FRAMEWORK FOR A STRATEGIC PRIORITY COUNCIL

Gherda Stephens August 2011

5. Financial 6. QuestionsSummary 1. Definitions 2. Framework 3. Structure 4. Process Flow

Framework for a Strategic Priority Council to provide leadership with ongoing business intelegence around existing and proposed projects/campaigns impacting the business environment to ensure prioritisation of proposed projects, campaigns and initiatives with the highest potential business value and according to the availability of resources to execute the projects, campaigns and initiatives

•Projects will go through an evaluation process whereafter it will be prioritised (ranked) according to Value for Money and Risk i.e. overall attractiveness

•By value for money is meant "the optimum combination of whole-life cost and quality, fitness for purpose to meet user requirements"

•A project is defined as a unique set of co-ordinated activities with a finite duration, defined cost and performance parameters and clear outputs to support specific business objectives

Definition of a PrioritisedProject

Definition of Value for Money

Definition of a Project

1. DEFINITIONS

KEY ISSUES

1. Duplication of project efforts2. Resources are not optimised3. Missing out on valuable

“Lessons Learnt” opportunities4. Overloading of Frontline Staff

with non-revenue generating tasks

PROPOSED SOLUTION

5. Establishment of a Strategic Priority Council to manage the portfolio of projects and to drive implementation of structured processes to ensure collaboration across functional project management teams in an effort to align efforts not only across business units, but also across various segments to ensure all strategies roll up to the organisation’s overall vision and strategy

The goal is to eliminate duplicated efforts and to prioritise activities based on resource capacity in the frontline

 

   

The main purpose of the council is to prioritise all frontline activities, based on resource capacity in the frontline

The council must create rules around what resource capacity should be used per month for different activities i.e. change, operations credit, sales, training, product launches etc.

The council will provide guidelines to ensure a clear understanding of how much time should be spend on what activities

2. PROPOSED FRAMEWORK

Capacity for Change

Capacity forCampaigns

2 1

3Capacity for BAU Activities

Frontline Capacity

Goal-oriented culture

•Employees see the value of their project work •Employees are focused and fast (previously dragged down in multiple, simultaneous projects of various values)•“Let’s do a great job on this one and move on to the next important project to move this organisation forward.”

Foundation for governance

•Provide Exco with a holistic view and recommendations to facilitate transparent decision-making •Clear linkages between goals & allocation of resources•Understood by sponsors and business

Strategic communications

•Discussions aren't just about how much a project will cost, but also about its anticipated risks and returns in relation to other projects. •This way, entire portfolios can be assembled to produce the highest returns based on current conditions.

STRATEGIC PRIORITY COUNCIL FRAMEWORK

Other Standing Members

Frontline Enablement

Project Sponsors

ChairmanGeneral Manage

r

Exco Member

Nat Manage

r

Head Implementatio

n

Exco Member

Head: Strategi

c Change

Exco Member

Exco Member

Head Implementatio

n

National

Manager

IT

3. STRUCTURE OF THE STRATEGIC PRIORITY COUNCIL

STEERCO ROLES AND RESPONSIBILITIES

Can identify all work currently being performed in the frontline– Status of working projects– Show resources involved– Provide key deliverables– Show inter-dependencies

Identify pending work– Use as a quick assessment of priorities– Use as a foundation for learning and improvement

Tie this together in an enterprise wide view– Provide ExCo with relative “up to date” information on all projects– Help evaluate and prioritize at internet speed

Change Council

COO Council

Sales Activation Council

Pricing Council

Strategic Priority Council

Regulatory

Sales Campaigns and other Revenue Producing

New Product Launches or Product Enhancement

Cost Reduction / Strategic Change

MAIN STAKEHOLDERS

Risk Council

12

Segments

4. PROCESS FLOW

• All activities and/or projects based on resource

capacity in the frontline are identified

• A Master Project List is created

• Able to contain all project work activities being

performed in the organisation

• A Summary Line for Each Project

• Listed in assigned order (numbered P001, P002 etc.)

• Schedule Status

• Value of the projects is identified

• At a glance view of project status– Drill down– Consistent status

• Issues are able to transcend projects

Projects will go through a prioritisation process whereby projects will be evaluated and ranked according to overall attractiveness

Components of the Processs

Strategic PriorityCouncil Framework

Master Financial List

Directory Structure

Master Project List

• Status of working projects & resources involved• Provide key deliverables• Show inter-dependencies• Contains all relevant documents

•Identical order to Master Project Lists• Identified status but from a financial perspective • Not necessarily an earned value proposition• Involved business case approval• Sub-project of a bigger corporate objective

•A "root” directory is defined & each project gets a unique number•A template is created to identify critical components•The PM is responsible for completing the template and publishing the project•End result is a library of projects within the portfolio

•Able to contain all project activities• Summary Line for Each Project in assigned order • Hyper link to project overview pg Rate and Rank then provide Recommendation (Dashboard) to Exco

Identify all projects impacting the business environment

High Level Prioritisation process

Apply Standardise Methodology to Score Projects

Prioritise Projects based on Value

and Risk

Categorise projects based on

prioritisation evaluation

Provide Recommendation

(Dashboard)

Strategic Alignment Financial Analysis Risk Assessment Regulatory/Mandatory

The guiding principles developed for the Group target operating model have been used as a basis to develop key questions to be asked when evaluating the Strategic alignment of a project.

The guiding statements are as follows:

Customer Centric Distribution Common Manufacturing Execution Excellence

Cash flows (current year plus next two years) will be analysed and the following ratio’s will be determined to evaluate a project’s financial feasibility:

NPV IRR BCR (Benefit Cost Ratio)

The overall risk of a project will be determined by :

Confidence level Extent of impact Resource requirements Complexity Degree of behaviour change System / Process compatibility ·Current Project Status ·Regulatory Requirement

Consideration and prioritisation is given to projects which are Regulatory/Mandatory in nature. These projects are evaluated and prioritised separately.

(Score out of10 (Highest is Priority (High/Medium/Low) (Yes/No)

5. Financial Analysis

Criteria # Guiding Principles 1* UOM Strategic Alignment: Rating Scale & Parameters

1 - Low 5 - Med 10 - High

Strategic Alignment

1 Client Centric Distribution Score out of 10 Negative Impact No Impact Positive Impact

2 Aligned to xyz Strategic Goals Score out of 10 Negative Impact No Impact Positive Impact

3 Execution Excellence Score out of 10 Negative Impact No Impact Positive Impact

Criteria # Criteria 2* UOMFinancial Analysis: Rating Scale & Parameters

3 - Low 2 - Meduim 1 - High

Financial Analysis

1 PV of Total Cash Out Cash Out 2 PV of Cash In over 4yr period Cash In 4 NPV of Cash Flow Value 5 IRR % 6 BCR (Benefit Cost Ratio) %

Criteria # Criteria 3* UOMRisk Assessment: Rating Scale & Parameters

1 - Low 2 - Meduim 3 - High

Risk Assessment

1 Operational Risk (Including level of complexity; resource requirements & capacity constraints in regions Impact Minimal Impact Moderate

Impact High Impact

2 Time to implement Years <1Yrs 1Yr to 2Yrs >2Yrs

3 Confidence Level of Cash flow Realisation % >50% Confidence 10% to 50% Confidence

<10% Confidence

Criteria # Criteria 4* UOM Regulatory/Mandatory: Rating Scale & Parameters

Regulatory / Mandatory 1

Consideration and prioritisation is given to projects which are Regulatory/Mandatory in nature. These projects are evaluated and prioritised separately.

Applicable Yes/No

6. Questions