Solution Note – Public Sector
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Public Sector Portfolio Management
Prioritization and Portfolio Management in the Public Sector is a complex task. Unlike commercial organizations there is no single unifying goal of profitability to act as the final arbiter on difficult choices. In the public sector there are typically multiple strategic goals – often very diverse in nature.
- Central Government
- Local Government
- Charitable Organisations
- Health Authorities
The GenSight approach recognizes that multiple goals must be built into the prioritization process. These goals usually are multi-dimensional in nature – encompassing social, political, economic, environmental and other aspects. It is tempting to say these divergent goals cannot be considered alongside one another – however, when you have a budget to allocate across competing activities that span such diverse goals then you must compare them.
The following case study illustrates the process of applying Portfolio Management in a large government department.
Defra Manage £4 Billion Portfolio of Projects using GenSight Portfolio Management (PPM) Solution.
Defra (Department for Environment, Food and Rural Affairs) is a UK Government Department. The overarching challenge for Defra is to enable everyone to live within our environmental means. This is most clearly exemplified by the need to:
- Tackle climate change internationally and through domestic action to reduce greenhouse gas emissions, and
- Secure a healthy, resilient, productive and diverse natural environment.
For the past 18 months, the Renew Defra program has aimed at transforming the way in which Defra does business to make the department more effective, responsive and accountable. One of the Renew objectives is to prioritize activities to match the overall level of resource.
Where projects and the funds allocated to them were previously kept in silos, the focus is now on the overall outcome of the department and the value it provides to the taxpayer. The GenSight approach reflects Defra’s objective of prioritizing its portfolio according to the level of contribution of each of the 600 activities across the department.
Using GenSight to Prioritize Across a Diverse Portfolio
Defra have used the GenSight Enterprise Portfolio Management software to help to manage the prioritization of a diverse portfolio of projects and activities including flood management, fuel poverty and environmental initiatives, which can run from a few months to many years.
The GenSight software includes advanced web-based reporting systems and dashboards that use graphical, numerical and tabular displays to provide analysis and reporting on key performance metrics. Based on the scoring system chosen by Defra, GenSight provides an objective visual overview of each project’s overall contribution to strategic goals, based upon numerical and qualitative data.
The GenSight application helps measure the strategic value and other benefits of each project, as well as the level of commitment to each activity. It highlights projects that have significant cross-cutting benefits to multiple strategic goals, and helps assess the probability of their success. GenSight also analyses resource allocation and spending and provides a prioritization based approach to budget allocation.
Chris Hix, head of finance for climate change at Defra said: “The department deals with crises such as animal disease emergencies and floods, but also has long-term commitments including the objective of climate change mitigation and adaptation. The department must balance multiple and diverse priorities whilst also taking into account Ministerial, legislative and European Union requirements. We therefore need a tool to support strategic decision-making. Prioritisation and criteria based decision-making helps to get to balanced views and create consensus on the level of contribution of each activity. We are looking at the contribution of individual projects, and also assessing the full portfolio of the Department.”
The benefits provided by GenSight to Defra include:
- The provision of a project portfolio view across the department
- A greater focus on alignment with objectives
- A systematic comparison between activities
- A framework for budget and resource allocation decisions
- Analysis of the balance of costs vs. benefits across the departmental objectives
As well as its public accountability and pressure to fulfill political objectives, Defra needs to contend with the management of a large budget, which must still be divided between a vast number of projects with conflicting interests and levels of emergency. Prioritizing spending and strategic decision-making on this level, taking into account the complexity of data and interests of different stakeholders, can only be carried out objectively with the support of a flexible PPM application such as GenSight.