Implementation, management, monitoring and benefits management

10.1 Implementation

10.1.1 Economically justifiable and financially affordable proposals are of no value if they cannot be implemented. In this context, implementation refers to those activities that are required during the period after appraisal to put in place a policy, or complete a programme or project. The implementation of proposals must be considered as part of the appraisal process, enough to ensure at least that proposals are viable, risks are manageable, and that benefits can be realised, before significant funds are committed. These aspects of appraisal develop iteratively as with the analysis of costs and benefits.

10.2 Programme and project management

Programme management

10.2.1 Programme management is a structured framework for defining and implementing change within an organisation. It provides a framework for implementing business strategies and initiatives through the management of a portfolio of projects that give organisations the capability to achieve benefits that are of strategic importance. All large programmes should have recognised programme management methodologies with relevant governance and responsibilities defined.

10.2.2 Programmes consist of a number of projects and programme management provides the means for managing and co-ordinating project outputs and capabilities to deliver benefits.

10.2.3 Programmes require a mandate from a senior management sponsoring group and the personal ownership and accountability of a single senior responsible owner (SRO). A programme manager should be appointed to drive the proposed change forward and oversee the links and dependencies between the programme's individual projects. The establishment of a programme management office (PMO) is recommended to support the programme and act as an information hub.

10.2.4 Programmes should set out how it is intended to address a number of key areas and usually require strategies for the management of benefits, communications, risks, issues and for the engagement of stakeholders. They should also engage with the NI Gateway Review process and plan a series of Gate 0 reviews at appropriate points. The justification for a programme should also be fully documented in a programme business case.

10.2.5 Post-review is an important part of effective programme management. Reviews should be carried out at appropriate points along the programme as well as at programme closure.

Project management

10.2.6 Effective management of projects is an essential element of resource control. It is vital that departments have in place robust, proactive systems for project management, to ensure that projects are managed satisfactorily and within budget. Evidence of effective project management systems under implementation will be a factor in considering projects for approval and in setting revised delegated limits.

10.2.7 Adopting a structured approach to project management helps focus energy and resources to provide the most effective outcome. Commensurate effort should be applied at all times relative to the scope, size, and complexity of a project.

10.2.8 Governance arrangements relative to the scale of the project must be put in place including a project board, senior responsible owner (SRO), project manager and project team. Important information including the project objectives, agreed scope, an initial plan and projected benefits, should be written down in the project initiation document (PID). Where the project is construction-related, reference should be made to the achieving excellence (AE) principles, as outlined in section 10.3 below.

10.2.9 Once up and running, careful monitoring and control of project activity is required. Action is necessary to manage risks, issues, quality and configuration. Upon completion the project should be closed in a controlled manner and a post project review must be carried out to confirm the realisation of project benefits. An end project report should also be completed including lessons learned.

Relevant advice and guidance

10.2.10 DoF expects departments to manage programmes and projects according to the latest good practice guidance. This includes the guidance at:

• CPD's centre of expertise for programme and project management web pages
• the Cabinet Office pages on best practice and methodology for projects, programmes and portfolios

10.2.11 There are several strands to this guidance, including:

• the principles and procedures set out in the current achieving excellence in construction guidance. These are designed specifically for use in construction or capital works projects, and DoF recommends their use in such cases
• the principles and procedures as set out in the latest PRINCE2 (projects in a controlled environment) documentation. These principles apply to projects in general, including construction projects and all others
• the concept of Gateways and Gateway Reviews
• performance measurement, management and monitoring
• benefits management and realisation

10.2.12 Brief elaboration of these principles and concepts is given below. For further detail, departments should seek advice from DoF's Central Procurement Directorate (CPD) and, where appropriate, refer to the Centre of Expertise web pages and the relevant Cabinet Office guidance.

10.3 Construction (or capital works) projects: Office of Government Commerce (OGC) achieving excellence in construction guidance

10.3.1 The Achieving Excellence Initiative for Northern Ireland aims to make the public sector client a best practice client when procuring construction projects and services. The initiative is explained at CPD's achieving excellence pages which contain links to relevant resources including the full suite of achieving excellence guides. Wider general guidance on construction issues is available at CPD's information for construction projects page.

10.3.2 The principles in the current achieving excellence in construction guidance should be applied and should be reflected in NI departments' documented client procedures for the management of projects. This guidance advises departments of the principles for the management of capital works projects which should be integrated into departmental systems. Departments should have in place procedures to control capital projects which, as a minimum, include these principles. Where a department is at present applying more rigorous guidelines it should of course continue to do so.

10.3.3 The achieving excellence suite of guidance replaced the construction procurement guidance series in 2003. The new series reflects developments in construction procurement over recent years and builds on departments' experience of implementing the achieving excellence in construction initiative. In taking forward achieving excellence, new targets for government clients have been established; these are outlined in the achieving excellence documents. DoF's Central Procurement Directorate (CPD) will coordinate on the adoption and dissemination of this guidance.

10.3.4 The current achieving excellence suite of guidance includes:

• A Manager's Checklist
• Construction Projects Pocketbook
• AE Guide 1 Initiative Into Action
• AE Guide 2 Project Organisation
• AE Guide 3 Project Procurement Cycle
• AE Guide 4 Risk and Value Management
• AE Guide 5 The Integrated Project Team
• AE Guide 6 Procurement and Contract
• AE Guide 7 Whole Life Costing and Cost Management
• AE Guide 8 Improving Performance
• AE Guide 9 Design Quality
• AE Guide 10 Through Health and Safety
• AE Guide 11 Sustainability
• Common Minimum Standards
• Guide to 'Fair Payment' Practices
• Making Competition Work for You

10.3.5 These guides are available in full together with relevant case studies at the OGC Achieving Excellence website.

10.3.6 The principles set out in the OGC guidance form part of a continuum of good capital project management practice. They are especially important in relation to major projects which involve considerable expenditure, but are relevant to projects of all sizes. Departments should exercise their judgement in applying appropriate control measures to projects of different size and scope.

Roles

10.3.7 A key principle is the establishment of roles. Departments' documented client project management procedures must identify the client roles of investment decision maker, project owner (or senior responsible owner) and project sponsor. The procedures must also draw a clear distinction between the client roles and the provider roles. The latter roles are that of the project manager, the design functions and the works contractors. The main client and provider roles are defined in AE Guide 2.

10.3.8 Whereas the client roles can be undertaken by intelligent lay-persons with appropriate training, the project manager must have technical expertise. The project manager is the person appointed by the project sponsor to be responsible for managing the project on a day-to-day basis. He or she must ensure that the department's agreed systems and procedures are adhered to and that the contractor/supplier complies with requirements. The project manager reports progress to the project sponsor at agreed intervals.

10.3.9 In addition, in the case of projects that are above the delegated limit, there will be an approving authority role that will be exercised by the supply divisions of DoF. The project sponsor should report progress to the approving authority at agreed points during the management of the project. Departments must submit progress reports to supply in accordance with any conditions/timetable set at the time the project was approved by DoF.

Project planning and control

10.3.10 Proper attention must be paid to planning and controlling the project at all stages. AE Guide 3 includes a general framework for construction procurement, describing all the main stages in a project's development. This should be adapted to suit the needs of the specific case in hand.

10.3.11 Greater emphasis should be given at project initiation stage by way of definition, estimating and risk assessment and management under the responsibility of the project sponsor. The project sponsor should ensure that there is a clear project brief which provides a comprehensive statement of the department's requirement for the project. This should be based on close consultation between the project sponsor, project owner, users and stakeholders.

10.3.12 Greater thoroughness prior to formal approval is considered to be one of the most important factors in achieving better control and performance. Performance in terms of completion within budget and time depends crucially on thorough specification, and careful assessment of cost and time required, and the development of a project execution plan.

Project execution plan

10.3.13 The project execution plan is the key management document governing the project strategy, organisation, control procedures, responsibilities, and, where appropriate, the relationship between the project sponsor and the project manager. It is a formal statement of the user needs, the project brief and the strategy agreed with the project manager for their attainment. The scope of the plan will depend upon the size and nature of the project. It is a live active management document, regularly updated, to be used by all parties both as a means of communication and as a control and performance measurement tool. Fuller guidance on the project execution elan is given in AE Guide 3.

10.3.14 The project sponsor should ensure that a project execution plan is agreed. The project sponsor must be satisfied that the project execution plan represents a viable and realistic plan for implementing the project and achieving its objectives.

Cost management

10.3.15 It is essential that capital projects should be managed on time and within budget. AE Guide 7 contains appropriate guidance on budget estimation and cost management, including allowance for risks and whole life costs. Applying these guidelines should help alert departments to potential cost overruns in sufficient time to take appropriate remedial action. When monitoring project management performance, sponsoring departments should pay particular attention to the management of risk giving rise to time and cost slippage.

Project reports

10.3.16 The project manager should issue regular reports to the project sponsor regarding the current status of the project, key issues and problems requiring resolution and the steps being taken to resolve them. The project sponsor should normally forward copies or summaries of them to the project owner for information and will draw the project owner's attention formally to any matters of serious concern to the department.

Advice

10.3.17 Advice on establishing appropriate systems for the management of construction or capital works projects is available from CPD. 

10.4 PRINCE2: management of projects in general

10.4.1 PRINCE2 (Projects In a Controlled Environment) is a structured method for effective project management that is designed for use on any type of project in any environment, including client-side construction-enabled projects. It contains a complete set of the concepts and processes required for a properly run and managed project. Details are available on the PRINCE2 website.

10.4.2 PRINCE2 is used extensively in NI and the rest of the UK, and is widely recognised and used in the private sector, both locally and internationally. Its key features are:

• its focus on business justification
• a defined organisation structure for the project management team
• its product-based planning approach
• its emphasis on dividing the project into manageable and controllable stages to which resources are committed one at a time
• its flexibility to be applied at a level appropriate to the project
• management by exception
• management of risk

10.4.3 The way that PRINCE2 is applied to each project will vary considerably, and tailoring the method to suit the circumstances of a particular project is critical to its successful use.

10.4.4 It should be noted that it is no longer acceptable to divorce construction projects from PRINCE2. The specific technical construction or works elements should be taken forward using the achieving excellence guidance, but this is only one element of the project. PRINCE2 should be used to manage the project as a whole.

10.4.5 Under PRINCE2, senior management direction and control of the project is exercised through a project board, representing executive, senior user and senior supplier interests. The role of the senior responsible owner (SRO) is crucial. He is responsible for ensuring that the project or programme meets its overall objectives and delivers its projected benefits. The role of the project manager is also vital. He is given the authority to run the project on a day to day basis on behalf of the project board, within constraints specified by it. These and other roles are explained in the PRINCE2 document.

10.4.6 PRINCE2 includes guidance on appropriate project management documentation, including, for instance, the project brief and the project initiation document (PID), which provides the baseline of estimated costs and time against which progress of the project is monitored. The project manager should provide the project board with highlight reports to summarise progress at defined intervals. PRINCE2 always focuses on delivering specific products to meet a specific business case. Throughout the project, the business case is reviewed and progress is measured against any revised expectations of achieving defined benefits. Any deviations from the original business case must be controlled through the project board.

10.4.7 The PRINCE2 model includes eight distinct management processes, from setting the project off on the right track, through controlling and managing the project's progress, to the completion of the project. These processes define the management activities to be carried out during the project. In addition, PRINCE2 describes a number of components that are applied within the appropriate activities, covering organisation, plans, stages, controls, risk management, configuration management, change control and quality review. These processes and components are described fully in the PRINCE2 manual.

10.4.8 CPD can provide advice on the application of PRINCE2.

10.5 The gateway process

10.5.1 All programmes and projects are subject to Office of Government Commerce (OGC) gateway reviews. The process examines a project at critical stages in its lifecycle to provide assurance that it is on track and should progress successfully to the next stage. It is designed to be applied to all programmes and projects.

10.5.2 In NI the gateway process is managed by CPD's Centre of Expertise (CoE). CPD is now an OGC gateway authorised hub, which provides guidance, will organise and place review teams and provide both awareness and reviewer training.The process is explained in detail at the NI gateway review process pages. 

10.5.3 In simple terms, a gateway review is a peer review of a programme or project carried out at a key decision point by a team of experienced people, independent of the project team. Gateway reviews need to be scheduled into programme and project plans and at least eight weeks notice of a review taking place should be given to CPD.

10.5.4 The gateway process is based on well-proven techniques that lead to more effective delivery of benefits together with more predictable costs and outcomes. The process considers the programme and project at critical points in its development. These critical points are identified as gateways. For projects, there are five review points in the process, three in advance of investment decision or financial commitment and two looking at service implementation and confirmation of the operational benefits. Gateway 0 generally applies only to programmes while gateways 1-5 apply to individual projects. The process emphasises early review for maximum added value.

10.5.5 All programmes and projects are required to complete a risk potential assessment (RPA) which should be validated by the head of the departmental programme office or portfolio manager under arrangements with CPD's CoE. However, departments and organisations may decide on a de minimis cut off point, below which a risk assessment may not be required, but must do so on the basis of a full understanding of the implications and be accountable for their action. De minimis limits should be approved by the accounting officer in conjunction with the head of the appropriate centre of procurement expertise (CoPE). For fuller guidance, see procurement guidance note 03/09 "Procedures and Principles for Application of Threshold Limits as Part of the Gateway Review Process".

10.5.6 Where a risk assessment designates a programme or project as medium or high risk the assessment should be forwarded to CPD/CoE for agreement (email: gateway.cpd@finance-ni.gov.uk). If this risk assessment level is confirmed, CPD/CoE will make arrangements on behalf of the SRO for an OGC Gateway Review, using an experienced and impartial review team. The teams vary in size depending on the level of the programme or project, but typically are between three and up to five people. Each review takes about three to five days, with a complete report provided to the SRO before the team leaves the site. The targeted review is designed to avoid any delay to the project.

10.5.7 Where the programme or project is designated low risk an internal peer review should be undertaken, in line with gateway principles by an independent team appointed by the department. In the event of a disagreement arising between the department and CPD/CoE in relation to a department's determination of risk levels, the matter should be referred to the departmental accounting officer and director of CPD for resolution.

10.5.8 A gateway review is conducted on a confidential basis for the SRO and ownership of the report rests with the SRO. However, the SRO may be expected to share the report with the project board, accounting officer and the funding or approving department. This approach promotes an open and honest exchange between the programme or project and review teams delivering maximum added value. Accountability rests with the SRO for the implementation of recommended remedial action and project progression. These actions may be monitored by CPD depending on the outcome of the review. General advice on the gateway process is available from CPD's CoE.

10.6 Performance management, measurement and monitoring

10.6.1 Performance management concerns tracking the success of a policy, programme or project in achieving its objectives and in securing the expected benefits. For appraisal and evaluation purposes, it involves the systematic collection of data relating to the financial management and outcomes of the policy, programme or project during implementation.

10.6.2 Monitoring involves checking at regular intervals that a project, programme or policy is being implemented on target, on time and within budget. This provides an essential source of information, indicating the extent to which objectives are being achieved, giving an early warning of potential problems, and of the possible need to adapt the policy, programme or project to ensure success. Monitoring also provides information for the evaluation stage. To be fully effective, plans for monitoring must form part of the initial planning of a policy, programme or project.

10.6.3 The Northern Ireland Audit Office (NIAO) has stressed the importance of careful monitoring of all projects from the outset, particularly any projects being delivered by a new organisation without a proven track record of successfully delivering publicly funded projects; financial management systems and procedures should come under particular scrutiny. (Grants Paid to Irish Sport Horse Genetic Testing Unit Ltd., NIAO report HC 396, para 52).

10.6.4 The use of formalised capital works management procedures should provide senior management with a hierarchy of performance measures/indicators on the effectiveness, efficiency and economy of their management of capital works.

10.6.5 The facility to compare performance measures/indicators against targets, over time and between sub-groups is an essential aspect of the development of capital works' management procedures.

10.6.6 Effective performance measurement and monitoring means tracking all categories of benefit and ensuring that:

• projects have defined target benefits and outputs
• ownership of the delivery of benefits remains with the SRO
• outputs of a project or policy remain consistent with changing government objectives
• costs are closely monitored and managed
• forecast costs and benefits are frequently reviewed

10.6.7 A monitoring system should establish:

• whether management data is actually calculating what it purports to measure
• sufficient controls to ensure that the data is accurate

Financial Reporting

10.6.8 Regular financial reporting on policies, programmes and projects should be performed. Reports may be integrated into the normal financial reporting cycle of an organisation, issued separately, or possibly combined with the reporting of progress against plan, benefits, and risks. For example, they may be included in highlight reports from project manager to project board.

10.6.9 Finance reports are likely to show expenditure to date, forecasts for the year, and variances against budgets. In large complex projects, the financial reporting is likely to integrate with contract management, with contractors providing regular work-in-progress statements.

Contract management

10.6.10 When contracts have been let, it will be important to ensure that the respective roles and responsibilities set out in the contract are fully understood and fulfilled to the contracted standard. The likelihood of the benefits being realised will be affected by the contractual terms, and any incentives built in to the contract. Where contracted standards are not fulfilled, the contracting public body should apply mechanisms established in the contract to rectify any under-performance. Guidance is available from CPD on dispute resolution.

10.7 Benefits management and realisation

10.7.1 The management and planning of policies, programmes and projects should include specific provision for benefits management and realisation. This applies to projects in general. Benefits management is the identification of potential benefits, their planning, modelling and tracking, the assignment of responsibilities and authorities and their actual realisation. In many cases, benefits management should be carried out as a duty separate from day to day project management.

10.7.2 Benefits management complements and overlaps with appraisal. While appraisal provides the justification for the investment, benefits management allows organisations to plan for and achieve the benefits. Costs and benefits cannot be viewed in isolation, and the benefits management process and the overall appraisal should be planned together. Benefits management also interfaces with performance management, a means of measurement and management that monitors and reports achievement of outcomes.

10.7.3 Benefits management is a process that:

• identifies expected benefits, contributions to business objectives and stakeholders
• establishes a benefits management structure defining functions, relationships, communications, roles and responsibilities
• develops models of benefits, including baseline measurements and intermediate and final outcomes
• defines the benefits, including their attributes and measures, owners and risks
• assesses value and organisational impact, dependencies and risks; it will also show how the benefits are interrelated
• develops a benefits realisation plan, including a schedule for delivery, assessment or review points, alignment/linkage/inter-dependencies with other modules, projects or programmes, and business change processes for implementation and delivery
• establishes accountability for realisation and a means of tracking benefit realisation, including any performance management requirements
• evaluates the extent to which benefits have been realised

10.7.4 Benefits fall into four main categories, as indicated below:

Benefits management and realisation in the business case

10.7.5 In developing a business case an SRO is responsible for ensuring that the project's objectives, costs and benefits are correctly aligned with the business strategy or programme direction. Of particular importance, from an early stage, is the identification of benefits and how these will be realised. In general, business cases should:

• assess/estimate the benefits that the project should deliver to answer the question, is the project worth doing?
• document the process for identifying, monitoring and realising the benefits
• ensure plans/processes are in place to achieve the benefits
• define the baseline benefits position to allow comparison with projected benefits
• define boundaries with other programmes/projects to ensure benefits are not double counted

10.7.6 DoF will look for evidence that these steps have been suitably addressed and documented in business cases submitted to it.

10.7.7 In addition, benefits realisation plans (BRP) should be included in business cases. They should identify the benefits by category, the activities that will be undertaken to pursue and realise them, and who is responsible for each benefit realisation activity. In general:

• a draft BRP should be included in OBCs
• a final BRP should be included in FBCs
• the format and content of BRPs should accord with the guidance and templates provided at the CPD programme and project benefits management pages

Note: The programme and project management templates page now includes a simplified benefit profile for small projects template, which is suitable for projects with total costs of up to £1m.  All projects with total costs over £1m should use the standard benefit profile template.

10.7.8 Further information on benefits management is provided at the CPD Programme and Project Benefits Management page, and CPD's Centre of Expertise (CoE) can supply relevant advice.