Benefits Management Center of Expertise  

Benefits Management

Benefits management is about benefits delivery.

Benefits management starts in the business case where it adds clarity and focus to the project and its purpose – defining the project’s measures of success in business terms.

It is then embedded in to the project delivery processes so that every step forward is a step towards the delivery of the benefits.

Benefits are then realized progressively throughout the duration of the project, immediately on implementation and subsequently until the full available value has been achieved.

The TOP Value Equation™

“Benefits” consist of five key elements as illustrated in The TOP Value Equation™

A    The project and change activities…

O    individually and cumulatively deliver clear, specified, measurable business end states – called ‘desired business outcomes’…

B     that enable, support and deliver the benefits that are measurable…

V    some of which have a financial value…

D    and this value is determined by and tracked through the value drivers.

Embedded benefits management

You commission projects to deliver business benefits. Therefore, embedding benefits management into the project delivery process ensures it is not ‘extra work’ by actually adds clarity to the project and focus to the project activities. “Now I know what this project is trying to achieve” is a common refrain from project managers when they’ve defined their project’s value proposition.

Benefits realization

Benefits only have value when they’re realized. Benefits realization management consists of five steps

• Identify the outcomes, benefits and value
• Plan their delivery through and subsequent to the project
• Action the plans
• Track progress and the current value of the benefits
• Measure the realized value and analyse any variances.

Benefits measurement

Benefits measurement is important but it is only the scorecard. What is important is to track the ‘value drivers’ — the assumptions and bases of the value calculations — as some of these can legitimately change during the project and significantly change (up or down) the actual value available to be realized. There is no point chasing value that has disappeared due to, for example, changes in interest rates; but there is value in chasing increases in value due to, for example, price increases. You need to know the current value of all of your major benefits at any time.

Implementing Benefits Management

Business case

We start with the business case, as the benefits to be managed need to be clearly defined here. However, few existing business cases effectively allow the ‘value proposition’ — the value to be delivered through the project — to be clearly defined for subsequent tracking and measurement.

Benefits planning

Benefits planning should not be wildly different or separate from normal project and change planning. Benefits are delivered through change – changing from some current to a defined future state. This requires real change management (rather than just ‘training and communications’). The required change activities need to be specified, planned, actioned, tracked and measured. Standard project delivery management but with a clear focus on benefits realization.

Project reporting

Project reporting now needs to include progress towards the realization of the benefits — the outcomes, benefits and value — and the current value of these benefits if they have changed. Some reporting may need to be refocused while some benefits-specific reporting may need to be introduced.

Value protection

Benefits identified in the business case now need to be protected from inadvertent loss. Value can be lost through decisions made, scope changes, delivery deficiencies, and other factors and events. All aspects of the project need to be aligned to and managed for benefits delivery. The governance team in particular needs to be refocused onto its role of value protection so as to ensure the maximum available value is realized.

Value delivery (and measurement)

Value only becomes value when it is delivered. Outcomes and benefits need to be progressively delivered, measured as delivered, and their value quantified (based on the current values of the quantification bases). Any variances can be easily identified as caused by events/decisions made external to the project or within the project/governance environment. Some can be remediated, some cannot – but you need to know which is which.

Benefits maximization

The overall goal is benefits maximization – to deliver the most ‘gain’ for the endured ‘pain’.

Our benefits management approach is an end-to-end process that leverages the existing project delivery tools and techniques, refocusing them as necessary so as to increase the visibility and attention paid to all aspects of benefits delivery.

Rather than ‘adding’ benefits management to the project workload, we refocus the project workload to deliver the benefits and embed the required activities into the project delivery lifecycle. This is a faster, easier, more effective approach than the standard largely separate-to-the-project approach to benefits management.