Why do we need Benefits Management?
Simple question I hear you say, but ask yourself this: ‘Is my current project still on track to deliver the intended benefits stated in the Business Case?’
Assuming you can find the benefits in the Business Case (your project does have a Business case, doesn’t it?), they should be clearly stated in measurable terms. Otherwise, you should be asking: ‘why are we in the middle of this project? Why are we doing this?’
Interestingly, from facilitating programme and project management workshops I generally find that benefits are often an afterthought. A common response is: ‘It’s not my responsibility’.
Wait a minute… whose responsibility is it?
Let’s go back to the drawing board. Projects bring about change in the organisation and therefore the investment in that change needs to be justified. Benefits need to outweigh the costs, or we come back to the ‘why are we doing this?’ So let’s, bring in the Business Case. Most of the time, project teams will focus on delivery and delivery only, however, someone should have signed off the Business Case. This is the person (or people) who should be expecting to realise the benefits after a period of time.
According to the 2015 PM-Partners PMO Trends Report, of the organisations surveyed, only 46% track benefits beyond project closure. What are the other 54% doing? A scary thought that many organisations don’t track benefits after closure.
Other similar surveys present even more startling statistics. The National Audit Office (UK) in 2011 reported that:
“the evidence shows that two-thirds of public sector projects are completed late, over budget or do not deliver the outcomes expected”.
It really all comes down to the word ‘success’. Successful projects don’t necessarily mean they just deliver a product or service. We need outcomes. To get a successful outcome, new capabilities need to be embedded into the business, with appropriate change management practices applied.
The upshot is, we need Benefits Management. Good Benefits Management tools and techniques will help to optimise benefits and deliver measurable value for the organisation.
Managing Benefits™, suggests the following in order to address some of these problems:
- Forecast benefits need to be complete, realisable and represent value for money. This will help in determining which of those initiatives we should invest in. It’s all about the right initiatives.
- Forecast benefits must be realised in practice. Business and behavioural changes, upon which the benefits are dependent, must take place. Recognise that not all benefits will be realised (as things do change), but emergent benefits should be identified, valued, planned and realised. Consider a “Value Culture” whereby everyone working in the team are always searching for those extra benefits that weren’t originally considered.
- Benefits are realised as early as possible and sustained for as long as possible. Consider your current project or one you are about to start, how can you prove that it will add value to the business, and for projects in flight, how can you prove that the project can still give value for money and that it continues to do so?
I often ask questions to delegates on my courses around investment appraisals and it astounds me that organisations invest millions of dollars in initiatives which never realise benefits or were never set up for achieving those benefits in the first place.
A simple change of mind-set and focus will help towards ensuring benefits are identified, quantified, valued, appraised and (hopefully) realised.
PM-Partners group offer Managing Benefits certification workshops, speak to us today for more information.
1300 70 13 14
Managing Benefits™ is a Trade Mark of the APM Group Ltd