What is the value of assurance?
In an increasingly digital world, organisations need to deliver even more customer centric solutions at unprecedented velocity. This, as well as growing workplace and resource flexibility, and different delivery approaches (most prominently agile), highlights that the need for an effective assurance framework has never been more critical.
Stakeholders continue to look to extract as much value from an organisation’s operating model as possible with an increasing need for the ‘three lines of defence’ to prove the value of their activities and assurance activity is no exception to this.
In attempting to provide a framework to consider the value assurance provides to an organisation it would be helpful to consider the key rationale behind why organisations perform assurance:
- Keeping an organisation safe by identifying under reported risk(s).
- Ensuring consistency by supporting the adoption of corporate and industry best practice.
- Providing insight through an ‘assurance conduit’ to aggregate and cascade delivery insight enterprise wide.
As an organisation’s assurance model matures it will be able to pivot its output towards a drive for value creation more and more. This could be measured through structured high level ‘value drivers’ which are key areas that should be considered when conducting assurance activity and in the output delivered to stakeholders as they can encourage value for an organisation. Some value drivers could include how to:
- increase delivery speed;
- remove delivery cost;
- reduce business cost;
- accelerate benefit delivery;
- avoid business risk;
- increase business value.
The attempt to allocate monetary benefit from each piece of assurance oversight is an early quick win to promote the value of assurance but is likely to miss the greater benefit from aggregated insight that drives wider organisational or procedural change, reaping larger and longer-term financial benefit. For this to happen organisational change is often required such as:
- A cultural shift with decision makers embracing assurance outputs as key drivers for change; and
- recognising that to pivot an organisation’s assurance activity towards value creation may require the consideration of an expanded assurance offering and a change in the traditional perception of how ‘assurance’ is delivered within an organisation.
Assurance delivery is often considered only through a traditional three lines of defence model and whilst an integrated assurance approach may provide effective and efficient oversight, it may not wholly support a drive towards value creation. Achieving value creation may require additional approaches and activities that utilise more of the organisation’s resources in a flexible definition of assurance to increase the drive for value, particularly from ‘first line’ activity. Examples could include the project management community supporting each other through facilitated ‘change mentoring’ to support knowledge share and insight gathering to greater exploitation of data sets available to the organisation to identify trended change performance and areas of concern.
The role of assurance within an organisation’s value chain is compelling and can be demonstrated with relatively small amendments from a traditional control framework. It is a valuable activity because it provides holistic overview to stakeholders. Despite this, there is little historic, empirical data driven research into the value of assurance. As a result, the APM Assurance Specific Interest Group has commenced initial activity to start to pull together a common consensus as to the ‘business case’ for assurance. We will be looking to extend these investigations at our forthcoming conference on 13th November in Nottingham, where we will gather practitioner input, to narrow the current wide range of options and support our ongoing research agenda. We look forward to seeing you there.