making business plans a reality

Key Words: Strategic Planning | Stakeholder Engagement
Situation:
The Production department for a major energy provider on the East coast of Australia had an annual budget of approximately $120m per annum. A diverse stack of activities underpinned the approved budget with demand managers spanning multiple departments and each representing a broad range of value drivers. In total, 10 demand channels, 5 departments, 4 budget type categories across a 3 year time horizon werer all represented. However, end of year financial lookback assessments would always reveal the same anomaly and budget underspend would always predictably sit at a worrying minus 20%. Additionally, integrated activity planning (IAP) meetings would reveal low levels of schedule attainment and high levels of raised emotions as demand managers would compete for the limited available execution resources. Senior management were considering placing a forced management adjustment overlay into the approved budget of the upcoming business plan build, leading to significantly eroded value creation in lieu of greater credibility against approved budgets.
Task:
Overhaul the business planning process to deliver an outcome that ensured that approved budget spend profiles were executed accordingly. Improve the accuracy of activity plans to drive an increase in schedule attainment and ultimately deliver the expected return on investment across each of the activity streams and value drivers.
Actions:
  • Coordinated a workshop across all demand managers to communicate the problem statement, gain alignment and support.
  • Built a centralised tool to aggregate all activity demand requests and introduced a view of available execution capacity to frame regret based scenarios.
  • Developed executive summaries of proposed approved activities, regrets, dilemmas and strategic scenario framing.
  • Composed and published an approved business plan work scope document with approval signatures from all budget owners.
  • Collaborated with activity plan holders to re-baseline all schedules according to approved business plan activities over a 3 year time horizon.
  • Introduced a change management process into the cadence of IAP meetings to control competing priorities and schedule risk as it emerged.
 
Results:
  1. Aligned cross functional stakeholders with significantly improved sentiment.
  2. An +8% improvement in schedule attainment across a complex multi-disciplinary set of integrated workstreams.
  3. An +13% reduction in overall budget variance against an approved $120m business plan.
  4. Safeguarded significant gas production volumes via the introduction of a robust planning and change management process.