Direct activities to ensure the each types of benefit is capable of

being realised
▪ Develop suitable methods of measuring benefits realisation.

Benefits can be categorised in many ways; for example based on:
▪ Financial impact (such as operational cost savings, increased

revenues etc.).
▪ Achievement of value (improved economy, efficiency or

effectiveness).
27
▪ Impact on stakeholders (altered brand image, improved

customer experience).
▪ Alignment with a particular corporate objective (a programme

may be designed to achieve several objectives at once).
▪ Level of risk – i.e. how likely it is that the benefit will be realised
by the programme? (this assists in the direction of effort
towards removing the risks).
▪ Timescale (many large programmes include some ‘quick wins’ –

benefits which are delivered early on in order to garner and
maintain stakeholder support).
2.15.3 Benefit profile

For each benefit which has been identified a benefit profile must
then be developed by the relevant BCM in collaboration with other
interested stakeholders.
A benefit profile is a detailed description of a single benefit or dis-
benefit. It will include:
▪ A description – what precisely is to be improved (and the

benefit category to which the benefit belongs).
▪ Observable outcomes – the differences that stakeholders will

notice as a result of the programme.
▪ Attribution – who is responsible for ensuring it is delivered (this

will be one of the BCMs in the programme structure).
▪ Measurement – how and when the benefit will be measured –

i.e. KPIs must be developed.
The benefit profiles will be a reference point for the planning and
management activities that follow. Many programmes struggle to
deliver because what the organisation wanted to achieve was not
defined clearly enough at the outset:
▪ The programme must have a clear and detailed idea of the

benefits to be achieved in order to select a suitable portfolio of
projects to deliver them (see the benefits map below).
▪ The realisation of the benefits cannot be tracked without

predetermined measurement criteria.
28
▪ Assigning responsibility for benefit realisation helps to direct

attention and focus throughout the programme.
2.15.4 Benefits map

Once the benefits are fully developed, they will provide the starting
point for the selection of suitable projects and activities to include in
the programme and so achieve the results required.
Consider the benefits map for the Hartshap Hotel Chain shown in
Figure 4 below.
Figure 4 – Benefit map for Hartshap Hotel Chain
Note the interdependency between the corporate objectives which

form the basis for the programme and the project outputs which are
to be produced. The outputs which are delivered by the projects
within the programme will deliver capabilities which change the
circumstances of the organisation (the outcomes). These outcomes
allow the organisation to realise benefits which achieve the
organisational goal.
The benefits map should be created by working from right to left –
starting with the organisational goal and working backwards to
develop the outputs that will be needed to achieve it.
29
2.15.5 Benefits realisation plan
Key definition
Benefit realisation plan:
A complete view of all the benefits to be delivered by the
programme along with their dependencies and the expected dates
for their realisation. It is used to track realisation of the benefits
across the programme and set review controls.
The benefits realisation plan is a vital part of the programme
management process. The sole purpose of a programme is to deliver
benefits. It is therefore essential that throughout the programme the
benefits are tracked and measured. If they are not emerging from
the projects as expected, action must be taken at once.
The BCM(s) own the benefit realisation plan. It is their role to track
the benefits coming out of the programme and ensure they are
embedded into the business.
Tracking benefits
Tracking benefits involves measuring progress towards the target
KPIs which were included in the benefit profile. There are a number
of practical issues which will need to be resolved:
▪ Data capture: Some of the data needed to track the benefits

may already be produced by the organisation’s systems.
Hartshap Hotel Chain will undoubtedly already have information
on customer numbers and revenue figures. However some of
the measurement criteria detailed in the benefit profiles may
require the introduction of new systems to track benefits, for
example the chain may not currently collect information on
brand image. Unless a suitable data capture system is
introduced (such as using a marketing firm to monitor brand
awareness and rating for the firm at key stages in the
programme) it will not be possible for the BCM to monitor the
improvement of the brand over the course of the programme.
▪ Baseline ‘as is’ date: Unless the existing position is recorded,

the improvements made cannot be measured. Where
operational changes will mean that ‘like for like’ measures will
not exist, new KPIs may need to be developed to provide a
picture of the progress made. Cloud Airlines do not currently
operate transatlantic flights and there is therefore no baseline
data for that route on prices, market share, customer service
30
ratings etc. KPIs should be developed for use throughout the

programme and beyond towards their target positioning using
techniques such as benchmarking (identifying the current best
players in the market and using their performance as the gold
standard to achieve).
▪ Range of indicators: Care must be taken to ensure that

indicators are selected for a range of factors. If the KPI for a
benefit is to be based on cost reduction, an additional KPI may
also be included to measure the maintenance of quality or
continued customer service. This prevents the benefit being
delivered but at the cost of other important business objectives.
In the same way Hartshap must take care to include KPIs on
cost and expenditure levels in addition to quality measures.
They otherwise risk costs rising out of control in the pursuit of a
five star provision.
▪ Fluctuations: Many organisations will have normal variations in

their performance (for example as a result of seasonal factors).
These will need to be understood and adjusted for to allow for
fair measurement.
▪ Goal congruence: Existing targets within ongoing contracts,

service level agreements or staff performance evaluations will
need to be reviewed and where necessary amended to ensure
alignment and therefore congruence with the programme aims.
Fire crews within Pawton may currently be assessed and
rewarded in part on the speed of their response to an incident.
The targets and assessment criteria will need to be brought into
line with the KPIs developed for the control centres.
▪ Behavioural impact of target setting: Once KPIs are set

attention is focused on their achievement. However this may
lead to unintended behaviours which mean the benefits are not
fully realised.
For example a planned benefit for a public health service
programme was the reduction in the time taken to see patients.
The time was measured from when a patient arrived at hospital
to when they were seen by a medical professional. Hospital
managers therefore introduced a triage system so that patients
were quickly seen by nurse to be assessed and prioritised for
later treatment. This achieved the KPI but did not deliver the
planned benefit as the patients were not actually treated any
more quickly (and scarce resources were diverted away from
31
this aim). A better KPI would have been more closely aligned
with the benefit – a reduction in the time between arrival and
treatment.
You will explore the behavioural impact of targets in detail in
your Strategic Public Finance module later in your studies.
Timing of benefits
The plan must contain a schedule which details when specific
outcomes should be in place and each benefit is to be realised.
This allows for benefits reviews to be scheduled at appropriate
intervals so that action can be taken if the benefits are not emerging
as planned.
However outside of the formal review process the BCM should be
constantly monitoring performance metrics to ensure that the
changes are emerging as predicted and be prepared to intervene if
there are signs that the benefits will not be achieved as expected.
Intervention may take the form of altering the projects or tranches,
adjusting the blueprint to reflect a more realistic outcome or, in
extreme cases, closing the programme.
2.16 Developing the project portfolio

The other major activity to be performed in the programme
definition phase is selection of the portfolio of projects and activities
which will deliver the changes described in the blueprint. The
process of project selection is a highly skilled one requiring
considerable programme management experience. However as a key
stakeholder the accountant is likely to be part of the team evaluating
the suitability of the selection as the project portfolio is being
designed.
2.16.1 The project portfolio

The programme brief will have included suggestions about how the
programme aims might be achieved but at a summary level. The
programme manager, along with the rest of the programme board,
will now need to decide on the specific projects to undertake and the
order in which they should be completed. The portfolio of projects
and activities is detailed in the projects dossier.
The board will be informed in their choice by the programme vision
and the detailed blueprint supporting it, as well as by the benefits
profiles that have been drawn up for the programme.
32
The final projects dossier is likely to contain a mix of:
▪ New projects designed to achieve specific outcomes
▪ Existing projects which can be repurposed to achieve the

programme aims
▪ Ongoing projects which must be halted in order that other new

ones can be commenced.
One of the difficulties for the programme board when designing the
projects dossier is the vested interests of various stakeholders. It is
not unusual for members of the sponsoring group, or other
significant stakeholders, to have specific ‘pet’ projects that they wish
to have included in the dossier. Other stakeholders may be heavily
involved in current projects that will not want to see abandoned or
altered to fit the programme vision.
The programme board must keep their focus firmly on the
programme vision. If the project cannot be justified in terms of its
contribution to the vision, it must not be included. In the same way,
if a project cannot be continued without impairing the achievement
of the vision it must be stopped.
The growing dossier must be continually evaluated for suitability
against key criteria (see below) and amended and adapted as
needed until the optimal mix is determined.
2.16.2 Evaluation of projects dossier

Development of the final projects dossier is an iterative process. The
initial design will be evaluated, altered and evaluated again until an
optimal set of projects and activities has been agreed by the key
stakeholders.
The perfect option would be low cost, low risk, quick to deliver and
produce all the benefits required. However in most situations this
will not be possible and a balance between these aims must be
found.
Many of the aspects to be considered have a financial element and
the finance professional on the programme board will have a
significant role in the evaluation process.
To evaluate the portfolio, questions must be asked from the
following perspectives: (The main headings can be remembered
using the mnemonic CRRROC.) This evaluation will form the core of
33
the business case which will be used to support and approve the
programme to begin.
▪ Commercial suitability:
− The competitive environment in which the organisation
operates: Who are the competitors and what will be their
likely reaction? What substitute products or services are
available to customers if they are unhappy with the
changes?
− Expected reaction of customers / clients: How will demand
be affected? What will be the effect on the market / public
perception of the organisation and its products or services?
− Reaction of the stock market (private sector) or
government (public service organisations).
▪ Risk level:
− Sensitivity of the estimates: How accurate are the figures
supporting the design and how sensitive is the decision to
any changes in those estimates? Remember that
programmes containing a significant IT element will be
particularly vulnerable to inaccurate estimates.
− Variability of the cash flows: Firms with high levels of fixed
operating costs and / or fixed interest borrowing (known as
high levels of gearing) are more vulnerable to variable
income streams. Solutions which will increase exposure to
variable cash flows (such as seasonality or economically
vulnerable industries such as construction) should be
treated with particular caution.
− Diversification: Overreliance on one source of income or
resource is risky. Solutions that increase the level of
diversification within the organisation (perhaps by offering
a greater range of products or by expanding into different
markets) will therefore help to protect the firm against the
vagaries of any one income stream.
− By contrast solutions that make the organisation more
dependent on fewer resources will increase risk. Pawton’s
fire and rescue provision will be more vulnerable to a
failure of a control room when only nine are operating
(rather than the current 46).
− Overseas business: Once an organisation operates across
national boundaries, whether though trade, outsourcing
34
partnerships or expansion, additional risks must be

considered. These include short term currency fluctuations,
long term changes in the relative trading power of the
different economies and the currency impact of translating
financial statements into a different currencies.
▪ Returns earned
− To what extent can expected returns be attributed to the
programme?
− What is the expected financial return from the investment?
E.g. NPV, ROCE, present value of cost savings
− What non-financial benefits are anticipated and how
accurately can they be measured?
− What will be the impact on margins / potential for
economies of scale / synergy gains?
− Are any additional future opportunities likely to arise as a
result of the projects chosen?
− When are the returns expected?
− How will returns be split between partner organisations
involved?
− What level of returns will be committed to paying funding
providers?
▪ Resources required (often considered using the 5 Ms model)

− Men: Are their sufficient people with the required skill set
available? Will people need to be recruited / retrained /
relocated? What is the organisational culture? Will it
require a paradigm shift in the way staff think and behave?
− Machines: Will significant investments in new equipment /
buildings be needed and are the funds available? Will the
information systems cope with the changes or will they
need to be changed?
− Materials: What relationships does the organisation have
with suppliers and to what extent will the existing supply
chain support the projects included?
− Market: What new message will be needed in terms of the
overall brand – do all the projects support this message?
− Money: Can the entire projects dossier be financed
assuming a worst case scenario? What will be the financial
35
position at the end of each programme tranche? Will cash

flows throughout the programme support the planned
timescales?
▪ Objectives achieved
− Will the programme vision be achieved?
− Will key stakeholders be willing to support the programme
as it unfolds?
▪ Consistency with the organisational business model

− Whilst the programme is being undertaken, the
organisation will also be continuing with normal business
operations. What impact will the projects that form part of
the programme have on ‘business as usual’? How will it fit
in with other programmes or projects being run at the
same time?
Exercise 2.6
Use the CRRROC perspectives above, evaluate the projects dossier
of the Hartshap Hotel Chain and identify the issues that should be
considered before it is approved.
During the evaluation process some projects will be rejected as

unsuitable when considered from the perspectives listed and others
may be identified to fill gaps or better match the criteria.
If a suitable group of projects and activities cannot be found the
team must either:
▪ Amend the blueprint so that it is less ambitious (i.e. closer to

the current ‘as-is’ state).
▪ Rethink the way the outcomes are to be achieved and select a

different group of projects to achieve them.
▪ Close the programme. This is a real option and should not be

ignored. The defining the programme stage is about ensuring
that a workable solution exists. It should be accepted therefore
that one answer which may emerge is that there is no workable
solution and the programme should be stopped before
considerable sums of money are wasted.
36
Assuming a coherent list of projects and activities has emerged, the

project dependencies can be identified and the programme tranches
can be planned.
2.16.3 Project dependencies

In workbook 1 we considered how the various activities within a
project may be dependent on each other and looked at the use of
network diagrams to illustrate those dependencies.
In the same way the dependencies between projects can be plotted
onto a project dependency network to help provide the programme
manager with insight into the effect of any delays and to assist in
planning the programme tranches.
Figure 5 – Project dependency network
2.16.4 Planning the programme tranches

Once the interdependencies between the projects and activities in
the projects dossier has been determined, their delivery can be built
into tranches, which reflect the different step changes in capability
that they will achieve.
We defined a tranche above as ‘a group of projects within a
programme that delivers a new capability or capabilities’.
The key features of a tranche are therefore:
▪ One or more projects or activities.
▪ Delivers a step change in organisational capabilities as

described in the intermediate blueprint.
▪ Includes transition activities necessary to achieve the outcomes.

37
▪ Includes a control and review point at which the programme

may be approved to continue, changed to bring the benefit
realisation back on track or stopped.
There is no magic formula for deciding in what order the projects
should be carried out or the number of tranches the programme will
consist of but the following factors should be considered:
▪ Once a tranche has been delivered work on the transition from

the current operational state to the future state the capabilities
enable will begin. This is the process of realising the benefits
(discussed further below). It is therefore important that the
projects represent a coherent whole – i.e. between them they
deliver all the outcomes necessary to achieve that
improvement.
Hartshap Hotel Chain would want to ensure that projects to
improve menus, retrain and recruit chefs, redesign restaurants
and appoint new food suppliers were all delivered within the
same tranche. This would then allow the BCMs to begin work on
the provision of a gourmet dining experience within the hotels
in a coherent manner.
▪ Some projects may be dependent on the outputs of others so

would need be scheduled for a later tranche.
Cloud Airlines cannot start to operate transatlantic flights until
the terminal has been built and their baggage handling and
catering capacity has been upgraded. It is therefore logical that
the operation of the first flights would be in a separate later
tranche.
▪ It may not be possible to define some of the projects clearly at

the beginning of the programme.
At the end of each tranche the programme is re-evaluated and
the results from the earlier tranches used to confirm whether
the solution chosen is still the correct one or whether changes
may need to be made. Projects which depend on these earlier
results will therefore be scheduled for later tranches.
For example Cloud Airlines may review the programme and
decide that as a result of detailed market research on customer
demographics carried out as part of an earlier tranche, they will
need three commercial centres in the US rather than two and
that it would be better if the Eastern seaboard centre was
located in Boston rather than in New York.
38
▪ Some projects may deliver more or more significant benefits

than others.
For example the building of the flagship five-star hotel will set
the standard for the remaining hotels, raise the profile of the
company, improve the brand image and earn higher margins
than many of the existing hotels. It is therefore to be expected
that this project would be in one of the first tranches.
▪ The organisation is likely to have a finite amount of resource in

any one period and the tranches will need to be organised to
ensure that everything within them can be delivered
contemporaneously with the resources available.
The Pawton government will need to finance the programme
over five years and may need to stagger spending to fit with
annual budget spending plans.
▪ In the same way, the organisation will need to manage its

appetite for risk. It would not usually be acceptable to
undertake too many high risk projects at the same time and so
the tranches will be designed to smooth out the risk profile of
the programme over time. Risk appetite is discussed further
below.
Figure 6 – Programme schedule showing tranches
39
Note that in the above diagram some projects run through the
tranche ends. This may be unavoidable but the number of such
projects should be minimised, as it makes it much more difficult to
stop or redirect the programme at the end of a tranche.
Overlapping tranches
In a large and complex programme later tranches may be started
before earlier ones have finished. The decision to overlap tranches
increases risk because:
▪ Some projects in one tranche may be dependent on the

completion of those in earlier tranches, increasing pressure on
the earlier projects to finish on time.
▪ At the end of each tranche, the viability of the programme

should be reassessed and a decision may be taken to make
significant changes or even stop the programme. The outputs
from projects started early as part of a later tranche may now
not be needed and so the investment is wasted.
▪ There is no clear review point when a programme can be

stopped or redirected. Programmes with multiple overlapping
tranches are therefore more likely to end up out of control and
failing to deliver benefits.
▪ Tranche reviews are also used to inform the remainder of the

programme and so increase its chances of success. If later
tranches are started early it is less likely that lessons from
earlier tranches can be used to improve the overall programme.
2.17 Confirm the programme business case

The aim of the defining the programme stage is to produce the
detailed plans which will be used to run, manage and control the
programme. At the end of this stage, the programme manager will
have:
▪ Established the programme structure
▪ Refined the vision statement
▪ Developed the blueprint
▪ Created a benefits realisation plan and
▪ Developed the project portfolio.
40
The programme must now be approved to move to the next phase –

in which the projects and activities are started and the programme is
managed and controlled. This approval takes the form of the
approval and sign off of the supporting programme business case by
the sponsoring group.
Key definition
Programme business case:
The strategic justification for the programme and the projects within
it, in which the objectives and benefits of the programme are
balanced against the financial investment, timeframe and risks it will
involve.
The business case for the programme will have been under
development since the start of the programme identification stage.
The programme mandate contains the basic premise for the business
case and the programme brief (once approved) provides its outline
content.
However is during the definition stage that most of the development
takes place. As the vision, blueprint, benefits and projects are
produced, the relevant information is fed into the developing
business case. At the end of this stage the business case should
contain all the information needed by the sponsoring group to
determine whether the programme is viable, provides value for
money and is on target to achieve the strategic goal it is designed
for.
Note that the business case for a programme is not fixed. It will be
continually monitored and reviewed (along with the business cases
for the projects within the programme) and updated as needed to
ensure that the programme is always fully aligned with the strategic
objectives of the organisation. We will return to this process when
we cover the Manage and Control phase below.
The stages for the final approval to proceed to the next stage are:
▪ SRO and programme board approve the documentation for the

programme
▪ Sponsoring group endorses the programme
▪ If necessary an independent review may be carried out such as

an OGC GatewayTM review (see below).
▪ Sponsoring group authorise the SRO to begin.
41
2.17.1 Gateway review

You should recall from workbook 1 that the first OCG Gateway
review stage – called Gate 0 – is a programme-only review. The
process5 is summarised below.
Where an organisation uses the Gateway review process, a
programme will usually undergo at least three Gate 0 reviews. Once
at the end of the programme definition stage, at least once at key
decision points of the programme (i.e. at the end of key tranches or
if a significant change is made) and once when the programme is
closed.
The aim of the initial review is to:
▪ Confirm the expected outcomes and objectives will make the

necessary contribution to the organisation’s strategic goals
▪ Ensure the programme is supported by key stakeholders – this

is a vital component of a successful programme
▪ Review the arrangements in place for leading and managing the

programme including monitoring and managing risks
▪ Check that sufficient provision has been made for financial and
other resources to be made available – programmes require
serious commitment and may fail if the sponsoring group
underestimate (due to bad planning or optimism) the level of
resource that will be needed.
Later reviews will focus on ensuring that:
▪ Recommendations made in earlier reviews have been actioned
▪ The programme is currently on track and benefits are being

managed and realised in line with expectations
▪ Plans for the work to be done through to the next stage are
realistic, properly resourced and authorised
▪ There is continuing support from stakeholders.

The final review is designed to assess whether the programme has
been successful and to ensure that the lessons to be learned from
the programme have been analysed and shared.
5
OGC (2007) OGC Gateway TM Process Review 0: Strategic assessment OGC Best Practice – Gateway to
success, HMSO: London
42
2.18 Management and control of the

programme
The management and control of a programme requires the dedicated
skills of a programme manager. The tranches must be started and
directed to ensure the capabilities emerge, risks and issues must be
managed (in the same way as they are for individual projects),
stakeholders must be kept informed and onside, and mechanisms
must be in place to ensure the programme’s performance remains
on track and the benefits are realised.
The activities and projects within the programme will be started, run
and closed by the project managers appointed to the role as
described in workbook 1. The programme manager has a higher
level role – that of coordinating the entirety of the programme as it
is undertaken. This involves:
▪ Managing the individual tranches.
▪ Ensuring the projects in the dossier deliver the capabilities

required to achieve the outcomes described in the programme
blueprint.
▪ Enabling the realisation of the benefits in accordance with the

programme vision.
▪ Implementing governance strategies.

We will now look at the main features of each of these processes.
The programme board will review, monitor and approve each
process and it is at this level that the finance professional is likely to
be involved.
2.19 Managing the tranches

Each tranche of projects should form a coherent whole which
delivers a step change in the organisation’s capabilities.
Once the capabilities from a particular tranche have been delivered:
▪ The BCMs begin the work of managing the transition from the
old ways of working to the new and ensure the outcomes from
the tranche are achieved.
▪ The next tranche of projects can be started in order to deliver

the next step change in capability.
43
The programme manager will be responsible for:
▪ Preparing for the start of each tranche and obtaining

authorisation from the SRO and the sponsoring group to
proceed
▪ Overseeing and directing the work in accordance with the

programme plan
▪ Engaging with stakeholders and ensuring their continuing

support
▪ Managing risks and issues and quality assurance throughout the

tranche (this is covered further below)
▪ Carrying out the end of tranche review and closing it down
▪ Overseeing the transition from one state to another.

The primary focus of the programme board (and therefore the finance
professional) will be to review and approve each process as it occurs.
2.19.1 Preparing for a tranche

Before each new tranche is started, the programme must be
reviewed and re-planned to take account of how previous tranches
have progressed and to incorporate any changes that have occurred
since the last review. Programmes are not fixed plans. They should
be flexible and continually adjusted to ensure that the approach
planned for the remainder of the programme remains the best way
to achieve the organisation’s goals. A significant part of the
stakeholder management role performed by the programme
manager is concerned with reassuring stakeholders that changes to
the original programme are necessary and to be expected.
As each tranche is completed, the way ahead can be charted with
more clarity and any alterations that might be required can be
identified. Changes may have to be made to the programme
approach, the skills and resources needed, the projects dossier, the
contents of specific tranches or the programme infrastructure.
Clearer definitions for projects whose outputs depended on previous
tranches can also be developed.
Before the tranche begins:
▪ The blueprint, benefit maps and profiles and projects dossier for
the tranche will be reviewed and updated for any changes
needed
44
▪ The programme business case will be updated to reflect the

changes and reapproved
▪ The SRO will consult with the sponsoring group and obtain their
approval for the next tranche to proceed.
2.19.2 Monitor and control

Once the tranche is approved to proceed the projects and activities
within it are started, managed and closed. The primary focus of the
programme board whilst the tranche is ongoing will be:
▪ Checking that the information coming out of the programme is

complete, timely, accurate and relevant. Gaps or out-of-date
information may mean that the programme is out of control.
▪ Monitoring the realisation of the outcomes and benefits which

should be emerging from the previous tranche (see realising the
benefits below) and approving their realisation as they do.
▪ Approving major decisions and deviations from plan.
▪ Dealing with risks and issues which are escalated from the
individual projects or the programme overall as well as those
arising from external circumstances such as a changes in
legislation or competitor activities.
2.19.3 End of tranche review and close

A tranche is considered at an end when all of the projects and
activities within it have been closed and the capabilities for the
tranche have been delivered. The BCMs are then responsible for
overseeing the transition to the new operating state the capabilities
will enable.
At the end of the tranche the progress of the programme to date,
along with the business case and benefits plan, are subject to a full
review. At the end of the review process:
▪ A ‘go/no-go’ decision is taken about proceeding to the next

tranche based on whether the programme is still viable
▪ The realisation of benefits is assessed to determine whether it is

still on track (see below)
▪ Lessons learned documented during the process are rolled

forward to inform the development of the next tranche
▪ The tranche is formally closed.
45
Benefits review
A major benefit review should be carried after each programme
tranche to consider whether:
▪ Planned benefits have emerged as expected
▪ Benefits expected at a future date are still achievable
▪ Management of benefits realisation is effective and what

improvements can be made
▪ The overall set of programme benefits are still desirable, aligned

with the programme’s objectives and correctly prioritised
The outcomes of the review should then be shared with the
sponsoring group and other significant stakeholders in order that
action can be taken where necessary before the next tranche begins.
2.20 Delivering the capability

This is the process of coordinating and overseeing the management
of the projects in the projects dossier to achieve the outputs
required to create the capabilities needed. This practical process
involves the following activities:
▪ Starting the projects: The programme manager will need to

ensure that the project management team understand:
− The context for the project within the blueprint
− The part their project plays within the specific programme
tranche
− Dependencies between the project and other projects in
the programme
− The benefits it will help to deliver.
▪ Ensuring projects are aligned with the benefits plan and the
programme objectives: The BCMs will take a major role,
working with the project management teams to ensure the
project outputs will deliver the capabilities at the right time and
in the form envisaged by the blueprint.
46
▪ Ensuring stakeholders are engaged and provide input as

needed: The more closely stakeholders are involved in detailing
requirements, reviewing designs and carrying out user
acceptance testing, the more they will understand the
programme overall and the better the project outputs will
reflect their needs.
▪ Dealing with those risks that may impact the overall

programme. Some risks may arise within individual projects and
be escalated by the project board to the programme manager
and the SRO. Others (such as funding shortages) may relate to
the delivery of the programme itself.
▪ Controlling the closure of projects to ensure that the combined

output from all the projects within the tranche support the
planned transition to the next level of capability.
2.21 Realising the benefits

Ensuring that the benefits are successfully realised involves planning
and overseeing a change from the old ways of working to the new
organisation as described in the programme vision. This is a vital
part of the programme as the benefits are the whole reason the
programme was undertaken in the first place.
This transition can be split into three phases:
▪ Preparation and planning for transformation
▪ Delivering and supporting the changes
▪ Reviewing progress, measuring performance and adapting to

change.
In workbook 3 we will look in detail at the management of people
during a change process. The sections below provide a brief
overview of the work involved.
2.21.1 Preparation and planning for transformation

Change plans
In order to ensure that the organisation implements the changes
needed to its ways of working, the programme manager will need to:
▪ Design the changeover
▪ Ensure current operations can be maintained during the

transition
47
▪ Communicate the change to all those who will be affected
▪ Ensure that the systems, skills and resources are in place to

make the changes
Benefits measurements
The KPIs to be used for measuring the achievement of benefits will
have been specified in the benefits profile.
Performance over the transition period and beyond will need to be
compared with the baseline ‘as is’ measures established in the
benefits realisation plan.
2.21.2 Delivering and supporting the changes

As the changeover progresses, staff will need to be supported and
kept motivated. The aim is to ensure that the new ways of working
are understood, implemented and become embedded as the
business restabilises following the change. Unless this process is
carefully managed there is a risk that the staff will revert to old
practices and the benefits will not emerge.
2.21.3 Post transition

Once the capabilities delivered by the tranche have been
incorporated into the new ways of working, the expected outcomes
should emerge.
Cloud Airlines should start taking bookings for the first transatlantic
routes, Hartshap Hotel should start enrolling customers onto their
loyalty scheme, and emergency calls in Pawton should start to be
routed through the new IT system. The benefits (such as higher
revenues, higher rebooking levels and faster response times) should
therefore start to follow.
The key post transition activity is therefore measuring and reporting
on the benefits as they emerge. If they are not emerging as planned
the relevant BCM will need to work with the programme manager
and other relevant stakeholders to consider the options.
▪ The most likely solution is restructuring the projects dossier for

the tranches that follow to get the programme back on track.
▪ If the level of benefit emerging is considered to be the best that

can be hoped for it will be necessary to revisit the business case
and revise the vision and blueprint to a more realistic level.
48
▪ If the benefits are not emerging and no solutions can be found

then in extreme cases the programme may have to be stopped.
2.22 Governance strategies

We will now look at three key governance themes that underpin
successful management of a programme:
▪ Risk and issue management.

▪ Quality management.
▪ Assurance management.
These themes are not unique to programme management. Below is
a brief summary of the ways in which they apply to programmes and
references to where the topics are covered in detail within the CIPFA
syllabi.
2.22.1 Risk and issue management

In workbook 1 we looked in detail at how risk is managed within a
project. The tools and techniques used are identical to those used at
programme level and you should be prepared to discuss them in the
context of a programme as well as a project.
This would include:
▪ Determining risk appetite
▪ Identifying risks and categorising them according to their

impact and likelihood
▪ Determining the significance of risks
▪ Developing a suitable response using the four T model
▪ Documenting the risk management process using a RAID log
▪ Reviewing and monitoring throughout the programme

Risks and issues may arise from a range of sources at different
levels within a programme:
▪ Strategic - External factors e.g. legal or political changes to the

organisation’s operating environment.
▪ Programme – Arising from within the programme itself e.g. the

interdependencies between projects or lack of buy-in from key
stakeholders.
49
▪ Project – Factors within individual projects where the matter is

so significant it is escalated to the programme board such as a
significant delay or budget overspend.
▪ Operational – Implementation of the changes e.g. cultural

resistance to the new ways of working.
2.22.2 Quality management
Key definition
The following definition applies in the context of a programme:
Quality management:
Ensuring that all the features and characteristics of the processes,
structures, activities and outputs within the programme meet their
required specifications or fulfil the stated programme need.
You are not required to know the detail of quality management
activities within the Business Change Management syllabus.
However you should be aware of the eight process areas which
should be monitored for evidence of their effectiveness in supporting
the programmes objectives.
▪ Communications management – identifying and understanding

stakeholders, anticipating and meeting their needs and acting
quickly to rectify problems if deliverables do not meet the
required quality.
▪ Supply chain management – ensuring suppliers apply appropriate

quality management to their own processes and will deliver
products and services that meet the programme’s needs (we will
look in detail at managing the supply chain in workbook 4).
▪ Standards management – ensuring that products and services

meet customer requirements and / or external conformity
standards.
▪ Process management – ensuring that processes (sets of related

activities) are carried out in the right order and are controlled to
ensure they do not deviate.
▪ Information management – the right information must reach the

right people at the right time and in the right format. It must:
− Be compliant with legislation and organisational policy
− Have integrity with regard to version control
50
− Be available to the decision-makers that need it

− Be subject to appropriate levels of confidentiality
− Reflect the current situation.
▪ Asset management – in this context, assets can mean software,

vehicles or buildings. They must be identified, tracked and
protected.
▪ Programme leadership – a governance framework must be in

place to ensure the programme is run, communicated and
directed in a robust and unambiguous manner.
▪ People management – this is the focus of workbook 3. People

management will involve leading change, communicating a
better future and learning from experience.
2.22.3 Assurance management
Key definition
The following definition applies in the context of a programme:
Assurance management:
The implementation of a systematic set of actions which will give the
SRO and key stakeholders confidence that the programme is
controlled, on track and will deliver the benefits needed to realise
the organisation’s objectives.
Assurance can be gained in a number of ways:
▪ Audit of the programme activities (by internal or external

auditors) to confirm that they conform to specified criteria
▪ Reviewing evidence from the benefit measures of KPIs being

generated.
▪ Assurance reviews by senior management covering aspects

such as programme management capability, effectiveness of
the BCMs, information flows etc. The aim is to gain assurance
that the processes / systems are fit for purpose.
▪ Gated reviews such as the OGC Gateway™ review discussed

above.
As will all assurance activities, assurance management should be
based on five key principles:
51
▪ Independent – assurers should not be members of the

programme team nor have any involvement with the
programme or its staff.
▪ Integrated – the reviews should cover the programme from

start up to benefits delivery and should cover all those matters
needed to support all major decisions and investment
approvals.
▪ Linked to major decision points – the reviews should inform

each stage of the programme as it is undertaken and so should
be timed to deliver findings in time for major events, tranche
ends, key approval points etc.
▪ Risk based – work should be focused on the areas of greatest

risk and designed to take account of the specific risks facing the
programme.
▪ Followed up – once a review has been undertaken and actions

recommended to resolve issues identified, follow up reviews
should be scheduled to ensure the appropriate action has been
taken and a clear escalation process should be in place for
issues that remain unresolved.
2.23 Closing a programme

Because programmes can last for several years, it is necessary to
formally bring them to a close.
Usually a programme is complete when the last tranche has been
completed, the blueprint has been delivered, and the benefits are
emerging as expected.
The usual process for ending a programme involves the following
stages:
▪ Closure is confirmed by the sponsoring group.
▪ The programme is subject to a full review to report on:

− Delivery of the blueprint, realisation of the overall benefits
and achievement of the business case
− Lessons learned which will be used to inform future
programmes.
It should be borne in mind that some benefits may not fully
emerge until after the end of the programme, in which case a
further review may be scheduled for a later period.
52
▪ The programme organisation and supporting functions are

disbanded.
As already discussed, there may be times when a programme is
closed early – when the business case does not stack up, if the
benefits are not emerging or will cost too much to realise or if
external circumstances change such that it is no longer needed (for
example if Cloud Airline were bought out by a carrier which already
had transatlantic capacity). In this case any remaining live projects
will also need to be closed or transferred out of the programme.
53
Summary
▪ A programme combines and coordinates a portfolio of projects

to deliver organisational change and so achieve strategic goals.
▪ Stakeholder support and active involvement from the very start

of the programme is the key to achieving success.
▪ The programme mandate triggers the initiation of a programme.
▪ The programme identification phase is a pre-planning phase in

which a programme brief is prepared to test the workability of
the programme. If approved a plan for the planning stage is
developed.
▪ The programme definition phase is the official start of the

programme in which the detailed planning takes place and the
business case is confirmed. This involves several key activities:
− Developing a coherent programme structure.
− Refining the programme vision.
− Developing a blueprint which describes a working model of
the organisation at the end of the programme.
− Identifying and profiling the expected benefits and
developing a benefits realisation plan. This aspect of
programme management is vital to ensure that the project
outputs actually deliver the strategic objectives and
business change managers (BCMs) play a key role in
achieving it.
− Developing a project portfolio. The portfolio will need to be
evaluated and adjusted until the combination of projects
offers the best solution available.
− Planning the programme tranches taking account of project
dependencies and other key factors such as coordinating
the outputs of different projects to allow for benefits
realisation to begin.
▪ Once the programme is underway the tranches must be

managed and controlled, the projects must be overseen to
ensure that the outputs are delivered and the planned changes
must be implemented to realise the intended benefits.
54
▪ Throughout the programme, risks and issues must be monitored

and addressed, the quality of the programme processes must
be maintained and measures must be taken to ensure that the
SRO and key stakeholders retain confidence in the programme.
▪ Programmes must be formally closed.
55
Quiz questions
1. Distinguish between an output and a benefit in the context of a

programme.
2. A programme mandate is:
a. A working model of the future organisation
b. A postcard from the future describing the organisation to
its stakeholders
c. A high level description of the programme’s strategic aims
d. A basis for assessing whether the programme is viable.
3. What is the role of the senior responsible owner (SRO)?
4. Who should be represented on a programme board?
5. What are the two roles of the programme office?
6. What is the POTI model?
7. What should be included in a benefit profile?
8. Why should a range of KPIs be introduced when measuring the
realisation of a benefit?
9. List two things that should happen when a tranche is delivered.
10. Identify and illustrate the four levels within a programme which
may give rise to risks and issues.
56
Quiz answers
1. An output is the result of a project – such as a new call

management system. A benefit is the quantifiable measurable
improvement in performance brought about by the changes
implemented by a programme – such as faster customer
response times.
2. a. Describes a blueprint, b. Describes a vision statement, c. Is
correct, d. Describes a programme brief.
3. Leader of the sponsoring group responsible for ensuring that the
programme meets its objectives and delivers the required
benefits.
4. Executives from the organisation, functional heads in affected
areas, key stakeholder groups, major suppliers / customers.
5. Provide support in the form of information and the home of
governance and control.
6. A framework for the matters to be included in a programme
blueprint including processes, organisation structure,
technology and information.
7. A description of the benefit, the observable outcomes expected,
the person responsible for ensuring the benefit is delivered, and
a KPI measure.
8. To avoid focussing on that benefit at the cost of other
organisational objectives – i.e. overspending to achieve a high
quality result, or negatively impacting customer service in the
pursuit of cost savings.
9. 1) Work on transition from current operational state to the
future state (to realise the benefits from the tranche) should
begin.
2) The progress of the programme to date, the business case
and the benefits plan should be reviewed to determine what
changes need to be made to keep the programme on track.
Note – if it is approved to proceed the next tranche (as revised
for changes needed) can be started – however this will depend
on the outcome of the review and should not be considered
certain.
57
10. Strategic – e.g. legal changes, Programme – e.g. project

interdependencies, Project – e.g. significant budget overspend,
Operational – e.g. resistance to change.
58
Scenarios
Scenario: Cloud airlines

Cloud Airlines (CA) is the national flag carrier airline of Shanland, a
medium sized European country. Its head office is based in the
capital city of Tadnow. The airline serves Northern Europe, North
Africa and the Mediterranean and has a strong record on safety,
reliability, value for money and good customer care.
The company is largely privately owned, although the state
government still holds 28% of the shares (down from its original
85% after floating much of its holding in 2002).
The company is divided into three wholly owned subsidiaries; Cloud
Airlines Europe (CAE), Cloud Airlines Africa (CAA), Cloud Airlines
Mediterranean (CAM).
To increase profitability, the executive board of CA is planning an
ambitious expansion programme into North America. Their aim is to
be one of the top fifteen transatlantic airlines within the next ten
years. They intend to offer a competitive service, and maximise
revenues by pricing to attract market share from established market
players whilst maintaining their reputation as an excellent provider.
They are aware that to achieve this they will need to focus on quality
and efficiency throughout the development.
To achieve this goal will involve, amongst other things, building a
new transatlantic terminal building at Tadnow airport, increasing
their fleet of aircraft and upscaling their capacity in terms of
bookings, in-flight catering, baggage handling etc. They will also
need to open up at least two commercial bases in the US, probably
in New York and Washington. The business will be run by a new
subsidiary Cloud Airlines US (CAU).
59
Tadnow transatlantic terminal

The new terminal building is scheduled to open in 2020 and is
expected to cost in the region of £2.3 billion (i.e. £2 300 million). In
addition to the national Cloud airline, the terminal will be used by a
number of independent airlines and one major customer, the
Songline Alliance, a group of airlines working together to provide
international air transport under one banner.
60
Scenario: Hartshap Hotels Chain
History
The Hartshap Hotels Chain (HHC) opened its first hotel in France in
1964. Over the past fifty years it has expanded across Europe and
now owns 30 hotels in ten countries and employs over 4 000 people.
It has traditionally targeted the lower end of the luxury market,
offering a stylish stay at affordable prices.
Each hotel is run by a designated hotel manager accountable to one
of the four regional directors all of whom sit on the executive board.
The company is run by the executive board based in France, headed
by the new CEO, Jeanette Dupont.
Recent performance
The CEO until last year, Jacques Robert, was a firm believer in hands
off management and under his leadership the chain’s fortunes began
to falter. Over the past decade profits have been falling and market
share has diminished. A dividend has not been paid for the past two
years and after pressure from shareholders the old CEO resigned
and was replaced by Ms Dupont. She has worked with the executive
board to agree a demanding five year plan to revive the company’s
fortunes and return it to profitability.
Current problems
The Hartshap brand is not well known. Traditionally hotel managers
have been encouraged to make their own stamp on the hotels they
run and the different hotels within the chain are not consistent with
each other in terms of style, service or standard of service.
Performance goals were based on budgets submitted by the
managers themselves and were rarely challenged. Many hotels are
dilapidated, service can be poor and the food offering is variable,
dependent on the chef’s preferences, and poorly rated by guests.
The chain’s rating on Tell Me – the holiday review website has fallen
considerably, and Qualhol, the exclusive high end holiday magazine,
no longer features their hotels.
The new strategic aims
The company wishes to reinvent itself as a hotel chain providing ‘a
five star luxury experience offering the best of local culture and the
finest European cuisine’. It hopes to reposition itself as an upmarket
brand and recover profitability. The initial budget estimate for the
plan is £85m of which a significant proportion is to be spent on the
building of a new hotel.
61
How the aims will be achieved

The approach to the planned change will include the following:
▪ The existing hotels are to be fully refurbished in the new luxury

‘house style’. This should improve margins and increase
customer numbers. The aim is to refurbish the hotels several at
a time but never more than two in the same country at once.
They will be closed, refurbished and relaunched as part of the
new brand image.
▪ A new flagship hotel is to be opened in Kravej, a European city

currently developing into a major tourist destination. It is
hoped that the publicity will help to revitalise the Hartshap
brand. The hotel project is expected to cost approximately
£40 million. The planned opening date is May 2018. The
director in charge of the project is Louis Augustin, director of
development who will move to Kravej to oversee the build.
▪ The hotel restaurants are to be redesigned and reimagined to

offer a gourmet dining experience in keeping with the luxury
refit. Experienced local chefs will be recruited and encouraged
to devise menus which meet the exacting standards of the
Qualhol restaurant reviewers whilst making the best of local
ingredients.
▪ An advertising company has been appointed to launch a new

marketing campaign is to be launched to strengthen the brand
and clearly position the hotel chain at the luxury end of the
market.
▪ The marketing campaign will be combined with a new website

which will offer an integrated booking system and a loyalty
scheme although the detailed requirements are not yet clear.
An IT contractor has not yet been selected.
62
Scenario: Pawton fire and rescue service

There is no centralised firefighting and rescue provision in the
country of Pawton. Instead there are 46 separate fire and rescue
services each responsible for up to thirty fire stations in their local
area. Some of the services cover large metropolitan areas, others
extensive rural areas whilst others cover a mix of towns, cities and
countryside villages. Each service is accountable to an autonomous
local fire authority. The authority collects funding for the service
from all the councils in the local area and pays it over to the service
to spend as needed.
Each fire and rescue service is responsible for operating its own
control room which accepts and directs emergency calls and
coordinates a response from the fire stations within the local area.
The control rooms have also developed systems for answering calls
on behalf of neighbouring areas and coordinating responses with
them during busy periods.
The processes and systems used vary between individual fire and
rescue services and between control rooms as they have evolved to
meet local needs. Even within one control room there is no standard
agreed approach to responding to emergency calls. Call handlers use
their expertise to process calls, using a range of different methods
depending on the need arising and the other demands currently
being made on the system. Currently local fire and rescue services,
their controlling authorities, and the fire stations within each service
have a good working relationship and are happy with the systems
they use.
However, the government does not directly control the services and
there is currently no way to coordinate a national response to
emergency situations. After several national disasters including
terrorist attacks and widespread flooding following severe storms,
the Pawton government department responsible for supporting fire
and rescue authorities within Pawton has decided to implement a
major reorganisation programme to be started immediately.
The 46 control rooms are to be replaced with a network of nine
purpose-built regional control centres using an integrated national
computer system. A national control framework will be developed
governing the whole country and all 46 local fire and rescue services
will use the new system.
63
The aim of the department is to facilitate an effective national

response to major disasters and in the process:
▪ Increase efficiency and ensure faster response times to local

emergency calls
▪ Upgrade response and deployment capacity through new

technology
Projects include:
▪ Building nine state of the art regional control centres which will
be networked to share information.
▪ Developing and building a new IT system to handle incoming

calls and redirect them to the correct fire and rescue service.
The system will incorporate caller location technology, satellite
tracking of vehicles and mobile data terminals in each vehicle to
communicate with firefighters on the ground.
▪ Moving the emergency call operations from the existing 46 local

control centres to the new regional control centres.
▪ Redesigning ways of working to align with the new technology

and provide coordinated responses including introducing
standardised policies and procedures across all services.
▪ Developing and delivering specialist training for all services to

deal with major incidents.
The government minister in charge of the department is very keen
to see the programme implemented and has already made an
announcement to the press about the plans. It is expected to take
five years and the estimated cost of the programme has been
budgeted at £120 million. It is believed that the overall savings in
national fire and rescue could be as much as £86 million.
64
Scenario: Colswell City Council

Colswell is a small city of approximately 225 000 people, although
the population is expected to grow by 9% over the next 15 years
with the largest increase in the over 45 age group. In particular the
over 75 age group is expected to increase by 30% (67 500).
Colswell City Council
The council is run by a city cabinet of elected councillors who take
most of the strategic decisions. The cabinet leader is Sam
Beechwood. He has a reputation for decisiveness and has little time
for people who challenge him. He sets high standards and can be
unsympathetic towards those who make mistakes.
The council is currently divided into five separate directorates each
on a separate floor of the main council building. The offices are
computerised although each directorate has its own separate IT
system. The council is run by an executive team made up of the five
directorate heads and Mick Hartford the CEO.
▪ Housing and Adult Social Care
▪ Children, Schools and Families
▪ Culture and Environment
▪ Central Services
▪ Chief Executive’s Department

Promotion within the council has traditionally been based on length of
service and evidence of consistent, reliable adherence to duty. Staff
are expected to work within the existing systems, defer to those
above them in the hierarchy and dress formally at all times. Senior
staff are provided with reserved parking places and private offices
and mainly communicate with their teams by email. There is little
communication between the directorates below the executive level
and most decisions have to be authorised by senior management.
Care for older people
Colswell City Council is aware of the growing importance of the
provision of services for older people within the city. Government
statistics show that an ageing population tends to have a higher
prevalence of chronic diseases, physical disabilities, mental health
problems and other medical disorders.
The Housing and Adult Social Care directorate is under increasing
pressure as the numbers of older people increase and the funds
65
available are squeezed further. Staff are overworked and have little
time for individual clients. The cabinet has therefore decided to form
a specific Social Care and Housing for Older People (SCHOP) division
within the Housing and Adult Social Care directorate. It is to be fully
operational by the end of the financial year.
The need to achieve more with less will require innovative solutions
to the problems faced by the division. Its role will be to control the
expenditure budgets for social care and housing for older people and
ensure they are helped to live fulfilling daily lives.
The division will be run by David Elsworth, currently a senior staff
member within the Housing and Adult Social Care directorate. It will
be staffed by a mix of existing directorate staff and new employees
and will need to work in partnership with other parts of the council
as well as other organisations within the city. The intention is to
locate the division in a recently acquired office block next door to the
main council offices.
The budget for the reorganisation is £200 000 and the new division
is to be fully operational by December 2016.
The council strategy for older people (based on the government’s
national health and wellbeing outcomes) is to improve the health of
older people and to reduce the inequalities they experience.
Stated outcomes include:
▪ Greater empowerment and independence for older people
▪ Greater access to all services and equality of access for older

people
▪ Greater social inclusion of older people

One particular area of the strategy concerns the living arrangements
of older people:
▪ Older people, including those with disabilities or long term

conditions, or who are frail, should be able to live, as far as
reasonably practicable, independently and at home or in a
homely setting in their community.
▪ Older people should retain as much control of their own lives as

possible including in decisions about their care and support.
Living at home
For those who wish to remain in their own homes, the council need
to ensure that there is a wide enough range of support services
66
available to facilitate their wish. This would include services such as

home adaptations, home care visits by medical professionals and
community transport.
One service which is currently provided directly by the council is the
‘meals on wheels’ service. The catering service cooks, packages and
delivers a hot daily meal to each eligible household in the city. In a
bid to save money, Colswell Council is now planning to put the
service up for tender. The in-house service intends to bid for the
work but is aware that it may be awarded to an external provider.
Frailty, ill health and dementia
For older people living in Colswell who are unable to look after
themselves at home as a result of frailty, ill health or dementia, the
council has to ensure that there is an appropriate range of
residential care available in the city to suit their differing needs.
Some may require residential support only, some also need nursing
care and whilst others require specialist dementia care.
Funding
The council provides financial assistance for the elderly residents
requiring a care-home place at a rate dependent on their level of
financial capital. Older people are free to select their own nursing
home from those available in the city and their funding allowance is
paid by the council direct to the provider. If the cost of the home
they choose exceeds the level of assistance provided by the council
they will need to pay the additional costs from their own funds.
Current provision
There a number of care homes in the city, many run and managed
by the council. The council holds a list of the non-council run homes
it has vetted and approved although older people are free to choose
any care home they wish. Of these, some are privately run, some
are council run, some are run by independent not-for-profit
organisations and some are run by specific charities (such as the war
veterans society).
However the current level of provision is insufficient for the growing
numbers of older people in Colswell. A commissioning group has
been set up within the SCHOP division to look at how the home care
needs of the older population can be best met over the coming years.
67
Exercise solutions
Exercise Solution 2.1

Hartshap
In this example there are not many key stakeholders to be included
- the board may well employ new staff to replace those working in
the existing chain and if the hotels close during the refurbishment
there will be no need for a ‘business as usual’ team of staff.
However they should include:
▪ Representatives from those in charge of the existing hotels if

they are to remain with the firm after the relaunch
▪ Any retained restaurant staff who will have to oversee the

changes
▪ A representative from the advertising company they have

appointed
▪ As soon as possible a representative from the IT contractor

chosen should also be involved
▪ Given the importance of the restaurant relaunch it would be

usual to include a high profile ‘chef consultant’ to the
programme board
▪ The board may also wish to have an advisor who understands

the needs of customers (such as a representative from QualHol
magazine) when developing the programme.
Cloud Airlines
The number of key stakeholders here is much larger. Review the list
below – without the support of all these groups, the airline will
struggle to achieve its aims. All these groups should therefore be
involved from the very beginning of the programme.
▪ A member of the Shanland government (from the department

responsible for travel)
▪ A representative from Songline Alliance
▪ A member of the baggage handling team
▪ A member of the flight catering team
68
▪ A member of the CAE board since the flights will be operated

out of Europe – they will have relevant knowledge and expertise
▪ An official from the city of Tadnow
▪ Those appointed to the board of CAU who will be responsible for

US side of the operations
▪ Those responsible for procurement, flight scheduling, marketing

etc.
Pawton
The key point to note about the Pawton stakeholders is that many of
them are currently happy with the status quo. This will be a major
issue for the programme manager to handle:
▪ Member of the government department
▪ Representatives from several of the fire and rescue services

(some each from metropolitan, rural and mixed areas)
▪ Representatives from the local fire authorities
▪ Experienced call handlers
▪ Staff with specific experience of dealing with national

emergencies
▪ As soon as possible members of the IT firm who will be

developing the system
69

Cloud Airlines:
Objective: To rank in the top 15 transatlantic airlines within the next
10 years.
Vision: An efficient and competitively priced transatlantic airline with
a reputation for excellence
Benefits: Competitive position in the transatlantic market, increased
revenues
Outcomes: Transatlantic capacity, increased baggage handling and
catering capacity, efficient systems, competitive prices
Outputs: Bases in New York and Washington, transatlantic terminal
building in Tadnow, award of new in-flight catering contracts,
purchase of new aircraft, employment of additional flight staff etc.
Capabilities: Sell flights within the US, service transatlantic flights
within Europe, provide sufficient catering to service all flights etc.
Pawton government:
Objective: To be able to provide a fast and effective coordinated
response in the case of national emergencies.
Vision: An efficient integrated national fire and rescue service
coordinated from nine networked control centres with sufficient
capacity across the 46 services to deal effectively with national
emergencies
Benefits: Simpler coordination, faster mobilisation, more effective
responses to emergency situations, efficiency savings,
Outcomes: Streamlined working practices across all 46 national
services, Emergency calls routed through the regional control
centres and out to appropriate fire service, Location of all fire
response vehicles known at all times, Communication systems to all
services linked to regional control centres
Outputs: Nine networked regional control centres, IT system to
handle calls and direct operations, development of standardised
working practices
Capabilities: Route emergency calls through regional centres, direct
all 46 fire services from the regional centres, operate agreed
working processes where different teams from different services are
working together, direct multiple services at once.
70
Exercise Solution 2.
71
The programme mandate for Hartshap Hotel would contain:
▪ Strategic objective – to reposition as an upmarket brand and

recover profitability
▪ Framework – currently the chain has lost focus and standards

have fallen. This has led to a fall in profits and shareholders
have demanded change. The programme is designed to refocus
the brand, create a consistent luxury image and so improve
both margins and customer numbers
▪ Critical success factors – customer numbers, margins, brand

image and customer loyalty
▪ Initiatives and delivery strategies – the plan is to refurbish the

current hotels, build a new flagship hotel in Kravej, and offer a
fine dining experience. It is envisaged that several hotels will
be updated at once.
▪ Improvements – should include a simpler website, the

introduction of an attractive loyalty scheme, a consistent
marketing message and a high quality, high margin offering
▪ Initial budget – £85m

You should note how much this is just a high-level summary – it is
enough to excite the interest of the stakeholders but contains little in
the way of detail.
71

Programme brief for the Pawton fire and rescue programme would
include:
▪ A description of the new integrated national control system

envisaged
▪ The benefits anticipated in terms of national response ability,

increased local efficiency and improved capacity
▪ The estimated cost of £120 million, savings of £86 million and

the timescale of five years.
▪ A clear description of how the different systems currently

operate including a picture of the current good working
relationships as well as the problems with operational capacity
and coordination.
▪ A description of how a national response to a crisis is carried out

under the current system (the do nothing option) and any other
ways in which a better national response could be achieved
(perhaps looking at the way it is carried out in other countries)
▪ A description of the regional control centres, the IT system

envisaged, the standardisation of processes and the new
training required
▪ Risks which should already be evident would include:

− The complexity and spiralling costs associated with many
IT projects
− The government minister’s keenness to see the programme
implemented even before the planning has started – this
may mean there is an optimism bias associated with the IT
system and it may end up costing significantly more than
the £120 million forecast
− The government does not control the fire and rescue
services which it expects to use the new system. This
means it is completely reliant on their willingness to
engage with the programme’s objectives. It is not clear
what the local services would get out of the programme.
72

Welcome to the new look Hartshap Hotel Chain – where luxury is at
the heart of all we do.
Our multi-million pound makeover has transformed our business
from a mid-range holiday hotel chain to a group of luxury
destination hotels.
From our new flagship hotel in Kravej to our fully refurbished
designer hotels across Europe we offer elegant rooms, gourmet local
cuisine and a five star service.
It takes just moments to book with us on-line and we offer an
extremely attractive loyalty scheme for our much valued regular
customers.
73
Exercise Solution 2. 6
Hartshap Hotel Chain
Commercial
By moving upmarket the chain may lose some of their current
customer base. They will need to ensure that there is sufficient
demand for the upgraded hotels to offset that loss. Other high end
hotels may retaliate in some countries by pricing more competitively
or offering additional benefits (free transport to and from airports /
stations etc.). The chain must be prepared to amend their own
offering to ensure they can win the business they need to maintain
revenues.
Risks
Moving further upmarket should reduce the impact on the hotel
chain of any changes in the economic environments in which it
operates as buyers of very high end goods and services are usually
less price sensitive than those hunting for bargains.
However there are a number of risks to be considered: Are the
quotes for the different refurbishments reliable? How many of the
projects are fixed price? What would the impact of exchange rate
fluctuations be on the work carried out on those hotels outside the
EU? Do any of the projects require the injection of debt finance and
what would this do to the gearing ratio of the company?
Returns
The projects are all focused on improving the prices that can be
charged by the chain for rooms, meals etc. However care must be
taken to ensure that the costs associated with the projects are
controlled. Increasing revenues will not improve margins unless
costs do not increase by the same amount. This is particularly
important as many of the projects – such as revamping the website
and strengthening the brand will not have directly associated
revenues. An NPV should be calculated for the individual projects
within the projects dossier and for the dossier as a whole.
Resources
There are a number of resource considerations:
Does the chain have sufficient financial resources to upgrade two
hotels in each country at the same time as well as building the hotel
in Kravej or will the work need to be staggered? This is of particular
importance as whilst they are closed the chain will be losing income.
74
Does the company already have relationships with contractors it can

trust – if not how long with the procurement process take?
Is the advertising company big enough and sufficiently experienced
to be able to launch an international brand campaign?
Objectives
The programme vision statement is to shift its market position
upmarket and so improve profitability. The first part of this is clearly
supported by the projects. As mentioned above, it is important to
control the cost of the changes to ensure that the second part is also
achieved. It is this improved profitability which will be the sole focus
of the shareholders who are driving the programme.
Consistency
There is no mention made of ‘business as usual’. However it will be
important to consider the impact of the upgrading process on those
hotels that have not yet been redone. How will customers respond
to the poorer quality? What is the impact on the prices that can be
charged in these lower quality hotels? How will the marketing
message deal with this mismatch?
75
77 Mansell Street
London E1 8AN
+ 44 (0)20 75435600
Email: studentsupport@cipfa.org
Website: www.cipfa.org

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BUSINESS AND CHANGE MANAGEMENT

Updated December 2021

First published 2016

Copyright © 2020 Chartered Institute of Public Finance and Accountancy

2.16.4 Planning the programme tranches ............................ 37

Learning outcomes and content

▪ Distinction between projects and programmes

▪ The importance of stakeholders

▪ Link to organisational objectives

▪ Managing the tranches

▪ Delivering the capability (overview only)

▪ Realising the benefits

2.1 Managing programmes

2.2 Topic overview diagram

Purpose Creation Governance

Definition Sponsorship Mandate Risks and issues

Stakeholder Quality and

Identifying a Defining a Manage and Close

Programme brief Programme Managing the

2.3 Programme: definition and features

▪ Temporary – a programme is undertaken to achieve given

▪ Flexible – a programme is not a fixed plan – it is constantly

▪ Coordinated – a key skill in programme management is deciding

▪ Related projects and activities – the outputs from a number of

▪ Outcomes and benefits – a project is designed to produce a

▪ Strategic – a programme is a significant, whole organisation

▪ Temporary – the programme is expected to take five years but

▪ Flexible – the programme’s aim is the development of an

▪ Coordinated – there are three core parts to the fire service

▪ Related projects and activities – the outputs from each of the

▪ Outcomes and benefits – the aim of the programme is effective

2.4 Distinction between projects and

▪ A programme will run for longer than individual projects. The

▪ Programme objectives cannot be realised with the outputs of a

▪ A decision must be made to close the programme. At this point,

2.5 The importance of stakeholders

A programme will only be successful if it has the full support of the

▪ The programme sponsors who must approve all major decisions

▪ Other organisations involved in the change.

▪ The operational staff who will need to implement the changes

The leadership and engagement of stakeholders is covered across

▪ The techniques involved in identifying and managing

▪ The development of a communications plan for a project is

▪ The tasks of leading and motivating staff through a change

2.6 How a programme achieves organisational

The diagram can be explained using the example of the Hartshap

▪ Objective: The objective of the chain is to shift its market

▪ Benefits: The executive board want the programme to deliver

▪ Outcomes: To become a luxury chain will require outcomes such

▪ Outputs: The specific outputs for each of the projects, when

▪ Capabilities: To provide just one example from the outputs

2.7 Sponsoring the programme

achieving the strategic goal the programme is designed to achieve

2.8 Programme mandate

At this stage the programme is very much just an idea – no detailed

▪ The strategic objectives of the programme

▪ How the programme fits into the organisation’s strategic

▪ The critical success factors against which its performance will be

▪ Anticipated initiatives for inclusion and possible strategies for

▪ The improvements or capabilities that are expected

▪ An initial (and highly estimated) budget

2.9 The transformational flow of programme

The aim of this workbook is to explain what is involved in each of the