Investment Management

Reducing the risk of making the wrong investment decisions

Total Metrics assist our clients clearly define the rationale for their planned Investments and ensure that their planned solution is appropriate for their need. Where an investment is expenditure on a new service or product or the infrastructure to support existing products or services.

The Investment Management Standard (IMS) methodology provides the framework in which the planned investment is fully investigated and all options explored so to ensure that it is aligned with the organizations business objectives and strategic direction. This structured formal approach takes only 2 to 6 hours of workshops and its objective is to ensure that the investment directly addresses the problem that it is planned to 'fix'. Once the investment logic is verified we work with the client to develop a plan to monitor and report the delivery of the identified benefits over the lifecycle of the investment.

The deliverable from the Investment Management Facilitation is a one page Investment Logic Map which is a framework defining the investment, its objectives, benefits, and the organisational changes needed, in order to achieve the identified benefits. This Investment Logic Map summarises the investment so the 'logic' behind the investment can be determined at a glance and constantly verified during the lifecycle of the investment.

This Investment Logic Map is the key component for documentation output from the IMS workshops, which also includes the quantitative assessment of the benefits in the form of KPIs and the Benefits Monitoring Plan . These documents support the Business Case for the investment and commit the person proposing the investment to be fully accountable for its outcomes over the life of the investment.

Total Metrics have been a member of the Government EServices panel since 2003 and are Government Certified Investment Management Standard Facilitators. The key deliverable from this Investment Logic Standard is the quantification and monitoring of benefits, Total Metrics, has over 15 years experience facilitating client workshops to define key performance measures for their internal processes. This experience is essential in developing the Key Performance Indicators that underpin the Investment Logic Maps and the Benefits Management Plan.

Total Metrics also act in the role of using their extensive measurement expertise in assisting other IMS facilitators develop their KPIs for the Benefits Management Plan.

Background to the IMS Methodology

When an organization is planning a new investment, before approving the budget, the decision makers need to have objective evidence that the investment will yield the proposed returns and address the perceived problem. Typically in each budget cycle, multiple proposed Investments compete with each other for limited available funds. To justify their business case, candidate investments are usually supported by very detailed and lengthy documentation which needs to be read and evaluated, prioritised and then selected based on merit. To optimize its chance of selection, the Business Cases supporting the investment often claim significant benefits for the organisation but with little objective evidence of how the investment will deliver these benefits. Typically once the investment is approved and the implementation project is started no one monitors the delivery of the proposed benefits or verifies the original claims of the investment.

This Investment Management Methodology helps ensure that organizations optimize their investment dollars by ensuring that:

Before putting forward a business case the proposers have objective evidence that their proposed investments will address the perceived problem so that time and money is not wasted with a solution finding a problem to fix.
The investment's benefits are mapped directly to the investment and each benefits has quantified key performance indicators that can be monitored over the lifetime of the investment so the validity of any investment is constantly monitored and budgets can be withheld or the investment cancelled if it is not achieving the benefits.
The investment, and the problem it is addressing, it's objectives, benefits and organizational impacts are clearly defined on a one page diagram (Investment Logic Map) so that management can quickly sort the viable investments from the ones with less merit and the investment logic can be constantly checked for validity if the rationale on which it is based has subsequently changed.
The person responsible for the Investment is responsible for the delivery of the benefits from the Investment, ensuring that money is spent where it has the most impact to the organization and people do not propose expenditure for which they will be held responsible if it doesn't meet expectations.

Structure of the IMS Workshops and the Deliverables

The IMS Methodology Workshops have three distinct outputs:

Problem Definition - identifies the organization's issues, risks and threats that the investment is to planned to minimize or address. The problem may also be an 'opportunity' that will be missed if the investment is not made. The objectives of the investment in terms of the outcomes the organization is seeking. Clearly identifying and prioritizing the problems targeted by the investment ensures the investment strategy is aligned with the organizational goals and constraints.
Benefits Definition - identifies the positive differences the investment will make to the organization. These benefits must be measurable and directly attributable to the investment.
Solutions Definition - identifies the capital expenditures, operating costs and the impact on people and processes to implement the investment and achieve the benefits

Depending on the size of the investment and the complexity of the problem the above definitions may be developed in a single workshop. However typically they take between 1 to 2 hour workshops to complete along with around 2 days review and development time.

The rationale for the Investment is documented in the first workshop in a prescribed framework model called an Investment Logic Map (ILM). The second and third workshops build on the ILM to develop the Concept Brief and Benefits Plan.

Investment Logic Map - see attached sample ILM. The ILM forms the basis of all subsequent investment decision making and is ultimately used to measure the effectiveness of the investment

Investment Concept Brief - which identifies likely costs, risks, dependencies and deliverables of the proposed solution

Benefits Management Plan - which defines the expected benefits, the pre-requisites for the delivery of each benefit, how the benefit will be measured and who has responsibility for delivering the benefit

Each workshop has 2 to 6 participant's who are stakeholders in the investment and perform a prescribed roles, with defined responsibilities in the workshop.

Download Total Metrics' Investment Benefits Management Brochure

The Total Metrics consulting effort charged for each of the above activities is determined by:

the size and complexity of the investment,
the number of workshops required to completely document the investment
which IMS Activities we are asked to perform.