Portfolio management support to a £12bn investment programme at TFL
- OverviewRead more
With a portfolio in excess of £12bn, Transport for London (TfL) required support to improve the alignment of their investment portfolio to overall strategy, via the Oversight programme. We used a staged approach to prioritise their programmes and projects and achieve their ultimate objective of establishing a permanent portfolio assurance function by 31 March 2006. We began by undertaking benchmarking reviews against eight external organisations to compare TfL's assurance capability, and used this to create a prioritisation model to assess the entire portfolio. Having gained a clearer picture we then developed the necessary processes, governance structures and tools to communicate the progress of portfolio delivery and risk mitigation. Our involvement ensured the portfolio assurance function was completed on time and to budget, with crucial recognition by TfL that the benefit of the function was beyond question in relation to facilitating senior executive visibility and control of a £multi-billion portfolio.
- Our client's challengeRead more
With a portfolio in excess of £12bn,TfL required support in relation to improving the alignment investment portfolio to its overall strategy – through programme and project prioritisation and targeted assurance reviews.
- Our responseRead more
Our staged approach:
- Undertook a benchmarking review. This ensured TfL harnessed 'best practice' portfolio management. We developed a framework capturing this knowledge and assessing its relevance to TfL. We then set clear portfolio management targets..
- Developed a Prioritisation Model. This assessed the TfL portfolio by weighting each programme against a business value and risk criteria. We used an investment framework based on four types of investment categories: innovation, productivity, growth and maintenance. This helped to identify whether the TfL strategic vision, that envisaged a number of high profile and complex 'new build programmes', was suitably balanced against getting the infrastructure to a 'state of good repair'- a critical balance in terms of 'deliverability'.
- Collected Programme Data: We used standardised project diagnostic templates, which allowed us to categorise the benefits using a mapping tool.
- Analysed Portfolio: We assessed the current portfolio based on: value contribution to the business; alignment with strategic objectives; the inherent strategic and operational risk; and annual constraints such as resources and budget.
- Reports and Communication: We developed processes, governance structures and tools to communicate and report the progress of portfolio delivery and risk mitigation. Our performance management dashboards provided health indicators for the portfolio, to enable improved executive decision making on strategic 'trade-off' issues.
- Undertook a benchmarking review. This ensured TfL harnessed 'best practice' portfolio management. We developed a framework capturing this knowledge and assessing its relevance to TfL. We then set clear portfolio management targets..
- The value to our clientRead more
The main objective of the engagement was to establish a permanent TfL staffed portfolio assurance function by 31 March 2006. This was completed on-time and to budget. At completion, it was recognised that the benefit of the function was beyond question in relation to facilitating senior executive visibility and control of a £multi-billion portfolio.
The benefits of the independent assurance provided by the Oversight function is estimated conservatively as a net present value of c. £90m in avoided costs (improved programme delivery, retention of TfL's credit rating etc). This was recently attested to when the second year £200m bond (early 2006) was issued at 12 basis points below the first issue – a reflection of the market's confidence in TfL and its management structures.
Direct 'second opinion' benefits of the reviews are also expected - in one early review alone, these were estimated at c. £2-3m worth of 'value engineering' savings.
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