Event report: Portfolio Management – Everything you need to know

This popular event at BAWA kicked off the Autumn events in Bristol with a look at Portfolio management. Our speaker tonight, Petula Alison, is Co-Chair of APM’s Portfolio Management Specific Interest Group, and is Senior Change and Portfolio Planning Manager at Yorkshire Building Society (YBS). Her presentation draws on a case study from YBS dealing with their mergers and acquisition programme.

Petula explained the history of YBS and the background leading to their mergers and acquisition programme, which was driven by the need to survive following the financial crisis of 2008. This started with the smaller Barnsley Building Society, which provided a lot of lessons, and then included Norwich and Peterborough and the Chelsea BS. YBS is now the 3^rd largest mutual BS.

The mergers and acquisition activity resulted in a need to assess its operating costs and distribution channels and head office locations. It was essential to rationalise and cut costs and become more efficient in order to then grow and transform. This led to the creation of a transformation portfolio with a budget of £300M over 5 years.

Over the programme the YBS capability has matured as it has learned lessons from the acquisitons and progression of the Transformation Portfolio. The team are now expected to achieve more with less, they use a federated change model rather than a centralist one, and have a bimodal portfolio waterfall and various agile delivery models, and are focusing on digitalisation.

Portfolio planning and management is not easy. The key is communication and story telling for different stakeholders. Senior staff need simple views that bring the story and impact of change to life, junior staff need to understand what change means of them in their language.

The portfolio vision must be aligned with the organisation’s vision and strategy. YBS Portfolio/Change management office aims to be independent and objective, focussed on what matters, valued for opinions, challenge and insights they can offer, deliver clear messages to staff, customers and stakeholders, and develop talent in their staff.

The office developed a revised change management life cycle which is a hybrid of waterfall and agile. A steering group assesses ‘new changes’ and accepts, rejects them. At the start not everyone was brought into the change – but they are now, stakeholder engagement is key. Change champions have been introduced and they can provide a key reality check on potential challenges. It is essential that there is regular testing of the portfolio against the business case. For example, the planned current account programme was halted because of changes in the external environment – this released resource for other priority projects.

The YBS enterprise portfolio prioritises project types. Regulatory projects are P1. Infrastructure projects are P2. Cost reduction projects P3 and growth of business P4.

The portfolio is dynamic and has to be assessed and adjusted being driven by understanding risk and mitigation as well as the potential ripple effects of actions, and the impact of the external environment of business case viability. External influences over the 5 years have included the rise of mobile banking, base rate changes and Brexit. This has led to changing priorities, for example the mortgage platform had a high priority, but was then dropped in priority.

Benefits and outcomes have included: Regulation – GDPR and open banking; Infrastructure – New IT, new phone system, move to paperless; Productivity – right sizing of branch network, use of agencies, reduced Head Offices, lean process capability; Growth – mortgage platform, and digital savings apps.

Petula reflected on why the YBS portfolio approach has been a success. The key was to have an effective Portfolio Sponsor and the right governance framework with the appropriate level of control. Effective engagement with stakeholders about business priorities, and excellent relationships with delivery teams seeking a culture of ‘no surprises’. Priorities change constantly, but it is essential to focus on achieving the strategic goals, and regular review of the business case – is it still relevant?

Martin Gosden

SWWE Branch Chairman