Unlocking Value Program Investments Client Deck PRM

Unlocking the value of
your program investments
Presentation to:
Content
► How can you unlock the value of your program investments?. ...2
► 1: Are you are doing the right projects?.....................................10
► 2: Are you ready to run a major project?....................................17
► 3: Is your project set up for success?.........................................21
► 4: How well are your important projects doing?.........................27
► 5: Are your people aligned toward success?.............................30
► How can EY help?......................................................................33
Page 2 Unlocking the value of your program investments

How can you unlock the value of your program
investments?

The challenge
► Companies continue to be challenged in executing complex

projects - both the complexity of programs and the costs of
failure have gone up
► Approximately US$682 billion is wasted on
underperforming projects across the globe annually.
► This wasted amount of project costs, unrealized benefits and
team “burnout” is both unfortunate and unnecessary.

Project success leads to competitive advantage
► Unlocking the full potential of an organization’s program

investment has a direct impact on market competitiveness
► Organizations that are successful in delivering large and complex
programs outperform their competition in the market
► Senior management can have a profound impact on their most important
company project and thus the company’s business success
► Project success goes beyond just the short-term focus of costs,
schedules and immediate benefits.
It requires:
► Having the right information to decide what projects to develop that are
aligned with the organization's strategy
► The ability to execute
► The capacity to absorb the changes to the full effect.

Doing the right things
Organizational success requires expanding beyond “doing things

right” to include “doing the right things”
Description Key objective Key activities
► Strategic-fit/
A group of programs and/or projects managed alignment

Portfolio
in a coordinated way to support business

Doing ► Governance
strategy and to deliver benefits in line with the right ► Agility

► Financials/
strategic objectives. things
Portfolio investments
management
A set of interrelated projects, managed
Program
► Verification and
in a coordinated way to attain the Realizing
selected program’s business objectives Program validation
the ► Prioritization
and benefits. management benefits ► Resources
► Scope
A project is a temporary
Project
Doing
endeavor to create a unique Project ► Quality
things ► Cost
product, service or result. management
right ► Time

Obtaining the right information
To understand when and where projects get off track, and the
interdependency of the root causes of issues and risks that result
in poor project performance, you need to:
► Identify the right projects to undertake
► Assess whether you are ready to execute them
► Predict where they will struggle
► Identify the root causes of current issues
► Determine if the project team is aligned to your executives’
definition of success
► What decisions and actions are needed.

Asking the right questions
Obtaining the right information begins with asking the right

questions:
► Are you doing the right projects?
► Are you ready to run a major project?
► Is your project set up for success?
► How well are your important projects doing?
► Are your people aligned toward success?
This will enable senior management to take a leadership approach
that is proactive, comprehensive and strategic.
► To be successful, the new way of managing strategic projects must be
ingrained within all levels of the business and project structures.

Understanding the program lifecycle
Achieving initiative success requires understanding the entire

program life cycle
► A misstep at any major phase along the way can have significant
consequences, affecting performance and the achievement of planned
outcomes.
► We continue to see inadequate techniques being applied, lacking focus, and
disjointed management along the full continuum.
By understanding where and how programs and project get off-

track in delivering their value, you can proactively balance an early
mitigating response.
► EY has identified a series of processes and tools that will aid in improving
program investment performance and delivering better value, with fewer
surprises.

The program and project continuum

Question 1: Are you are doing the right
projects?

Screening for project innovation value
You can’t stay still in today’s fast moving business world -

successfully executing innovative projects will help you stay
ahead of your competition
However, just successful execution is insufficient — first,
organizations must choose the right projects in which to invest.
► The key to identifying project potential is to have the right processes and tools
in place to sift through all the project ideas to predict which projects are most
likely to be successful.
► Inserting a pre-portfolio screening process and having a balanced
management criteria is essential to the portfolio governance process.

Measuring inventive merit
Analysis provides a balanced view that measures not only the

quality and significance of the idea itself, but puts it into a larger
context for a more informed decision prior to the business case
being developed.
Measuring inventive merit entails the examination of four areas:
► Inventive concept
► Embodiment merit
► Operational practice
► Market dynamics

Inventive merit analysis
Using inventive merit analysis across multiple project proposals to

assist in determining what aspects of a project should be changed
to increase its chance of success and which projects are strong
candidates for business case development.
The two diagrams illustrate the concept of a balanced inventive merit view.

Measuring project value and alignment with
business strategy
► It is important to identify inappropriate projects that do not

support the corporate strategy and are not adding value
► These projects are at an increased risk of failure and may limit the capital
that is available to undertake more appropriate projects with higher
inventive merit and reward
► Without a mature portfolio management process in place, the

strategic alignment of programs and projects is in doubt
► The organization may be able to deliver projects on time and within
budget, but the value delivered from those projects is not aligned to the
organization’s strategy

Problems with portfolio management
Organizations struggle with keeping their portfolio under control:

► They have too many projects running at the same time that ultimately do
not deliver the expected results because of a lack of focus or lack of
resources and underperformance
► Their strategic objectives are not supported by a project or program
► They have wasted investment in a project or program that is not aligned to
strategic objectives
► EY utilizes project portfolio management tools, processes and

techniques to assist you in balancing your portfolio of projects -
examining multiple metrics within financial, benefit, status,
alignment and economic value areas.
► This helps you identify what must be done to achieve your strategic goals

Project portfolio analysis
EY’s project portfolio analysis tool assists in identifying those

projects in the portfolio that should be continued and accelerated.
Importantly, also candidates to be stopped.

Question 2: Are you ready to run a major
project?

Complexity drives risk
Prior to starting a project, organizations often fail to understand

the complexity and residual risks of that project
► Companies that do not take complexity into account may be
able to execute smaller projects successfully, but struggle with
the unique dynamics of larger, more complex projects.
► The project’s governance, processes and controls, and the
project team’s capability to adapt to that complexity, will
determine the residual risk of the project and have a direct
impact on the success of the project.
► The goal should not be to reduce the complexity of the
program, but to reduce the risk associated with that complexity
— the residual risk of the project.

Measuring complexity and residual risk of
the project
The approach should be to adapt the projects’ governance,

controls and processes, as well as the team’s maturity, to address
the specific areas that are driving complexity (therefore risk) within
the project, including:
► Team constituents
► Suppliers
► Time
► Organizational change
► Scope
► Development
The aim is to discover the areas where residual risks remain and
can therefore be proactively addressed.

Complexity analysis
EY’s complexity analysis toolset measures 17 factors of complexity.

Question 3: Is your project set up for success?

Predicting project challenges
The foundation for a successful program is set before the project

even starts!
► Based on the analysis of key startup areas, future challenges
can be predicted
► A lack of addressing, or taking shortcuts, in crucial startup
areas can have a significant impact on project success
► Unsuccessful organizations tend to wait until symptoms of unresolved
risks and issues actually arise, then react by “firefighting” with problem
solving and decision-making.
► Adjustments made to the project early in the project’s life cycle
offer more options to address anticipated risks and are less
costly to implement

Insights gained from predictive risk analysis
Predictive risk analysis provides insight into:

► Areas that introduce risks
► These areas will have a negative impact on the project and should be the
focus of mitigation plans
► Areas that mitigate risks
► These areas will have a positive impact on the project and should be
maintained and, if possible, strengthened
► Risk neutral areas
► These areas will have a marginal impact to the project, but this is often
where low-effort improvements can have a high impact on success

Predictive risk analysis
EY’s predictive risk analysis tool helps determine areas that

should be strengthened to stop introducing risk and areas that
should be maintained to continue to mitigate risk.

Impact on project success prediction
When it is determined which areas are introducing risk, the impact

on project success can be predicted
► EY uses six primary factors that define success and have to be
considered in trade-off decisions for a project:
1. Time,
2. Cost
3. Benefits
4. Scope
5. Quality
6. team organization

Predicted risk impact
EY’s toolset assists in predicting the impact of the areas that are
introducing risks (the impact of the predictive risk analysis)

Question 4: How well are your important
projects doing?

Measuring the risk state of your project
► Key stakeholders need accurate, relevant information so they

can make effective decisions to mitigate risks and improve
project success.
► Most project status reporting does not give leadership a true
picture of how a project is doing until it is too late
► Political pressure to keep a project in a “green” status
► Distortion of information between the work stream level and the executive
reporting level
► Lack of transparency leads to unwarranted optimism of success
► Determining the true risk state of the project involves looking
objectively at both a non-distorted view of the current state
performance across several dimensions, and at a foreword
predictive view.

EY’s “Cube” framework
Risk interdependencies are identified across several dimensions.
Risks or issues identified that require management

attention and have a direct impact on planned outcomes
Risks or issues identified: processes must be adjusted
and greater emphasis is required
Minor or no issues identified: does not require
management attention

Question 5: Are your people aligned toward
success?

Measuring priority and empowerment alignment
It is critical that priorities are aligned throughout the project so

that the project team makes decisions that are aligned with the
leadership’s definition of success.
What happens when alignment is poor:
► Decisions are revisited and overturned as stakeholders with higher
authority change decisions to align with their own priorities
► Decisions are delayed as the team tries to get consensus among
stakeholders with competing priorities.
► The team becomes frustrated and refuses to make decisions that they
are responsible for - delaying risk and issue escalation
► The team start making decisions not aligned with the overall project
success.

Priority alignment
analysis
EY’s framework helps to

determine if a priority
misalignment exists within and
across governance tiers that
could lead to decision-making
disconnects on the project

How can EY help?

Successfully executing
innovative projects will drive
competitive advantage
The ability to have a forward-looking

view of risks and being able to predict
the impact of those risks will allow
your organization to proactively
manage projects.

Taking early action
The early identification of necessary corrective actions and

predictive risks leads to greater control of program performance
and accelerated benefits achievement, resulting in:
► • Reduced project cost
► • Reduced project time

► • Increased benefit realization
► • Improved time to benefits

► • Improved return on capital investments
► • Increased competitive posture

EY can help your organization regain control of
your programs
We provide a holistic risk view, from project selection to portfolio

development, to project planning and through project execution,
will help you unlock the value of your program investments.
We can assist in:
► Undertaking reviews to provide a comprehensive view of your
organization’s risk position to support effective risk management
► Developing a prioritized road map
► Providing support or assistance in addressing critical areas that will have
the greatest positive impact
► Aligning programs with your organization’s business strategy and risk
tolerance
► Strengthening your organization’s ability to successfully deliver large,
complex projects

EY’s Risk Advisory services
For EY Advisory, a better working world means solving big, complex industry
issues and capitalizing on opportunities to help deliver outcomes that grow,
optimize and protect our clients’ businesses.
Our understanding of the issues around risk – about the risks you can see as well
as the ones you can’t – inspire us to ask better questions. By teaming globally
with you we co-create more innovative answers that help you see risk
management as a means to accelerate your performance.
With 40,000 consultants and industry professionals across more than 150
countries, we work with you to help address your most complex industry issues,
from strategy to execution.
EY consultants develop trusted relationships with clients across the C-suite,
functions and business unit leadership levels, from Fortune 100 multinationals to
leading disruptive innovators.
Together, we help you deliver better outcomes and long-lasting results,
from strategy to execution.
Page 38 Predictive analytics

About EY
In a world of unprecedented change, EY Advisory believes a better working world

means solving big, complex industry issues and capitalizing on opportunities to
help deliver outcomes that grow, optimize and protect clients’ businesses.
From C-suite and functional leaders of Fortune 100 multinationals to disruptive
innovators and emerging market small and medium sized enterprises, EY
Advisory teams with clients - from strategy through execution - to help them
design better outcomes and deliver long-lasting results.
A global mindset, diversity and collaborative culture inspires EY consultants to
ask better questions. They work with the client, as well as an ecosystem of
internal and external experts, to co-create more innovative answers.
Together, EY helps clients’ businesses work better.
The better the question. The better the answer. The better the
world works.
Further information
See the full report: Unlocking the value of

your program investments: how predictive
analytics can help in achieving successful
outcomes on: www.ey.com/PRM
For further GRC thought leadership, please

refer to our Insights on governance, risk and
compliance series on:
www.ey.com/GRCinsights
To discuss unlocking the value of your program

investments further, please contact your
EY representative:
Name & contact details HERE

Want to learn more?
Please visit our Insights on governance, risk and compliance series at ey.com/GRCinsights
Portfolio management Building confidence in executing Predicting project risks improves

transformation: IT programs: success:
How to effectively screen and How proactive program risk How predictive analytics provides
align your program portfolio management provides warranted the insight to unlock the value of
with strategic objectives confidence in achieving program your program investments
success
www.ey.com/portfoliomanage www.ey.com/predictingrisk
www.ey.com/ITprm
Cyber program management: Expecting more from risk Maximizing value from
identifying ways to get ahead of management: your lines of defense:
cybercrime drive business results through a pragmatic approach to
harnessing uncertainty establishing and optimizing
www.ey.com/CPM your LOD model
www.ey.com/REPM
www.ey.com/LOD
Centralized operations: Building trust in the cloud:

Get ahead of cybercrime: the future of operating models for creating confidence in your cloud
EY’s Global Information Risk, Control and Compliance ecosystem
Security Survey 2014 functions
http://www.ey.com/GISS2014 www.ey.com/cloudtrust
www.ey.com/GISS2014 www.ey.com/centralops
Page 41 Achieving resilience in the cyber ecosystem

Thank you
EY | Assurance | Tax | Transactions | Advisory
Assurance | Tax | Transactions | Advisory
About EY
EY is a global leader in assurance, tax, transaction and advisory services. The
insights and quality services we deliver help build trust and confidence in the
capital markets and in economies the world over. We develop outstanding
leaders who team to deliver on our promises to all of our stakeholders. In so
doing, we play a critical role in building a better working world for our people,
for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the
member firms of Ernst & Young Global Limited, each of which is a separate
legal entity. Ernst & Young Global Limited, a UK company limited by guarantee,
does not provide services to clients. For more information about our
organization, please visit ey.com.
www.ey.com/GRCinsights

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Unlocking the value of

your program investments

Page 2 Unlocking the value of your program investments

Page 3 Unlocking the value of your program investments

► Companies continue to be challenged in executing complex

Page 4 Unlocking the value of your program investments

► Unlocking the full potential of an organization’s program

Page 5 Unlocking the value of your program investments

Organizational success requires expanding beyond “doing things

A group of programs and/or projects managed alignment

in a coordinated way to support business

strategy and to deliver benefits in line with the right ► Agility

Page 6 Unlocking the value of your program investments

Page 7 Unlocking the value of your program investments

Obtaining the right information begins with asking the right

Page 8 Unlocking the value of your program investments

Achieving initiative success requires understanding the entire

By understanding where and how programs and project get off-

Page 9 Unlocking the value of your program investments

Page 10 Unlocking the value of your program investments

Page 11 Unlocking the value of your program investments

You can’t stay still in today’s fast moving business world -

Page 12 Unlocking the value of your program investments

Analysis provides a balanced view that measures not only the

Page 13 Unlocking the value of your program investments

Using inventive merit analysis across multiple project proposals to

Page 14 Unlocking the value of your program investments

► It is important to identify inappropriate projects that do not

► Without a mature portfolio management process in place, the

Page 15 Unlocking the value of your program investments

Organizations struggle with keeping their portfolio under control:

► EY utilizes project portfolio management tools, processes and

Page 16 Unlocking the value of your program investments

EY’s project portfolio analysis tool assists in identifying those

Page 17 Unlocking the value of your program investments

Page 18 Unlocking the value of your program investments

Prior to starting a project, organizations often fail to understand

Page 19 Unlocking the value of your program investments

The approach should be to adapt the projects’ governance,

Page 20 Unlocking the value of your program investments

EY’s complexity analysis toolset measures 17 factors of complexity.

Page 21 Unlocking the value of your program investments

Page 22 Unlocking the value of your program investments

The foundation for a successful program is set before the project

Page 23 Unlocking the value of your program investments

Predictive risk analysis provides insight into:

Page 24 Unlocking the value of your program investments

EY’s predictive risk analysis tool helps determine areas that

Page 25 Unlocking the value of your program investments

When it is determined which areas are introducing risk, the impact

Page 26 Unlocking the value of your program investments

Page 27 Unlocking the value of your program investments

Page 28 Unlocking the value of your program investments

► Key stakeholders need accurate, relevant information so they

Page 29 Unlocking the value of your program investments

Risk interdependencies are identified across several dimensions.

Risks or issues identified that require management

Page 30 Unlocking the value of your program investments

Page 31 Unlocking the value of your program investments

It is critical that priorities are aligned throughout the project so

Page 32 Unlocking the value of your program investments

EY’s framework helps to