Benefits Realisation

Benefits Identification, Planning & Management

What is it?

It is the identification of target benefits, their definition, planning, structuring and actual realisation as a result of investing in business change.

Why is it necessary?

Business projects and programmes are undertaken to deliver benefits. However, they are frequently criticised for failing to achieve their objectives or benefits. Studies show that well over 60% of projects fail to deliver their expected benefits, and even when they are achieved in part, often they are far from fully realised.

The reasons for this are varied, but a significant element can be directly related to, for example:

• Business cases focused on target savings instead of expressing actual business benefits in a manner that can be commonly understood and implemented
• Too much emphasis on deliverables, or outcomes, which often on their own do not provide any specific benefits - too little or none on benefits
• No mechanisms or structures to manage the realisation of benefits

For benefits realisation to work it is very important to identify clear benefits that relate to unambiguous business objectives, and to assign ownership to those responsible for ensuring and managing their achievement.

Furthermore, projects are often considered to be finished when their deliverables are complete. However, the benefits of a project are typically realised over time - this may leave no one responsible during the realisation phase and often no structure through which to manage this important element.

The challenge for organisations is in identifying clear benefits, assigning ownership, determining how they can be measured and then making sure they are delivered. Benefits Planning, Management and Realisation sets out to bring structure, accountability and discipline to the delivery of the benefits inherent in business projects. It is therefore a key aspect of effective programme management and relates to other key business processes, such as portfolio management.

It must start in the early stages of the business case. While investment appraisal provides the justification for the proposition in the business case, effective realisation planning enables organisations to understand and maximise the achievement of the benefits. Most importantly, it must also address the changes that may be required, in particular to manage any resistance that may well be encountered. These changes need to be managed carefully themselves and may also require experienced change management skills.

What is key to improving it?

What are the things that typically have to improve most?

• the way objectives and benefits are expressed and structured in business cases
• differentiating between objectives, outcomes, benefits and their end financial (or other) results (this is fundamental to its success)
• the whole planning and management of this activity or process

The Benefits Realisation Framework

To be successful, it must be driven by the organisation's strategic planning and portfolio management processes. To be effective, it needs to become a standard management practice throughout the business change lifecycle - especially during programme and project definition.

The first step is to establish a framework that defines how benefits should be identified, structured, planned and realised. The framework should classify types of benefits of value to your business, and reference the organisation's current strategic goals and objectives, for example:

• service / process / quality/ productivity / efficiency improvements
• cost avoidance
• staff morale / motivation
• revenue generation / increased sales

The potential benefits identified must not simply exist as a list. It is important to identify dependencies to determine where the achievement of one benefit is dependent on the realisation of another.

Once they have been identified, thoroughly analysed and structured, the next task is to create a benefits realisation plan. This should also enable the organisation to identify the management actions required to support and execute that plan.

Benefits Focused Business Cases

A business case should set out the basis of an investment or change. Business cases must demonstrate the return or value that the owning organisation will achieve by the proposition in the business case. Business cases must demonstrate how the value or return will be delivered, by identifying specific benefits that will be accrued via making the investment / change. This is often very different from making summary statements about planned or targeted financial savings that will be achieved. Many business cases in the past went no further then identifying outcomes of potential value to stakeholders (such as capabilities), with little or no identification of planned specific benefits (changes). It should be of little surprise that in many of those examples, limited real value was delivered.

Any business case should not necessarily require volumes of text, but the core should be summarised succinctly against the following structure:

• goal, objectives, (and per option:) outcomes and target benefits, risks, assumptions

Delivering Strategic Goals and Objectives

Most organisations have current strategic goals and objectives. These should be articulated and be very evident during benefits identification. The business case needs to be evaluated thoroughly to ensure that it is focused on and maximises delivery or achievement of strategic goals. Following this, the realisation plan(s) will provide a control mechanism to provide continual feedback against strategic goals.

Maintaining a Benefits Driven Focus

During the life of a project it may be necessary to modify the objectives, change priorities or redefine the desired outcomes in the light of changing circumstances. It is important that benefits planning continues throughout the life of the project and beyond, to ensure that the benefits of most value are realised at affordable cost and on schedule.

Ownership and Implementation of the Benefits Realisation Plan

Many of the anticipated benefits will not start to materialise until after the project has been delivered. It is therefore essential that the ownership of the benefits realisation plan is maintained beyond project delivery through to complete realisation. The process should also include a post implementation review, thereby allowing time for analysis and a proper evaluation against the original business case.

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