Pilot project and process review for DIT

Process review of the Northern Powerhouse pilot-project to implement the prioritisation of RIO's portfolio of development deals, after its integration in the DIT's Capital Projects Portfolio. Process optimization for deals promotion

Our Consultant who worked on this project: Cristina

THE MANDATE

Following the Government increased committed to regenerate the Midlands Engine - to deliver a vision of a thriving socio-economic environment, and high accessibility and connectivity to other regions and to the world - a core team of EY consultants, including our resource Cristina, received the mandate to streamline the Northern Powerhouse pilot processes to learn from it, and optimise it to roll-out the same initiative in the Midlands Engine region:

1. shortlist the Midlands’ best R.E. deals from the former-RIO portfolio, prioritising those with the highest potential of attracting foreign investment
2. publish a pitch book for the Midlands Investment Portfolio, with the shortlisted real estate and capital projects development opportunities to present at R.E. global events
3. organising and delivering initiatives to identify investors, record their contact details and interact with them to promote the Midlands deals.

The mandate also asked to ensure that the available capital investment opportunities across the Midlands were presented in a way that was clear to investors, with relevant data for their decision making.

The new pitch book was paramount for the marketing and promotional efforts to present the Midlands Engine Investment Portfolio in real estate, which was meant to be launched at the 2017 MIPIM global event for R.E. and land development investment, where a Midlands pavilion was presented for the first time, and then re-proposed in 2018 and 2019.

This initiative to promote the Midlands investment deals in real estate was part of a much wider effort of the DIT to propose various opportunities for foreign investment in the same region, to drive inward investment also in other sectors, and attract capital investment for the region regeneration. (The activities aimed at contacting foreign investors, and rise equity, included International Trade Summits, a Midlands’ Export Champions programme, Trade & Investment Conferences, and other events and trade missions in target markets, to show the Midlands openness for business).

Our Evolution’s resource Cristina was tasked with the assignment of:
1. mapping the processes which was followed the previous year to shortlist the deals for the Northern Powerhouse in the pilot version for the former-RIO portfolio, also interviewing its stakeholders and sponsors to understand what were the pain points, which parts of the process they felt weren’t working well and why, and what were the aspirations for its improvement;
2. analyse the Northern Powerhouse pilot process step by step, to understand if the same scopes could be met with less resource intensive activities, and if there were duplicate efforts for the same scopes that could be avoided;
3. redesign the Northern Powerhouse process to streamline it when rolling it for the Midlands Engine, to save time and cut cost for its implementation, which on the pilot project in the Northern Powerhouse proved too lengthy and inefficient, which duplicate steps and too many in person meetings requiring high participants numbers.


THE SOLUTION

The first contribute of our resource was to map out the pilot process flows that were followed to shortlist and promote the former-RIO portfolio of opportunities in the Northern Powerhouse. She did this by interviewing stakeholders and then breaking down the operations to be carried out into a series of process steps, visualising them in a process map with swim lines that identified the ownership of each step (which was most often a shared ownership).

She identified, in the overall efforts that were described to her, 3 main processes associated with 3 change projects, which impacted multiple dimensions of the DIT business as usual activities, as that involved the participation of several teams and departments at national and regional level:

1. the process for minimum criteria assessment: to decide which new deals were to take into consideration to evaluate their inclusion in the portfolio, shortlisting those that met the requirement. Plus, the prioritisation process: to shorten the list of already included projects, and divest those with lowest priority ranking.
2. the process to produce of a new pitch book: to present the selected shortlist of prioritised deals, showcased with standardised and investor-relevant data.
3. the process to mobilise the equity brokers: to coordinate the teams tasked with the promotion of deals to foreign investors to rise equity. This included all promotional efforts: from the identification of investors to contact, to the organisation of meetings, participation at relevant investors events and the remote interactions for deals initiation and closure.

There were several changes in the implement pilot that deviated the process from the portfolio prioritisation strategy that was proposed by her team the previous year: for example, the only minimum criteria - to select the deals to include in the prioritisation efforts - were the requirement of a minimum £100m expected GDV, and to be investment ready, having planning permit.

The processes weren’t technically complex, however, especially the first was implemented in its pilot version with a significant number of in-person meetings, with a high number of stakeholders, to validate or decide whether to include some lower ranking deals in the portfolio, once they passed the minimum criteria threshold (in the first pilot roll-out in the Northern Powerhouse - on which Cristina wasn’t involved operatively - the possible investment deals to evaluate for inclusion at the end were prioritised by assigning a colour-code status).
The high number of meetings for discernment and communications of the decisions created bottlenecks, and some were avoidable, as repetitive in scope.
These change projects for the pilot roll-out were therefore to re-plan, and Cristina had to propose how to streamline the processes and map the new one to deliver the same operations in the Midlands Engine.

Another bottleneck was the extremely high number of stakeholders involved in all the meetings to decide or validate which deals to include in the portfolio (the Midlands Engine Partnership, the West Midlands Combined Authority, Local Enterprise Partnerships, Local Authorities, education establishments, businesses and other stakeholders who were invited to the meetings as able to understand and best advice about the opportunities and challenges the Midlands region faced, and what was more viable and impactful to deliver growth and productivity across the region). This also was an aspect to simplify in the re-design and optimised process.

After a careful analysis of each step in the process - evaluating costs in term of time and resources against the scope they were meant to achieve, and the dependencies among the steps - which made some actions essential for others - our resource Cristina could propose a streamlined process flow for the future state:

Cristina's new process map was meant to facilitate the understanding of the actions of each entity involved in the process, to allow each participant stakeholder to identify and tide their tasks into their schedules, once they were made all aware of what they needed to be doing.



THE BENEFITS

Thanks to the implementation of this optimised process for the DIT - which in its streamlined version permitted to save circa 40% in completion time - it was possible to shortlist from the former-RIO portfolio 19 investment-ready real estate development opportunities with high liability of attracting foreign investment. These prioritised Midlands deals were worth £7Bn in total.

The prioritised investment deals proposals were showcased at the Midlands Pavilion at the global real estate MIPIM event in March 2017 in Cannes:
by presenting them to investors with the new pitch book - which contained information to accelerate investment decision making - and by hosting more than 50 events, such as panels and presentations, as part of the efforts to promote the opportunities to invest in real estate projects in the region. This effort generated more than 30K visits to the Midlands pavilion.

The pitch book - for the former-RIO’s portfolio of Midlands’ land regeneration investment opportunities - was published as planned in its printed version. While the proposed interactive live digital tool to enable the portfolio exploratory activities by each investor - thanks to the use of filters to source deals - wasn’t implemented with initially advised Excel database solution to access data that Cristina had proposed the previous year:

the new exploratory tool for the portfolio was built with the same logic of Cristina's initially proposed Excel tool, but using a different technology. It was in fact delivered in a live online version only, where it was possible to filter real estate deals from the former-RIO portfolio among other DIT investment opportunities on the same platform, which included also sectors other than R.E. and land regeneration.

The filters to select deals from the former-RIO portfolio on the web version provided to the investors an array of opportunities that were searchable from a continuously updatable source, delivering the benefit of optimised access to current information and data for each deal. This solution enabled the prospective foreign investors to model predictive business outcomes in order to assess the potential returns and risks for each proposed R.E. deal.

On the interactive pitch book web version - to source investment proposals in real estate from the former-RIO portfolio - at the end the only filters for the investors were ‘region’ and ‘scale’ (meaning here: level of achievable GDV). The information provided consistently to investors for each project were 1. Location, 2. Project promoter, 3. Scale, 4. Sector (meaning here: proposed R.E. developments typology mix: e.g. Commercial, such as Offices, Retail and Hospitality; Residential and Mixed Use; Manufacturing and Logistics).


LINKS

The current pitch book of Real Estate deals for all the UK, produced also thanks to the new process to shortlist Midlands land development deals, the applied UK wide:
https://directory-cms-public.s3.amazonaws.com/documents/Homes-in-England-Investment-Opportunities-15_October_2019_1.pdf

The current web version of the DIT Portfolio of multi sector opportunities for foreign investment, where also the shortlisted former-RIO real estate development deals for land regeneration can be found, and filtered by GDV and by Region:
https://www.great.gov.uk/international/content/opportunities/?region=The+Midlands&sort_by=Project+name%3A+A+to+Z

The MIPID 2017 event, where the newly prioritised former-RIO portfolio of land development deals for the Midlands were presented, as part of the DIT efforts to showcase opportunities to foreign investors in this sector:
https://www.midlandsengine.org/wp-content/uploads/2017/04/The-Midlander-April-2017.html


The pitch book and events for the Midlands land development deals were presented for the first time at the MIPIM real estate and land development investment event in Cannes in 2017, which was repeated in 2018 and 2019:
http://midlandsukmipim.com/video-mipim-minute/

Current DIT pitch book including deals in the ex-RIO and capital projects portfolios
Current DIT pitch book including deals in the ex-RIO and capital projects portfolios

The new DIT pitch book of real estate and capital projects opportunities includes more data relevant to enable investors decision making, and the presented data are consistent among deals, facilitating their comparison

CLICK ON THE IMAGE FOR MORE INFO AND SLIDE SHOW

What People Say

All 30 written comments regarding Cristina's work are evidenced in writing by their original MS Outlook files and a S.A.R. received via email, archived in its original delivery email.

“As a project manager Cristina has consistently worked at Senior Consultant level.

She has managed the rollout of our biggest process improvement project.

The training guide she produced for the process improvement project was excellent and will be a key enabler for the transition phase.

I have been particularly impressed with her analytical skills and her ability to break problems down into key components and identify workable solutions.

Her briefings have been well researched and to a very high standard.”

— Stuart Bourn, Managing Director at Ernst & Young LLP