It is a self-evident truth that you commission projects to realise the benefits, otherwise you’d stay with the status quo. Yet most organisations don’t measure whether or not they realise their projects’ benefits, and many of those that do implement ‘benefits’ that are either too simplistic or too complex and costly.
Benefits management can be simple if you follow this 10-step process:
1. Define business outcomes
Outline where you want the business to be at the end of the project, when everything is working ‘just right’. The desired outcomes/end states of your business need to be defined in clear, specific and measurable terms.
2. Identify benefits
Identify the benefits that come with achieving these desired business outcomes. Link each benefit to the outcome that will deliver it. This is important, as it permits a realistic expectation of what the project will and will not deliver.
3. Outline changes and optimise
Identify ALL of the changes required to move you from your current position to the defined future state. When you align the change activities to each outcome you can compute each outcome’s cost of delivery. As you already know each outcome’s value from step 2, you can now identify high cost/low value outcomes to be deleted. This ‘optimisation’ step can reduce project costs by up to 40%.
4. Define project outcomes
Define the outcomes the project is to deliver. These should be defined as a subset of the business’s desired outcomes. This step maintains a clear link between what the business wants – outlined in step 1 – and what the project will deliver.
5. Allocate benefits
Allocate to the project the benefits that will come immediately on its delivery. This obvious step will be an anathema to many project managers, who honestly believe they should have nothing to do with benefits. What do they think they are doing the project for?
6. Assign changes
Assign to the project the change activities required to deliver the project outcomes and their immediate benefits. This step again reframes the role of the project manager as a manger of change, a concept many project managers struggle with. What do they think they are doing if not implementing change?
7. Deliver the project
The project has now become your primary benefits delivery vehicle, so there is no need for a separate ‘benefits management’ process.
8. Monitor performance
Track and measure the delivery of the project outcomes and benefits so that you know when to start realising the remaining business outcomes and benefits.
9. Action outstanding activities
Action the remaining business change activities to realise the post-project business outcomes, benefits and value.
10. Bank the value
Track and measure the delivery of each outcome and benefit, and bank the resultant value.
You need to define the business value, allocate a subset to the project to deliver, and then track and measure the project and business activities as they deliver their changes, outcomes, benefits, and value.
It really is that simple, but fewer than 5% of organisations worldwide engage in effective benefits management. Those that do have a sustainable competitive edge that generates up to 30% in terms of increased profitability and shareholder value over time.