Benefits Management to Start and End a Project
Project Starts with Benefits Planning Ends with Benefits Realisation
Dec 31, 2008
Realising benefits may seem an obvious goal for a project but many projects simply start with what seems a good idea, which may or may not have any identified benefits. A successful project is then judged based on the project parameters of cost, time and scope. Given the project failure rate it is clear that most projects neither meet original objectives nor deliver the expected benefits.
What is Benefits Management?
In Benefit Management - A Paper for Congress 2000 G.A Reiss summarised "Benefits are the reasons behind the initiation and execution of projects" and that "Benefits Management is concerned with the beginning and end of project management and surrounds each project." Similarly, in Managing Business Benefits: Key Principles the UK Office of Government Commerce states "Benefits Management is therefore a process that starts prior to project initiation and continues until the planned benefits are delivered to the organisation and/or its stakeholders. In this context project management becomes a key success factor within a formal end-to-end process of benefits management."
Benefits Management Approach - Planning and Delivery
The generic approach to benefits management is a cycle of:
- Identify tangible [quantitative] and intangible [qualitative] benefits
- Optimising the benefits to be achieved by one or more projects and captured within a benefits plan and the project scope
- Managing and delivering the benefits via a project
- Reviewing and maximising benefits
Benefits Planning - Identify Benefits and Ownership
Identifying potential benefits is the key to starting benefits planning and they fall into two main categories:
- Quantitative benefits such as improved cycle time to improve throughput, elimination of unnecessary tasks and reduced level of resources to achieve same outputs
- Qualitative benefits such as improved risk management, increased compliance, increased access to information and improved staff morale [Sometimes, qualitative benefits may be quantified based on various assumptions.]
Identified benefits must have an owner - the person or people who typically will receive the benefits. The benefit owner must be committed to ownership, obtaining the benefits and using measures to know they have been achieved.
Optimising - Cost Benefits Analysis - Prioritisation and a Benefits Plan
The identified benefits are built into action plans, identifying tasks, resources and schedule. Having done this work it effectively allows the costs of achieving the benefits to be known and so leads into a considered cost benefit analysis. Since the costs are known to achieve specific benefits and [hopefully] the benefits are quantified the cost benefit analysis become a simple matter of comparing cost to benefit. This cost benefit analysis is also a straightforward way to do the prioritisation of benefits and consequently to a benefits plan.
Benefits Management
Managing business benefits is about executing the benefits plan - or project - to achieve the specified benefits. The project management of benefits is the same as any other project: executing the plan, managing the change and risks and achieving the objectives or benefits realisation.
Benefits Realisation
Benefits realisation is critical to success and similar to a project review, the benefits achieved from the benefits plan should be reviewed based on results and process and include:
- Success, degree of success or failure in getting expected benefits
- Cost benefit analysis
- Execution of benefits plan and the process
The benefits review is about learning and using that to maximise benefits, perhaps identify new benefits and to improve the benefits planning and benefit management processes.
Benefits Management and Project Management are Complementary
Project management methodologies should be complemented with benefits management so that a project starts with benefits planning and ends with benefit realisation. This will help to more clearly define the purpose and scope of a project and prioritise competing projects based on their expected benefits.
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