Whenever we embark on a project, there are benefits that we want to achieve. Benefits management is the process of identifying, defining, planning, tracking, and realising these benefits. It is all about making sure that you extract benefits from the outputs and outcomes of your project. With that being said, continue reading to discover everything you need to know.
- What is a benefit?
- What is benefits management in project management?
- Some suggested areas where benefits may be identified
- Advantages of benefit management in project management
- Who is responsible for benefits management?
- Best practice in benefits management
- Tracking your benefits realisation plan is critical
- Final words on benefits management
Before we can even begin to look at the benefits management process, we need to understand what a benefit actually is. A benefit can be defined as the positive consequences of a change. It is a measurable and quantifiable improvement that results from an outcome that is perceived as positive by the stakeholder, and which is going to typically have a tangible value expressed in resource or monetary terms. Benefits will be realised as a consequence of activities undertaken to impact change. The opposite of a benefit is known as a dis-benefit, and this relates to negative consequences that happen due to change.
Benefits management involves investing your resources and time so that you can drive positive changes within a project. To do this, you must identify, plan, measure, and track benefits from the start of the project until the end, i.e. when you have achieved all of the benefits.
Benefits management incorporates benefits that are time-bound, realistic, agreed upon, measurable, and specific. These benefits can apply to strategy planning, project benefits, process, or organisational change. All of these definitions respond to the requirement for business strategies and project outcomes to be aligned. Benefits management always aims to boost the success of any project, although benefits management can speak to outcomes that are bigger than an individual project.
According to Project Management Institute (PMI), a lot of organisations will not measure benefits, and therefore, they do not manage them either. This means that only a limited number of businesses are achieving the benefits they set out to. Meeting project expectations should be the bare minimum, and you need to focus greater attention on benefits management.
Some suggested areas where benefits may be identified
To give you a better understanding of the sort of benefits that you may identify at your business, we list at some suggested areas to consider:
- Strategic fit – These are benefits that will contribute to the desired benefits of other initiatives, or make them achievable.
- Revenue acceleration or enhancement – These are the benefits that will bring heightened revenue or the same revenue within a shorter frame of time.
- Economy – These are benefits that will lower costs while maintaining quality as well, typically referred to as cost reduction.
- Flexibility – These sorts of benefits will enable a business to respond to change without additional expenditure being incurred.
- Risk reduction – These sorts of benefits will enable a business to be more prepared for the future by, for instance, not providing new courses of action or failing to close off the course of action.
- HR management or personnel – These benefits relate to a more motivated and better workforce, which can then result in a whole host of other benefits, such as increased productivity or flexibility.
- Process improvement – These benefits will enable a business to do the same job with fewer resources, for example, enabling cost reductions.
- Internal management – Such benefits are internal to the business, for example, improving the management process or decision-making.
- Quality of service – Such benefits relate to customers, for example, providing information in a way the consumer wants for offering a faster response to queries.
- Legal or policy requirement – Finally, such benefits enable a business to fulfil their policy objectives or to satisfy legal requirements whereby the organisation does not have any choice but to comply.
Hopefully, these examples will have helped you to get a good understanding of the different areas whereby benefits can be identified ahead of your next project.
Before we reveal more about the different practices for great benefits management, let’s take a look at the benefits that are associated with this.
A structured approach to benefits management can enable you to do the following:
- Provide a solid basis for post-project review
- Focus attention on the benefits that are the most important
- Identify the risks associated with change, manage, and mitigate them
- Increase the chances of successful business change
- Enhance communications by offering an evidence-based rationale for change
- Enhance stakeholder awareness of, and engagement with, the project or programme
- Maintain focus on the final outcomes
- Create a robust business case
Focusing on benefits provides you with improved decisions when it comes to project and programme resource allocation while also speeding up organisational transformation.
When you hear adverts that state that the best-in-class businesses utilise specific vendors’ products, they want you to assume that the reverse is also accurate. If you buy our product, you will instantly become one of the top companies. However, if this were to be the case, then simply finishing projects as planned would be enough for company success. The fact is that the “best” business, in reality, is the one that is defined as having delivered a vision of a future state that is measured by the realisation of specifically targeted benefits.
To the organisation, just having a new enterprise IT system or a product you have just developed is not on its own enough to give you the status as the best-in-class business. In addition, while products tend to be measured by the efficiency in which they deliver a result, for example, schedule/cost performance indices, programmes are typically investments that expect a return on investment to be leveraged over a sustained period of time. Not only does this require delivering new capabilities, but also enabling organisational transformation and realising the expected benefits.
Organisational transformation demands leadership commitment and commitment from the people who need to change. People will find it easier to commit to change if they believe that there is either going to be a benefit to them, the customer, or the organisation.
Also, when there are defined benefits and the program components are aligned to these benefits, the program becomes a stream of processes and projects that provide value to the organisation. This will readily enable the programme to engage in value optimisation methodologies, such as lean.
Another important benefit and attribute of benefits alignment are that every program activity is validated as a result of its alignment to the objectives of the benefit. You can create a benefits map that will graphically display the alignment of component project outputs with the program benefits.
In this regard, program component activities that support intended benefits can be identified with ease and each project’s impact on the program value can be derived.
The main roles and responsibilities that are relevant to benefits management are as follows:
- Senior Responsible Owner – This is the individual who is accountable and responsible for project or programme success underpinned by the delivery of expected benefits.
- Project Manager or Programme Manager – This is the person(s) responsible for making sure of correct day-to-day management, with there being a strong focusing on realising benefits.
- Benefits Manager or Business Change Agent – The person who is responsible for directing and overseeing transitional arrangements into business as usual, and embedding new capability to deliver anticipated benefits.
- Project Management Office or Programme – This individual is responsible for the maintenance of a benefit documentation library for the project or programme, including version control. The PMO may also have the responsibility of providing advice and support regarding benefits management and for reporting on the progress toward benefits realisation.
- Organisational Board – This board will be responsible for maintaining strategic oversight of the entire portfolio of benefits that are projected across the organisation.
In terms of when you should start benefits management, it is advisable to do so as soon as possible in the project or programme, typically long before any implementation work has been carried out. If this is not feasible, a reduced process may sometimes be carried out at a later stage so long as there is still going to be time to capture accurate pre-implementation benefit baselines.
As you can see, there are a lot of different benefits that are associated with practicing benefits management. However, you are only going to achieve this with a careful and considered approach.
With that in mind, we provide you with some types of how to be effective when it comes to benefits management. Firstly, let’s reveal how to create a benefits management plan. This will identify, track, and monitor benefits over the life cycle of your project, and often once the project has finished. This is used to ensure the business and the benefit owners, i.e. the chief beneficiaries, are focused on the benefits throughout this process.
Steps for success
Here are the steps that we recommend you follow when creating a benefits management plan:
- Start off by identifying the benefits. What are the beneficial outcomes to the organisation as a whole and the project stakeholders? You need to do this before the project commences.
- Create a plan that will help you to realise these benefits, including any tasks, risks, and assumptions that are required so that you can reach these potential benefits.
- You need to establish a metric for every benefit. This is important to make sure the outcomes are measured and can be tracked. You want to be sure that your project is on the right track when it comes to achieving your benefits.
- You need to define the responsibilities and roles of those who are going to manage the benefits.
- Add a plan for taking care of the benefits that are going to continue once the project is finished.
- Next, put together a reporting plan so that you can communicate the project status to all stakeholders, either through face-to-face conferences, meetings, or regular reports.
- Put the plan into action
- Assess the project performance after it closes so that benefits can be sustained after the project has been implemented.
In addition to putting together a benefit managements plan, we recommend that you create a benefits dependency map. It is advisable to create this because it will link the benefits to your strategic business objectives. This should be broken up into five parts:
- An objective that is measurable and aligns with the vision of your organisation.
- The end benefit that will motivate stakeholders to invest in your project.
- The intermediate benefits that will add to the end benefit.
- The changes that are required so that you can achieve your business objectives.
- Any system or process that supports the changes mentioned above.
There is also a benefits-depending network that defines business changes, benefits, investment objectives, enabling changes, and what sort of technology is going to be needed.
It is important to make sure you monitor your benefits realisation plan on a regular basis so that the progress of each of the key milestones can be tracked and identified for every benefit profile.
When required, the SRO may need to work or prompt with the named senior benefit owner to make sure that all planned measurement and review activities are being implemented. It is advisable that specific benefit targets are built into well-established business-planning processes.
Senior benefit owners may want to incorporate benefit targets in their strategic and operational business plans though this is going to depend on the priority and level of the benefit.
We hope we’ve provided a useful insight into benefits management and that this has helped you to get a better understanding of benefits management and why this is so important for your project. After all, we all want to make sure we can achieve as much as possible from our projects. The only way to do this is by managing your project benefits so you can be sure they bring you the results that you have in mind.