Five Steps to a Benefit Profile

While the more confusing concepts in programme management is that the benefits profile. Many people struggle to get to grips with what they need to do in order to produce a benefit profile for project or programme. I think this is because guidance offered is is quite high level it doesn’t really give you a steps by step approach to the development of the benefits profile. So this blog post share some of the experiences we’ve had developing benefits profiles for some of our larger clients. We found that benefits profile is like a mirror image of the cost plan. Many of the tools and techniques that were used for cost planning such as work breakdown structure and project schedule can be used to help develop the benefits profile for the project. This is what we can do in a five-step plan to producing a benefits profile.
 
Step 1) Develop a benefits break down structure to prompt the identification of benefits.
This will breakdown the overall strategic objectives into a number of benefits areas such as efficiency, improved reliability or increased capacity. Use of a standard structure can help to capture the full range of benefits from a programme. So just like we have a work breakdown structure benefits breakdown structure lets us identify common areas of benefits. For example one area benefit might increase sales or improved efficiency. Once we develop the benefits breakdown structure we can identify common areas of benefit apply across the programmes and projects in the organisation. So in the same way that we can build up work breakdown structure from the building blocks of other projects we can build up the benefits from the building blocks of other projects and programmes.
 
Step 2) Define how each benefit it will be measured, ideally using existing business KPIs e.g. reliability metrics, etc.
There is an old saying that what gets measured is what gets done. You can’t measure benefit and is very difficult to know that benefits been achieved or how accurately we are going to track achievements that benefit. So next step in our five stage plan is define the benefit owner and the KPI do can use to measure the impact of the benefit on the business. If is a benefit we really care about it should properly impact on existing performance measures used in the business. If benefits don’t have any impact on the business KPIs then we could really ask ourselves does the business really care about the benefits we delivering. Another reason for choosing business KPIs to measure benefits is a data will already be available for historic trends and so we can realistically evaluate the impact of the programme on the performance of the business.
 
Step 3) Estimate the value of each benefit over time.
For each benefit estimate the impact of the programme will have on the measured KPIs. So we know what the KPI’s are the next step is to estimate with the benefit owner what the impact the programme will have on these KPI’s. It’s really important that these estimates are done by the benefit owner to establish ownership. This same principle we adopt a producing a bottom up estimate of cost, but try to ask people are going to do the work to estimate the cost of doing the work. In this case the people responsible for the benefit to estimate what the likely benefits going to be. Everyone is very comfortable with fact the cost estimates can have high degrees of uncertainty early in the project life-cycle and we should expect the same for benefits.
That research indicates that an average with three times worse and estimating benefits the me are estimating costs. Does this mean we should give up and not try to estimate the benefits. The answer to this question is NO. We don’t know what benefit you are aiming for is highly likely you’ll achieve no benefit at all. As we costs an estimate is something we can measure ourselves against so it is with benefits and estimate the benefit gives a summer we can target even if we know they were unlikely to achieve  the exact benefit we estimated. Because of the uncertainties involved we could say achieve significantly more benefit than we anticipated depending on market conditions.
 
Step 4) Develop a benefit register using the benefit profiles.
Having quantified the benefits the next step in producing benefit profile is to predict when these benefits will be realised. While this is just a planning exercise in the same way they were schedule at the work we can schedule out the benefits. In fact we found that we can use the same scheduling tools that we use for planning the delivery the work to plan the realisation the benefits. Using a subproject is quite easy to link the benefits to the delivery of the products into one integrated cost benefit program. This way delays in the production of the products can be mapped easily to the delays in the realisation of the benefits.
Step 5) Link the benefit profile to the project schedule deliverables and outcomes to produce a benefits realisation plan.
Sometimes we find the realisation of benefit is dependent upon more than one project. For the example the benefits have improved healthcare may be reduced time off work, but this depends upon not only the completion of a new hospital the training of more nurses and doctors to work within a hospital. To map out the dependencies between the different outcomes and the benefits we can link the different benefits in the same way that we link project schedule this we call benefit map.
Hopefully, you can see the step-by-step approach to production of a benefit profile provides us with structured to tackle the problem of understand the benefits of projects and programmes.