How to apply benefits management

Harris Vallianatos, Laura Geddes‑Brock and Jamie King discuss the advantages of a benefits‑led delivery culture – and offer advice on how to create one.

When a project or programme is first initiated, it is the desire for beneficial change that is the driving force behind the investment. Too often, however, once underway, organisations maintain a rigid focus on schedule and cost, realising too late that the benefits have been compromised. As project professionals, we may feel comfortable within the confines of time, cost and scope, but can we claim to be successful if an initiative fails to have the desired impact for our stakeholders and customers?

Benefits that speak for themselves

Benefits management seeks to address this for transformational change programmes by introducing a set of practices and processes that ensure benefits are identified, quantified, tracked and optimised throughout their life cycle. As a practice, it has a proven track record. We know that when organisations commit to prescribed processes for reporting benefits realisation, an average of 38 per cent more projects meet or exceed their forecasted return on investment (ROI); and that these practices contribute to implementing an organisation’s strategies successfully. Despite this, many organisations lack capability in this area and senior leaders remain unaware of its potential.

There are other advantages too. A benefits‑led delivery culture results in programmes that are much more closely aligned with strategic priorities and, due to greater attention being paid to measuring benefits, an organisation gains an improved ability to evidence success. To be fully effective, this culture should also embrace identifying dis‑benefits (impacts perceived as negative by stakeholders) as this encourages transparency in decision‑making and prevents overly optimistic assumptions, leading to more accurate forecasting.

Culture as much as practice and process

Benefits management is as much about culture change as creating new practices. It requires project professionals to rethink the basis upon which they manage projects and ensures that decision‑makers listen closely to the views of stakeholders. Without the accompanying culture change, there is a risk that it is seen purely as an add‑on activity and, as a consequence, its full potential value is not realised. These organisational changes usually fall under the remit of a benefits manager, who acts as a facilitator and promoter of change while also helping representatives from the business identify and own the benefits.

While introducing organisational change is rarely straightforward, the good news is that you do not need to be a benefits expert to optimise ROI using benefits management. The following tools and practices will support the efforts of both benefits experts and novices…

1. Set up a benefits management forum

Awareness of why and how benefits management is done is key to its successful introduction, and one method to start the transformation is to set up a benefits management forum. The forum should consist of members from across the project delivery community, not just those with benefits in their job title. The group can be used to create a sense of shared purpose, share knowledge and ask for help, and understand the barriers to adoption.

Agendas should be relevant to the needs of the members; for example, if several programmes are early in the planning phase, a focus on benefits identification tools would be beneficial. Engaging content will be crucial to maintaining interest, so consider inviting external speakers or using interactive content, such as polls, to gather feedback. Finally, try to get senior leadership involvement, but be cautious about using them as chair, as this can sometimes create an environment that is too formal and suppress open discussion of issues.

Another technique for early in the project life cycle is to run a benefits identification workshop. This brings together stakeholders to organically identify benefits, gain consensus of what the project is trying to achieve and what benefits they deem most important.

2. Create a portfolio benefits repository

Creating a portfolio benefits repository can help in understanding the totality of investment within your organisation and the positive impacts you are trying to achieve. Very rarely do organisations have a view of all the benefits that individual projects and programmes have identified. The absence of this information can lead to over‑programming, a lack of strategic alignment and double counting benefits.

A portfolio benefits repository is a database of all the benefits identified by projects and programmes. It is important from the outset to be clear about the scope of the repository – which projects will be included, what data fields are most important and what you will do with the information. Although project documentation is generally the source of the data needed – business cases, benefits maps, benefits realisation plans – the responsibility for keeping it up‑to‑date needs to be clear.

Creating a repository can also help answer questions that have not been asked before, such as:

• What are the most common benefits across our organisation?
• How are we contributing to our organisational objectives?
• What percentage of benefits have been quantified, with realistic targets set?
• How many of our benefits have been achieved?

The repository will also highlight any gaps in the existing benefits management offering. It can provide useful evidence for a mandate to implement further process improvement and strengthen the capability offering for benefits management within your organisation.

3. Use a benefits and measurement dictionary

To help drive consistency and support projects with the challenging task of quantifying benefits, another useful tool is a benefits and measurement dictionary. Typically, there is a lot of enthusiasm for benefits management at the start of a project; however, this tends to subside when it comes to the question of measuring them.

A benefits and measurement dictionary lists a set of common benefits, suggested measures and the data owners. When creating your dictionary, take a top‑down and bottom‑up approach. Look at organisational objectives and think: what benefits would need to be realised to achieve these? Look at business cases and pull out the benefits that have been identified. Share this list with a large group of stakeholders to gain consensus that these are the right benefits.

Work with analysts to help identify the best measures for the agreed list of benefits. They should have lots of data that is routinely collected to demonstrate realisation. Where this isn’t the case, indicate in the dictionary how else these benefits could be measured; for example, using a case study approach. Creating a dictionary helps projects with the difficult task of quantification, but if you work within a portfolio or programme management office and need to aggregate benefits, it also means a standard set of benefits and measures that can easily be collated.

4. Use benefits or logic maps

A key development occurred in November 2020 with the release of the Treasury’s Green Book Review. The review emphasised the importance of a clear understanding of a project’s contribution to strategic goals within a business case. Benefits management can help to strengthen strategic cases by identifying benefits and measurement metrics that directly align to project and organisational objectives. Benefits or logic maps are commonly used as a visual representation of these relationships and can be excellent communication tools, as they demonstrate the links between the drivers behind the desired change, the outputs required to achieve it, the benefits and outcomes that result, and their contribution to strategic objectives.

5. Apply value management

Large programmes often provide an opportunity to do more for stakeholders than a traditional technocratic business case process would bring about. One approach is to apply value management – a complementary discipline that aims to balance the best outcomes with the resources available. For example, the needs of a local community can easily become overshadowed by the larger and nationally more significant benefits of a large project. Running value management workshops to identify ways of measuring the benefits that a diverse set of stakeholders have identified will inform benefits realisation planning and contribute to delivering a project that reaches the best outcome possible for everybody.

When assessing delivery options, there may be occasions when evidence demonstrates that the option providing the highest economic ROI does not necessarily deliver the outcomes that stakeholders need. This is a very difficult message to convey, but you should find that combining benefits management and value management increases transparency about why an option with a lower economic ROI is a more prudent option to pursue.

Making the case for change

Benefits management will not only help to focus minds on optimising the desirable outcomes of projects (and mitigate the undesirable outcomes), but it can also enable a new way of thinking about the consequences of projects, how they affect stakeholders and ultimately how they contribute to delivering better value for money. If your organisation uses a value for money framework, integrating the principles of benefits management into it will ensure that benefits realisation underpins decision‑making.

Consistency also comes from having clear tools, processes and guidance on how to approach benefits management. Of course, every project is unique, and any benefits strategy must be flexible enough to be tailored to suit a project’s needs, although the underlying principles of optimising benefits remains throughout. Flexibility is a key pillar of benefits management, and you should not be afraid of adapting approaches to suit.

Finally, when introducing a benefits management framework to your organisation, it is useful to identify the kinds of impact (both positive and negative) that your projects typically deliver and have the potential to deliver. These common, high‑level benefits, plus the supporting tools, practices and processes, form the backbone of an effective benefits strategy.

 

Harris Vallianatos is project delivery benefits lead, and Laura Geddes‑Brock is head of rail benefits, at the Department for Transport; Jamie King is benefits management lead at National Highways.

Resources

• HM Treasury, Green Book Review 
• APM, ‘What is benefits management and project success?’
• APM Research, Benefits realisation management and its influence on project success and on the execution of business strategies 
• APM, A guide to using a benefits management framework
• APM Community Podcast, ‘Optimising portfolios using benefits and value management’
• APM Community Podcast, ‘Creating successful programmes using benefits’

 

THIS ARTICLE IS BROUGHT TO YOU FROM THE SPRING 2022 ISSUE OF PROJECT JOURNAL, WHICH IS FREE FOR APM MEMBERS.