Blog Archives

Building on the Investment Logic Map for More Rigorous Front-End Programme Evaluation, An Article by Aaron Doty

Apr 21

Posted by

For some time now, I’ve been interested in the Investment Management Standard produced in-house by the Victorian Department of Treasury and Finance.  I’ve found that using an Investment Logic Map is a valuable, light weight way of mapping the logic for a business case and have posted about my use of it in the past. The Victorian Department of Treasury and Finance have released a new version of their standard which includes several different sub-types of Investment Logic Map depending on whether an investment is pitched at the organisation level, a programme of investment or an individual investment.  The latest standard can be downloaded in PDF format or in Microsoft Word format.

An evaluation of the Investment Management Standard has been published in the Evaluation Journal of Australia, a refereed journal, titled “An examination of the value of the
Victorian Government’s investment logic map as a tool for front-end evaluation of investment proposals”. This article evaluates both the theory behind the Investment Logic Map and whether it actually achieves its aim.  Although it is based on a previous version of the standard, the faults identified nontheless hold true in this latest version.  The article evaluates how an Investment Logic Map (ILM) is an integral tool to the Investment Management Standard as it serves as both a planning and evaluation tool.  The main criticisms in the article of the ILM approach is that it has “a very short chain of causality”.  The article explains that while there is value in creating the ILM as a quick assessment tool, a more rounded assessment and evaluation of the programme logic should be undertaken later on to test the assumptions made within the ILM. The article gives a detailed example of “building confidence in the causality” by extending the programme logic through intermediate outcomes and their associated assumptions.

This is an article that is very worthwhile reading. I encourage you to download it.

Extended_chain_of_outcomes

Source: Evaluation Journal of Australasia, Vol8, No. 1, 2008, p38

Posted in IT Investment, Programme Management

Leave a Comment

Tags: , , ,

Example of an Investment Logic Map

Apr 2

Posted by

One of the best artefacts that forms part of the Victorian Department of Treasury & Finance's Investment Management standard is the Investment Logic Map (ILM).  Fancy name I hear you say, but what does it actually do?  Well, producing an Investment Logic Map allows an investor to concentrate on the problem that is being solved and the benefits that the solution will provide.  Often when people are investigating a problem, they will concentrate merely on the solution, without taking the time to articulate clearly the problem space or the benefits their solution will provide to investors and their stakeholders.  You can see in my example above, that there are three main areas in the ILM that frame those areas.
 
The ILM is about expressing your business case in a single page, regardless of the size of your project.  It was built by the Victorian government for large projects.  The tricky bit is to capture the most pertinent points.  In this way it's much like an executive summary.  You shouldn't try to defeat the purpose of keeping it to one page by making your boxes so tiny that you can fit dozens of them on a page either.  Instead this process will force you to consider the problem space and capture it succinctly.  The guidelines suggest that you can expect to spend a lot of your time defining the drivers of the problem.  This is because often people think of the solution before they clearly frame the problem they're solving.
 
An ILM should be developed in a workshop with a qualified facilitator who will guide participants through the process of creating the diagram.  It is recommended that the workshop is strictly time-boxed to two hours.  No more time should be needed to develop the bones of a diagram which a facilitator will polish after the meeting within 48 hours.  If your workshop is unable to come up with an appropriate diagram in the two hours that is indicative of the weakness inherent in the investment case.
 
 
My Example – Investment Logic Map for Benefits Realisation Within IP Australia
 
I had originally created a text based business case but had previously had some success with the Investment Management standards for some other projects (producing options papers).  So I chose to go back to this guidance and came across the ILM.  It was just what I needed to frame my business case.  My ILM was originally about developing benefits maps within IP Australia.  These would link benefits identified for projects or programmes to strategic objectives or a group's (IP Australia vernacular for a division) operational plan.  As I was drawing up my business plan I was forced to think about the drivers for the problem and realised that simply mapping benefits wouldn't be enough to meet the strategic drivers and combat the problem of a lack of focus on benefits management.  So by using an ILM I was able to frame the solution at a more appropriate level for the drivers of the problem.  As this was my own initiative, I developed it at my desk and later verified it with internal stakeholders to get their buy-in.  This is the recommended path to getting familiar with developing ILMs prior to qualification.  Something I'm striving for in the near future.
 
My map still requires some polishing as it doesn't have percentage weighting on the drivers, changes or benefits yet.  I also haven't developed key performance indicators for the benefits identified.
 
Verifying Your Investment Logic Map
 
A short video (below) shows you how to verify that your ILM is on the right track. 
 
 
 
 
Please note that I'm not a qualified facilitator of the Investment Management process and you should refer to the original guidance available here for more information or employ a qualified facilitator, listed on the website. http://www.dtf.vic.gov.au/CA25713E0002EF43/WebObj/IMS_Guideline_2_PROBLEM_Definition_v3-5/$File/IMS_Guideline_2_PROBLEM_Definition_v3-5.pdf

Posted in IT Investment, Programme Management

1 Comment

Tags: , , ,

Follow

Get every new post delivered to your Inbox.

Join 583 other followers