FEATURE INTERVIEW: MAY 2012
The Importance of
Project Ambition and
Benefits
Helen Anthony meets David Pitchford, Head of the UK Government’s
Major Projects Authority.
Can you tell me a bit about
yourself and the context within
which you are working?
My role is Head of the UK
Government’s Major Projects
Authority (MPA) and Head of
Profession for Programme
Management. My overall aim is to
increase efficiency and effectiveness
in the administration of major projects
funded by the government. I have
been here for about two and a half
years and was brought here to do
this, initially to look specifically at how
we might improve the portfolio of
major projects and their outcomes by
increasing the benefits being
delivered as well as cutting
overspends and overruns. Benefits
realisation and measurement is one
part of this.
We have set up an entirely new
approach and for the first time in UK
government we have established an
operating portfolio of major projects
under the MPA. Importantly, this
operates under a full and formal
mandate from the Prime Minister.
This mandate sets out the powers
and obligations of the authority and
also the responsibilities of
Secretaries of State and Government
Departments in relation to a new
regime for major projects.
How does this work?
There are four critical elements to the
mandate. The first is the power to
establish the portfolio.
We use a very simple, but effective,
definition of a major project; it is a
project that is outside the
departmental expenditure limit. We
work with departments to determine
which of their projects the authority
will focus on. Using that definition
identifies around 2,400 potential
projects, and we have worked with
departments to establish a portfolio of
206 projects with a total value of
£408bn.
At this stage, indications are that
projects of this type have been
running with an overall success rate of
about 30%, so we can see huge
possibilities for efficiency gains and
wins for everybody.
The second element is an integrated
assurance and approvals regime
working in partnership with HM
Treasury. For the first time every
major project, whether it is new or
existing, must have a formal critical
path which sets out what approvals
are required and when. HM Treasury
will not release new or stage funding
for a project until the MPA has
assessed the project status with
respect to specified benefits and their
likely delivery. This is a new and
important thrust.
The third element is the power of
intervention. We are not talking about
taking over projects but being able to
intervene to find out what is going on
in a troubled or stalled project and
making recommendations to the
minister responsible. The
recommendation could be to stop
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the project or, more commonly, we
recommend the project be rescoped or restructured to bring it
back on time and within budget
A third option is to recommend the
project continues, but bring in very
strong extra support particularly in
the areas of commercial capability
and contract management.
The recommendation will depend on
our analysis of where the project is
and crucially on whether it is likely to
deliver the specified benefits. If it
can’t, we consider how the project
might be restructured to deliver the
best possible outcome.
The fourth area is transparency and
reporting. We are just beginning to
look at this area which will be
concerned with the publication of
performance data for major projects.
This is likely to be a matter for
consideration by the government
later this year.
Benefits realisation and the potential
delivery of the specified benefits is a
fundamental analysis point in all four
of these elements.
How do you identify benefits?
What do they look like for the
kind of projects you are
interested in?
The projects we are interested in
are, by definition, high risk and high
value with high potential for
FEATURE INTERVIEW: MAY 2012
reputational damage and because of
this the benefits requirement is
fundamental. Under the mandate we
are operating, all new projects must
have a starting gate which looks at
five critical areas: is the business
case sound and are the specified
benefits likely or possible; is the
timeline realistic and achievable; is
the budget robust and sufficient to
deliver the business case; is the
strategic risk management framework
in place and, more importantly, has
the leadership and the team the drive
and competence to deliver the
benefits? So the benefits provide the
primary prism on whether or not the
project should even be allowed to
start.
and then stick to it. This requires a lot
of work at the outset of the project.
The ambition is important because
without it you can’t define the scope
and without the scope you can’t
assess the timeline and the cost. We
then insist that there is a custodian of
the ambition at the highest level in
the project team. This is designed to
ensure that proposed changes are
tested against the ambition and are
agreed by a range of stakeholders
across the organisation to avoid
unnecessary scope creep and
inefficiencies arising from constant
redefining of projects. You often see
this in large ICT projects and the
result is suppliers become unclear
about what they are required to
deliver.
the portfolio .They report against a
range of performance data including
the benefits measures. We use these
reports to decide on what action
needs to be taken. This is the
foundation of our day-to-day work.
For example, if a project that is
amber in Q3 and moves to amber/red
or red in Q4 we will be alongside
the team to help understand why and
identify what needs to be done by
whom for the project to get back on
track. In large projects, red is not
dead; there will always be difficult
stages in the project and red is an
indicator of this; for instance, in a
phase that needs to raise critical
funding, the project will remain red or
amber/red until the funding has been
secured and the risks properly
You may have seen that we
recommended the closure of a major
ICT programme which had run for
almost 4 years during which the
project design and delivery
specification were changed
incessantly because they never
stopped designing and redesigning
thereby rendering successful
completion impossible. You cannot
have a rolling ambition, you must
have an ambition that is set at the
beginning of the project and all
elements of the project are then
driven by the ambition.
adjusted. This is right, as it is the
nature of the beast. The quarterly
report is a fundamental indicator of
where we and the departments need
to focus. We work in collaboration
with the project team to manage the
problem. For this collaboration to
work we need transparency so that
everyone knows where the project is
and responsibility for what needs to
be done is shared
For the majority of our projects, we
focus strongly on financial benefits.
The nature of the projects is such
that if these are in line with the
project ambition and framework they
provide a strong indicator of the other
benefits, for instance social benefits.
Consider ‘Crossrail’ for example; if
we can ensure this £16bn project
stays on track and delivers its
financial benefits this will indicate that
the link is being used so the social
and economic benefits will flow.
We try to have as few intangible
benefits as we can. Expressing
benefits in terms of money is not an
exact science so we do a lot of work
at the beginning of the project to
identify the tangible side of things like
the social benefits or the benefits of a
state security project. We analyse
what would need to be present and
what we can measure for these
benefits to flow.
How do you ensure that the
project is delivering the right
benefits?
I am introducing much more powerful
accountability to ensure that projects
remain on track to deliver what they
are intended to deliver. This is done
through the definition of the project
‘ambition’ to provide a focus for the
project. The ‘ambition’, a bit like a
vision or mission, should be sorted
and accepted by all involved in the
project from the start. The idea is to
understand from the outset what it is
that the project is trying to achieve
What is the MPA’s role during
the project life-cycle and post
completion?
We require all departments to report
quarterly on the 206 projects within
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How do the government
departments view the MPA and
how do they benefit from
working with you?
Initially, they resisted the changes as
they saw that they were losing their
autonomy and freedom. The reality is
that there is so much efficiency to be
gained and everyone
FEATURE INTERVIEW: MAY 2012
understands that we need to do
things differently. The people within
the departments who embraced what
we are doing have seen significantly
improved outcomes in terms of
project benefits. It has taken some
time but now departments have
almost entirely embraced the
approach, as has HM Treasury.
In the MPA we are building an
organisation to provide ‘base cover’
for all aspects of major project
management. There are four pillars
to the Major Projects Authority:
1. The portfolio, set up to manage
major projects effectively and
which we have spoken about;
2. The Major Project Leadership
Academy that we have set up in
partnership with Said Business
School, Oxford. This is aimed at
developing world class project
leaders [see Project, March 2012]
and improving the portfolio
through stronger and more
informed leadership;
3. The operating environment which
is working with departments to
ensure that projects are set up to
succeed from the start using 16
streams of activities in a
temporary organisation for these
projects. These include finance,
risk, benefits etc. and what is
needed to manage them
effectively. This will allow the
leaders to operate efficiently and
make a real difference by
changing the way projects are
delivered within the departments;
and
4. Achievement and learning; this is
a sophisticated electronic facility
we are designing to provide a very
interactive and accessible
repository of lessons learnt - what
went right and what went badly. It
will be built around the legacy
learning from the Olympic Delivery
Authority, which is one of our
pride and joys.
There is much to learn in both the
private and the public sector. The aim
is to work with the private sector in a
different way. Project managers in
the private sector will be able to
access the achievement and learning
repository and to take advantage of
training and development offered by
the Academy. The aim is to use
these as a means of bridging the gap
between the public and private
sector. There has been a lot of
interest from all over the world in the
Academy which clearly meets a need
and is unique in focussing on project
leadership rather than the tools for
day-to-day management. In many
cases, project leaders (or SROs) are
appointed because of their
organisational position not because
of their capability or experience in
leading projects. The Academy aims
to develop leadership skills in project
leaders and to expose the students to
world class project leaders, spending
days with them to develop an
understanding of what makes
projects succeed. We will know that
we are getting things right when
project leaders start saying that they
will have to change or stop projects
because they are not going to deliver
the benefits. This is about having the
knowledge, strength and experience
to close down or change projects
early in their course to ensure that
they deliver the best possible
outcomes; rather than the current
practice of putting your head down
and ploughing on.
What do you think are the key
attributes/characteristics which
are important to deliver real
benefit from major public
sector projects?
Keep things simple – reduce the
complexity as much as possible.
Don’t allow the definition and the
game plan to creep during the
project. You should be able to
summarise the project on a single
page even if the detail is complex.
This will allow leaders to think at a
high level, strategically, and then act
tactically.
This is why the initial work on the
project ambition is so important;
ensuring that everyone understands
and supports the project ambition.
Following on from this, don’t allow
changes unless everyone agrees.
The quarterly reporting we introduced
ensures that we understand any
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changes and that they are necessary.
You need to be able to challenge any
creep in the ambition – Where is it?
Why is it there? Some changes are
right and necessary, for instance,
when it is determined that the
ambition set for the project is
unachievable, such as when the
technology available in the market is
not capable of reliably delivering the
requirements. Leaders who
understand the project need to agree
and authorise any change.
What aspirations do you have
for benefits management in the
future?
I think a key area is very powerful
analysis at the end of the project
covering what has been delivered
and what the end of the project
means. In respect of the mandate we
are operating under, projects can’t
come off the portfolio until the MPA
has concluded that the project has
determined what benefits have been
delivered and for what cost and
where the on-going accountabilities
and responsibilities lie.
Before we started only13% of
projects had a closure analysis or an
end gate review. We are working
hard to establish this; recognising
that some projects last for many
years. Also, in the last 1-2 years of
long projects we will look critically to
ensure that everything is done to
enable projects to be completed
successfully including benefits
delivery.
As we develop the MPA, the focus on
the benefits derived from the projects
will become even more important.
The MPA anticipates revisiting
projects after they have closed to
assess how the ambition was
achieved and the longer term
benefits delivered as well as to pick
up the lessons learnt. We will be
looking at what actually happened
rather than what was reported. For
instance, the big rail projects often
have the benefits linked to the fares
collected; if you can’t complete the
project to specification, you don’t
collect the fares because you are not
carrying the traffic so the economic
benefits are not being realised – so it
all comes back to the ambition.
FEATURE INTERVIEW: MAY 2012
Do you have any tips for
managers involved in benefits
realisation to help them add
value to project delivery?
I will repeat the mantra of the MPA –
95% of major government policy
initiatives are delivered through major
projects or programmes. It follows
that if you deliver the projects
effectively you get a much better
policy outcome. In setting up a
project, you must be able to specify
and describe the benefits clearly.
If you can’t describe the benefits,
then you can’t measure them and if
you can’t measure them, you can’t
tell whether the project is successful.
If you can’t describe the benefits then
there is something wrong with the
policy you are trying to deliver. If the
benefits which underlie the policy are
not capable of being understood and
measured the project will fail the
starting gate test and the MPA will
recommend that the overall agenda
and ambition of the project be
adjusted. My tip is therefore to spend
a lot of time on deciding and
structuring the benefits you are going
to deliver … and if you can’t do that
you need to return to the policy
maker and ask them to refine the
policy to one that can be delivered. If
the project manager and the key
stakeholders do not understand the
benefits, it is going to go horribly
wrong which is why it is important to
get it right at the beginning.
Association for Project Management
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Summerleys Road,
Princes Risborough
Buckinghamshire, HP27 9LE
Telephone +44 (0) 845 458 1944
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Web apm.org.uk
email: [email protected]
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