Benefits Management

Benefits Management

1 Introduction

‘The fundamental reason for beginning a programme is to realise benefits through change‘
(Office for Government Commerce)

The aim of this section is to demonstrate the value that be can realised as a result of taking a benefits approach to manage a portfolio of research projects.

This document has not been designed to be read sequentially one page at a time. The reader should treat this document as a general resource dipping into the sections they find of interest.

2 Background to Benefits Management

2.1 Overview in One Page

2.1.1 What is Benefits Management?

Benefits management is an integral part of the Office of Government and Commerce (OGC) Managing Successful Programmes (MSP) and PRINCE2 methodology. It represents an approach for managing multiple projects within an established framework focused on delivering results that directly impact on the end user.

2.1.2 What is a benefit?

A benefit is formally defined as:

‘A quantifiable and measurable improvement resulting from an outcome which is perceived as positive by a stakeholder.‘

2.1.3 Why is it relevant?

The fundamental reason for conducting any research project is to deliver a benefit to someone, somewhere. If this is the case, then does it not make sense for our management process to reflect this?

All too often projects focus exclusively on delivering outputs on time, within budget and to an acceptable quality. However, project outputs are not benefits in their own right, nor do they necessarily deliver benefits. Benefits management offers an established approach to assists our understanding of what needs to be done to exploit project outputs and realise these benefits.

2.1.4 What can it offer an organisations?

Project outputs will in nearly all cases feed into something bigger than their own. For true exploitation we may rely on deliverables from other projects both inside and outside of our sphere of influence. If we are not aware of the dependencies on other projects then exploitation is inevitably going to suffer. By taking an approach that focuses on understanding how projects link to deliver benefits, one can ensure that the full potential of our projects are realised.

2.2 Why should we bother?

‘Exploitation is the means in which a project delivers its benefits. If we wish to improve exploitation then we must manage the way in which these benefits are realised‘

The benefits management approach is designed to:

  • Ensure that projects consider how their outputs feed into the high level objectives of an organisation.
  • Help a project manager articulate where the value is in their work.
  • Highlight external factors which will impact on the likelihood of exploitation of project outputs.
  • Give a strong input into managerial decisions to assist with prioritisation of work-packages, resources and objectives.

The overall goal of benefits management is to provide clear and concise information to managers allowing them to better manage their projects and ensure their work is exploited.

The Benefits of Benefits Management A structured approach to benefits management can help to:

  • Build a robust business case
  • Maintain focus on final outcomes
  • Improve stakeholder awareness of, and engagement with, the programme/project
  • Improve communications by providing evidence based rationale
  • Identify, manage and mitigate the risks associated with exploitation
  • Focus attention on the most important benefits
  • Provide a robust basis for Post Project Review (PPR)

The following extract is taken from an article published by consultancy firm Methods Consulting. It presents a strong argument for an organisation taking a benefits approach to programme management.

2.3 Methods Consulting Article

Programme management through benefits management
In this article Andy Taylor, a long-term Methods Consulting associate, looks at programme management, stripping away the fluff and getting to the core of why programmes exist – to deliver benefits – and suggests that with this in mind, benefits management should be the real focus of programme management.

‘Benefit‘ - an interesting word. If I suggest that you will receive something of benefit to you there is every expectation on your part that you will be better off as a result. It conveys a vague idea of better, good, improved and yet in some European languages there is no direct translation. So when it became necessary to translate the OGC’s guidance on Programme Management – Managing Successful Programmes (MSP) – into Dutch it caused a bit of a problem.

The end decision taken was not to translate it at all but to leave it in English, which meant that when the training companies came to the word they had to discuss it and agree what it meant as a collection of concepts, ideas and rough translations.

So what’s the connection? To those who were given the task of translating the MSP manual and supporting materials into Dutch, the concept of ‘benefit‘ was so fundamental to the method that they felt it was essential not to allow it to get lost in translation. They could have used words like advantage, gain, improvement and so on but none quite fits the bill. Thus leaving it in English and therefore requiring there to be some discussion about it was entirely sensible.

Not understanding how central benefits are to the success or otherwise of a programme is to miss the point of programme management entirely. If you don’t deliver the benefits from a programme then there is little real point in doing the work in the programme at all.

Let me take a moment to define ‘programme‘. The term has been used in a number of different contexts in recent years but is now coming to be accepted as meaning a set of projects and related non-project activities that together deliver one or more business outcomes and take the organisation in the strategic direction set by the board. It has also been accepted, for those of us brought up on managing projects using PRINCE2™ at least, that projects themselves often don’t deliver benefits.

The projects deliver the wherewithal to deliver the benefits, usually after the project itself has closed, but they are rarely required to see the real return on investment accrue during the lifetime of the project. Now there will be those who suggest otherwise, that their project did deliver the benefits as well as delivering on time and to cost and quality but that is, in my view, very much the exception. It is, therefore, the primary role of the programme organisation sitting above the projects to deliver the benefits during the lifespan of the programme and to ensure that the organisation continues to accrue benefits even after the programme has closed.

So if it is a primary purpose of programme management to deliver the benefits, why is it not done as a set of specific actions? Read many of the standard texts on programme management including for example the latest PMI offering and it gets a mention but it is not a clear set of processes or guiding principles…more a few thoughts that say it must be done without wanting to elaborate.

So what should be done? In order to deliver benefits one has to manage them actively from beginning to end. They must not be left as an after-thought assuming that they will accrue at some point. Rarely, if ever, does that happen. To start with there must be someone whose job it is to deliver the benefits through active management. In MSP this role is the Business Change Manager (BCM). He/she has a crucial role to play and is arguably the most important person in any programme management team. The BCM must come from the business and must be senior enough to make things happen. MSP suggests they may be the next departmental head or similar. They must have a thorough a understanding of how the business (in the area in which they are working) operates and must have bought in to the changes being brought about by the programme. It is a very demanding job with exemplary people skills being high on the list of ‘must haves‘.

But what do they do? They manage the benefits and ensure they are delivered effectively in a timely and cost efficient manner. Saying that is easy but how exactly do they do it? To begin we need to be clear what the potential benefits are and therefore we need to identify them. We do that by looking first at the outcomes expected from the programme: an efficient organisation; a world class leader in the specific industry; a gain in market share greater than the competition’s for example. From these we need to identify what that really means in measurable terms. Benefits, to be realisable, must be measurable and they are the measure of the outcome. We will know if we have an efficient organisation, for example, if the measures defined in the benefits show it to be the case.

We must then ensure we are absolutely clear about who will deliver and where. It is not unusual for benefits to be realised in a part of the operational environment that is different from that where the programme is happening. And those with the responsibility of delivering must also agree to deliver! Assuming they will make changes to their business processes, sack people or otherwise undertake significant changes in their part of the business without agreement and probably without negotiation is unreasonable. Hence the importance of BCMs. It will also entail taking a baseline of current business so that the improvements promised in the benefit profile can be properly measured and acknowledged.

Writing a benefit profile for each benefit helps to ensure there is no misunderstanding and confusion. It also allows people to negotiate before the event not after the delivery has failed! The profile must include all the information mentioned to date and should be signed by those with duties to realise it – the delivery agent and the owner from the business side.

Then, as the deliverables start to appear from the projects, the BCM should ensure the operational side of the business is ready to receive them having appropriately planned the transition. They may well want to re-time events to avoid bad times for the business – it was never a good idea to install new accounting software in March/April for example!

Then we simply sit back and await the arrival of the expected benefits! Well, if we are very lucky. More usually we have to work hard to ensure delivery by removing old ways of working, ensuring appropriate training and support is provided. Measuring appropriately and accurately (as accurately as necessary) is also critical as is watching for double counting – one programme claiming a benefit already included within another programme’s work.

I am sure much of this is pretty straightforward and you will be saying “.so what?” My suggestion is that whilst we all know this is true, few of us actually practice what we think. Rarely is the role of benefit management seen in a programme office or given precedence over programme planning and so on. Why this is, when it is the very reason for the programme’s existence, I don’t know. But perhaps with more exposure and coverage, benefits management will eventually get the recognition it rightfully deserves.

3 Benefits and the Business Case

‘To truly justify the need for a project one must clearly explain how it aligns with the strategic objectives of an organisation and the value it will add. If this can not be sufficiently articulated, the project should not be funded‘

A Business Case provides the formal justification for the existence of any programme or project. It details the objectives, costs and benefits and ensures they are correctly aligned with the overall strategy or programme direction. Any good business case must make reference to the benefits that the project will deliver. They may not be explicitly stated using OGC language but they will certainly be alluded to. Identification of the benefits and the process in which they will be realised should be central to any business case.

A Benefits Business Case

  • Assess/estimate the benefits that the programme/project should deliver to answer the question – is the project/programme worth doing?
  • Document the process for identifying, monitoring and realising the benefits
  • Ensure plans/processes are in place to achieve the benefits
  • Define the baseline benefits position to allow comparison with projected benefits
  • Define the boundaries with other programmes/projects to ensure benefits are not ‘double counted’.

The following shows an extract from a slide pack prepared by Stephen Jenner, a senior member of the Cabinet Office and author of the book ‘Realising Benefits from Government ICT Investment’. He discusses how the benefits approach can be used to create a robust business case.

4 The Benefit Management Process

‘If the fundamental reason for performing a project is to deliver a benefit to someone, somewhere, then does it not makes sense for the management to reflect this.‘

The Office for Government Commerce describe a generic process for benefits management. This process is detailed within this section incorporating adaptations to increase its relevance to the PTG.

The benefits management process can be broken down into four distinct stages:
Benefits managment process.jpg

The presentation below gives an overview of how this process works:

5 Benefits Management Resources

Resource Name Description Resource Type
Benefits Management This is the main page from this site,

This concept looks to take a portfolio of projects and monitor the overall benefits they deliver as discrete items themselves. Ultimately a programme exists to deliver some kind of benefit but these benefits normally sit within multiple projects. This concept provides guidance on how to monitor the benefits and manage the programme to ensure they are effectively delivered. || M2i wiki page