2. Benefits Analysis & WinWin Negotiations Nupul Kukreja 16 th September 2013 1

4. Agenda Part 1: Benefits Analysis – Deficiencies of Project Management Mindset – Evolution of IT Applications – Adoption of Program Management Mindset – Program Model – Benefits/Results Chain Part 2: WinWin Negotiations – WIOA Model of Negotiations – WinWin Sessions in 577 3

5. Agenda: VBSE 4+1 View Theory-W: SCS Win-Win Dependency Theory Utility Theory Decision Theory Control Theory 1. Protagonist goals 3a. Solution Exploration 7. Risk, opportunity, change management 2. Identify SCS 2a. Results chains 3b, 5a, 7b. Cost/schedule/ performance tradeoffs 3b, 7a. Solution Analysis 5a, 7b. Options, solution development & analysis 3. SCS Value Propositions (Win Conditions) 4. SCS expectations management 5a, 7b. Prototyping 6, 7c. Refine, execute, monitor & control plans 6a, 7c. State measurement, prediction correction; Milestone synchronization 5a. Investment analysis, Risk analysis 5. SCS WinWin Negotiation 4

6. Project Management “The project was delivered on time and within budget and scope and thus was a resounding success” What’s wrong with the above claim? – Difficult to ascertain if the project was indeed beneficial to the clients/stakeholders – Just delivering the project doesn’t guarantee benefits – Benefits don’t turn on automatically after project delivery – Parochial IT-centric view i.e. delivery of IT system is the start-all and end-all 5

7. ‘Silver Bullet’ Thinking Belief in the power of IT alone to deliver business results Businesses purchase/install/create complex IT “silver bullet” packages with the belief of “benefits found inside” IT applications have evolved from simple automated systems to complex IT-enabled business transformations – demands new approach to management 6

8. Evolution of IT Applications 7

9. Automation of Work ImpactBenefitExamples Getting Work Done Doing the same thing more efficiently Operational Efficiency Payroll Processing Census data calculations Check Processing Basic Order Processing Basic Airline Reservation Systems etc., Few manual jobs were automated and few new jobs created Limited change to people’s jobs or to business processes Overall change to nature of work not significant Learning requirements: simple and focused on technology use If the application ran correctly most of the benefits would be realized Designed, operated and managed by IT experts 8

10. Information Management - 1 ImpactBenefitExamples Restructuring work and work processes Doing things differently Operational and Tactical Effectiveness Customer Information Systems (CRMs etc.) Airline Yield Management Systems Executive Information Systems Information was by-product of automated applications Information used to make operational/tactical/strategic decisions owing to the proliferation of desktop computers Slight change of jobs with training for taking predetermined action based on information More Information  Benefits gained from analysis and application of information the job 9

11. Information Management - 2 Automated information bases provided opportunities for designing new products – Mutual Funds – Discount Plans – Coupons etc. Delivering a correctly functioning application no longer sufficient. For benefits to be realized: – Nature of people’s work changed – Business processes restructured and better integrated – Change in reward systems – Significant learning other than just technical usage Increased number of potential IT applications (many conceived outside IT by business managers etc.) 10

12. Business Transformation ImpactBenefitExamples (re)Defining the business Doing different things Changing the business/ industry rules Strategic Effectiveness and Positioning Just-in-time (JIT) inventory systems E-commerce OLAP Information management applications enable organizations to rethink and redesign their business processes and how they carry out business Example(s): Internet and virtual banking redefining financial industry Airlines offering passengers direct access to reservations systems Amazon.com 11

13. Strategic Importance of IT High Low 12 Evolution of IT Applications

14. Linkage Alignment of IT with Business Strategy Integration with initiatives in other areas of business to realize benefits Price of Forgetting: Lack of identification and understanding of benefits & overlapping initiatives Project scope inflation Lack of clear contribution to benefits Reach Breadth of change required by IT investment Impact (depth) of change Price of Forgetting: Underestimation extent of change Lack of buy-in and finger-pointing Lack of understanding cross-functional implications People Those affected by change and their readiness for it Understanding current competencies and know-how of change Price of Forgetting: “One size fits all” mentality Underestimated training effort Resistance to change Time Realistic length of time for all changes to occur and benefits to be realized Based on the other 3 dimensions in the table Price of Forgetting: Unrealistic/unachievable expectations Unexpected time lags between delivery and realization of benefits Traditional Project Management Blindspots 13

16. Key Takeaways ‘IT’ by itself, no matter how technically powerful cannot deliver business results Benefits don’t just happen – benefits stream flows and evolves overtime as people learn to use the system Benefits rarely happen according to plan – initial forecast is only an estimate. One has to ‘keep checking’ them like financial assets Benefits realization is continuous process – involves envisioning results, implementing and checking intermediate results and dynamically adjusting path leading from investments to business benefits Paradigm shift required: – Project Management to Program Management 15

17. Paradigm Shift Project ManagementProgram Management Structured set of activities concerned with delivering a defined capability based on agreed budget/schedule Structure grouping of projects designed to produce clearly identified business results/benefits Typically IT focus i.e. project ends with delivery of technology IT delivery + training, marketing, organizational change, business process redesign IT accountable for benefitsBusiness responsible for benefits Projects deliver “automatic” benefits Projects deliver capabilities, programs deliver benefits Passive benefits realization: “Trusting the gods” to deliver the benefits Active benefits realization: Managing risks, exercising options at the right time by proactive change monitoring/management 16

18. Paradigm Shift - Examples “Project” Project Management Program Management Interactive website Focus on execution, design, development and delivery of “project” Concerned with inputs, costs, and time required to produce intermediate outcomes Includes all projects required to generate minimum number of hits and sales revenue target with 12 months of launch Installation of new software package (e.g. ERPs etc.) Initiatives to help business units achieve well-defined process improvement objectives in manufacturing, finance and sales in 12 months (say) Customer information system /Automated response system for a call center Staffing, training, marketing and launch projects to achieve clear operational, sales and profitability goals over first 24 months (say) 17

19. Program Model An ‘intermediate’ model to help articulate and capture ‘program vision’ Created to facilitate easy creation of the Results Chain Model Ease of use for communication amongst stakeholders Helps see the ‘broader vision’ and all encompassing view of the ‘program’ 18

20. Stakeholders (Who) Initiatives (What) Value Propositions (Why) Beneficiaries (For Whom) Who/what resources are required for ‘executing’ the initiatives Any ‘partner’ department or organization? What are the key activities that must be done to for delivering/ realizing the value propositions/ benefits? Do you need to hire anyone? Why undertake this project/ program? What are the value propositions you seek to satisfy/serve? What are the goals? Who derives value from the project/program? (Usually the customers or end users; can also be project sponsors) Assumptions: Under what assumptions is this model true? Program Model Initiatives that need to be undertaken to help beneficiaries derive value from the expected benefits/value propositions Initiatives that need to be undertaken to help deliver value to the beneficiaries (i.e. “how” will the benefits reach the beneficiaries?) 19

21. Assumptions: Under what assumptions is this model true? Program Model Stakeholders (Who) Initiatives (What) Value Propositions (Why) Beneficiaries (For Whom) Who/what resources are required for ‘executing’ the initiatives Do you need to ‘partner’ with another department or organization? Do you need to hire anyone? What are the key activities that must be done to for delivering/ realizing the value propositions/ benefits? Why undertake this project/ program? What are the value propositions you seek to satisfy/serve? What are the goals? Who derives value from the project/program? (Usually the customers or end users; can also be project sponsors) CostBenefits What are the ‘costs’ involved for successfully implementing the program? What are the measurable (tangible/intangible) benefits? 20

22. Assumptions Growing needs of volunteers Continuously growing volunteer pool Increasing activities requiring more volunteers Assumptions Growing needs of volunteers Continuously growing volunteer pool Increasing activities requiring more volunteers Example – Volunteer Management System Stakeholders (Who) Initiatives (What) Value Propositions (Why) Beneficiaries (For Whom)  Developers  Maintainer  IIV & V  Volunteer  Volunteer Coordinator  Supervisor  Develop new volunteer management system  Create web application outreach  Develop improved volunteer management process outreach  Provide training for new job management process  Deploy job management process  Setup work stations for volunteer use  Improved Productivity  Faster volunteer management and less person-to- person time  Improved volunteer management process  Volunteers  Volunteer coordinator  Supervisor 21

23. Assumptions Growing needs of volunteers Continuously growing volunteer pool Increasing activities requiring more volunteers Assumptions Growing needs of volunteers Continuously growing volunteer pool Increasing activities requiring more volunteers Stakeholders (Who) Initiatives (What) Value Propositions (Why) Beneficiaries (For Whom)  Developers  Maintainer  IIV & V  Volunteer  Volunteer Coordinator  Supervisor  Develop new volunteer management system  Create web application outreach  Develop improved volunteer management process outreach  Provide training for new job management process  Deploy job management process  Setup work stations for volunteer use  Improved Productivity  Faster volunteer management and less person-to- person time  Improved volunteer management process  Volunteers  Volunteer coordinator  Supervisor CostBenefits Development Costs, Maintenance Costs, Maintainer (admin hire), Web Server (hardware), Web Hosting, Oracle License etc. Decreased: Application Data Entry Time sheet data entry Job request time Job assignment time Increased volunteer applications

24. MEDIC-ated Value Propositions Articulate and capture Value Propositions/Goals to be measurable… …so that you’ll know “how much” to achieve AND if/when you’ve achieved them MEDIC-ated goals force early consideration of measurement influenced thinking: 23 M:Maintain (e.g.: a level of service maintained) E:Eliminate (a function eliminated) D:Decrease (turnaround time decreased) I:Increase (sales increased) C:Create (certain capability created)

25. Creating The Results Chain Directly derivable from Program Model Explicitly shows causal linkages between the various entities Makes explicit the 4 management blind-spots mentioned earlier Helps identify missing initiatives, stakeholders, benefits in the Program Model 24

26. Results Chain Diagram - Legend DMR/BRA* Results Chain INITIATIVE Implement a new order entry system Assumption(s): -Order to delivery time is an important buying criterion Contribution Reduce time to process order OUTCOME Reduced order processing cycle (intermediate outcome) OUTCOME Increased sales Contribution Reduce time to deliver product *DMR Consulting Group’s Benefits Realization Approach Stakeholder(s ) 25

27. Assumptions Growing needs of volunteers Continuously growing volunteer pool Increasing activities requiring more volunteers Assumptions Growing needs of volunteers Continuously growing volunteer pool Increasing activities requiring more volunteers Volunteer Management System – Program Model Stakeholders (Who) Initiatives (What) Value Propositions (Why) Beneficiaries (For Whom)  Developers  Maintainer  IIV & V  Volunteer  Volunteer Coordinator  Supervisor  Develop new volunteer management system  Create web application outreach  Develop improved volunteer management process outreach  Provide training for new job management process  Deploy job management process  Setup work stations for volunteer use  Provide data for transformation and migration process  Improved Productivity  Faster volunteer management and less person-to- person time  Improved volunteer management process  Volunteers  Volunteer coordinator  Supervisor 26

28. 27

29. Rules for Creating Results Chain Every initiative must be followed by an outcome/benefit Intermediate outcomes link to other intermediate outcomes (final outcome has no outgoing links) Initiatives/outcomes can link to more than one outcome Stakeholders are linked to the Initiatives Links are labeled with ‘contributions’ i.e. what does the particular initiative contribute towards attaining a particular benefit (use only if not explicit from context) The “graph” is fully connected (assumptions are shown in a separate disconnected box) Keep asking “so-what” for every outcome to uncover other outcomes and “what-else” to see if necessary initiatives are taken to realize the outcome(s) 28

30. Formalizing the Results Chain For each benefit that matters capture at least the following: – Metric: How will the benefit be measured? – Measurement Method: What is the process of capturing the metric? – Frequency: How frequently the benefit should be tracked? – Baseline Value: What’s the current (baseline) value of the benefit? – Target Value: What’s the target value ‘range’ of the benefit? – Target Date: By when should the target be realized? – Mitigation: Action(s) to take if target value isn’t achieved? – Accountability: Who’s responsible for helping realize the benefit? – Trend: How have the benefits realized over time? 29

33. Workshop Problem Statement USC needs an online course reservation system to automate the registration process and to use the registration data to understand which courses to offer when and to improve their overall course offerings thereby increasing quality of the program Get together in your teams and create: 1.Program Model 2.Results Chain Brainstorm with your team the various elements of the program model and convert it to a results chain Note the questions you may have or difficulties encountered Time: 10 minutes 32

34. Assumptions: Under what assumptions is this model true? Stakeholders (Who) Initiatives (What) Value Propositions (Why) Beneficiaries (For Whom) Who/what resources are required for ‘executing’ the initiatives Do you need to ‘partner’ with another department or organization? Do you need to hire anyone? What are the key activities that must be done to for delivering/ realizing the value propositions/ benefits? Why undertake this project/ program? What are the value propositions you seek to satisfy/serve? What are the goals? Who derives value from the project/program? (Usually the customers or end users; can also be project sponsors) 33 Problem Statement USC needs an online course reservation system to automate the registration process and to use the registration data to understand which courses to offer when, to improve their overall course offerings thereby increasing quality of the program

35. Workshop Q&A 34

36. Part 2: WinWin Negotiations 35

37. WinWin Taxonomy (a.k.a. WIOA Model) Win-Win Equilibrium: All win conditions covered by agreements No outstanding issues 36 Win Condition: Stakeholders’ desired objectives stated in a form understandable by users, customers and other stakeholders and formalized only where necessary Issue: captures conflicts between win conditions and their associated risks and uncertainties Option: candidate solutions to resolve an issue Agreement: captures shared commitment of stakeholders with regard to accepted win conditions or adopted options

38. We also capture a 3 rd dimension of “Relative Penalty” – Degree of project failure if WC not deilvered 1.Refine and expand negotiation topics 2.Collect stakeholders’ win conditions 3.Converge on win conditions 4.Define glossary of key terms 5.Prioritize win conditions on: Business Value vs. Ease of Realization 6.Reveal issues and constraints 7.Record issues and options 8.Negotiate agreements WinWin Negotiation Primer Shared taxonomy of topics to understand project scope Record first draft of stakeholder’s needs/wants for all to view Disambiguation and de-duplication Domain vocabulary to develop mutual understanding Degree of project success dependent on win condition Technological, social, political or economic feasibility Variance in prioritization provokes discussion of issues/constraints Issues recorded along with possible resolution tactics Mutually agree to win conditions/options 37 Above steps accelerated by a “Shaper” i.e. a facilitator who guides the negotiation

39. Logging Issues and Options There WILL be issues, constraints, uncertainties, risks associated with some of the win conditions These “issues” need to be resolved – with further discussion and logging the corresponding ‘options/alternatives’ for their resolution In case of multiple options/alternatives the most feasible and agreed to by all success critical stakeholders is considered an ‘official’ agreement Winbook provides facilities for the same 38

40. WinWin Equilibrium The state when: – All Win Conditions have been covered by agreements – No outstanding issues Provides a ‘heat map’ of the current state of negotiations: – RED: Win Conditions (WC)/Options not agreed to or issue not closed – GREEN: WCs/Options agreed to or issues closed – YELLOW/AMBER: WCs/Options marked as candidates for ‘potential agreement’  further discussion may be required Winbook provides capability to ‘see’ this heat map! Every new feature request, expectation, benefit MUST BE LOGGED into Winbook – helps in having an up to date view of the ‘heat’ map w.r.t., the current state of negotiations 39

41. WinWin Negotiation in 577 Two (possibly 3) sessions to be held in the coming week(s) (client required for only 2) – moderated by TAs Part 1: – Create Program Model – Capture Value Propositions (Benefits) in Winbook – High level breakdown of desired capabilities (top-level decomposition) – Capturing win conditions for various aspects of the desired system: functional, levels of service, project, budget, language/tools etc Part 2: – (Disambiguation/Deduplication before session) – Prioritize Win conditions (possibly broken into 2 sessions) – Revealing Issues/Constraints and other new win conditions and actually conducting the ‘negotiation’ 40

42. Winbook and WinWin Negotiations Based on the WinWin Negotiation Framework and directly supports the WIOA Model Winbook is a tool to ‘log’ the negotiation and show its ‘status’ as function of time “Functional” Win Conditions to be captured in the user- story format (As a, I can so that ) Dynamic prioritization of win conditions with sensitivity analysis capability Winbook Tutorial available on class-website under “Tools & Tutorials” WinWin Sessions are HUMAN centric and highly iterative. A tool like Winbook only helps ‘document/augment’ the process and not execute it 41

43. WinWin Participation The ENTIRE TEAM attends (includes clients ) DEN students and remote clients should “Skype” into the conference Set up an account on freescreensharing.net or join.me or TeamViewer etc., so as to share screen with remote participant(s) Bring your laptops to the session(s) – at least 3 laptops (You may check-out laptops from SAL) Be sure to practice the ‘setup’ prior to the session Feel free to bring snacks and drinks (no alcohol please ) 42

44. References The Information Paradox – John Thorp Business Model Canvas – Osterwalder & Pigneur Value-Based Software Engineering Biffl et. al. 43