It is a self-evident truth that you commission projects to realise particular benefits, otherwise you would stay with the status quo.
Yet two-thirds of organisations don't measure whether the desired benefits of a project are realised. What’s more, even those organisations that do measure project benefits, tend to do so using solutions that are either too simplistic or too complex and costly.
Benefits measurement can be simple if you just follow this 10-step process:
1. Start with the end defined: Clearly identify your desired business outcomes, or where you want your business to be at the end of the project.
2. Identify the benefits that come with achieving these desired business outcomes. Link each benefit to the outcome that will deliver it.
3. Identify ALL of the changes required to move from the current state of your business to the desired future state. This is rarely done, as project teams tend to only identify the work they need to do. When you align each change to a specific outcome, you can compute its cost of delivery. As you already know each outcome’s value (step 2) you can now identify high cost/low value outcomes that can be eradicated. This can significantly reduce project costs.
4. Define the outcomes the project aims to deliver as a subset of the desired outcomes of the business. This step maintains a clear link between what the business wants (step 1) and what the project will deliver. Few projects have this link.
5. Identify the project benefits that will immediately follow once the project has been delivered. This obvious step will be an anathema to many project managers who honestly believe they should have nothing to do with benefits.
6. Assign the change activities required to deliver the project outcomes and benefits. This step again reframes the role of the project manager as a manger of change. Many project managers struggle with the concept that all projects are change projects, but 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.
8. Track and measure the delivery of the (measurable) project outcomes and benefits so that you know when to start realising the remaining business outcomes and benefits.
9. Action the remaining business change activities to realise the post-project benefits and value.
10. Track and measure the completion of each activity and bank the resultant value.
Measuring a project’s benefits really can be that simple, yet fewer than 5% of organisations worldwide are doing it. Those that do have a sustainable competitive edge worth up to 30% over 15 years in terms of increased profitability. [!1!]
[!1!] How to put your money where your strategy is – Hall, Lovallo, Musters, McKinsey Quarterly March 2012