Business Benefits Realisation

Projects and programmes are the vehicles to achieve Business Objectives and Business Outcomes which in turn deliver Business Benefits. A Business Case describes and justifies the reasons for the project or programme, along with the expected business benefits across the organisation. So, when we talk of ‘proposed business benefits’, we can’t do this without considering the wider trade-off between risk and reward. In our latest blog, Dean Isbitt, covers the impact of not realising benefits and how to turn theoretical benefits on paper to real benefits, the outcomes, and why this is so important.

How to recognise business benefits

Each benefit needs to be described in measurable or quantifiable terms. Evaluating these benefits needs to be done in a clear consistent way across the organisation. The responsibility of the delivery of benefits sits with the Executive Sponsor or SRO who owns the business case.

In order to optimise benefit realisation, the programme and project management approach needs to be considered; waterfall vs agile, programme sequencing or outcomes/outputs.

Without the correct level of resourcing with the right skills and capabilities, strong governance, effective management and leadership and funding, the outputs/outcomes and subsequent benefits will be at risk. Focus on costs must not be at the expense of delivering benefits as the cost-saving may result in a negative benefit outcome for the organisation.

For example: You could spend two extra months to save £75k from the cost of procured services that deliver £50k benefits per month. If this results in two months extra project costs of say, £40k per month, this would actually result in a £105k negative return.

Ongoing assessment

As the key driver of any project or programme, the benefits need to be assessed at regular intervals. These should be fixed points at the end of each stage of the project, AKA stage gates. Only if the business case continues to ‘stack up’ should the project/programme proceed.

This does not preclude projects from being revalidated should an event occur, that could impact the business case and expected benefits. This does not have to be a major event, such as a global pandemic, but could be anything that changes a parameter of the ‘risk vs reward’.  

Whilst accountability to deliver benefits sits with the Executive Sponsor or SRO, everyone involved with the project has a responsibility to call out any changes, particularly from their own areas of expertise or their view within the organisation, that could affect the outcomes or outputs of the project/programme. This can come in the form of:

    • Increased or reduced benefits
    • Increased risks of not achieving benefits, or
    • additional opportunities, whether this is as a result of internal or external influences

Where incremental business benefits are realised

This needs to be effectively captured, tracked against forecast and reported. For programmes, the following templates can be used to help set a course to effectively manage benefit realisation:

    • The Benefit Profile. Responsibility of the Business Change Manager, this is used to define each benefit (and dis-benefit) and track its realisation, including;
      • Interdependencies.
      • When the benefit is expected.
      • KPIs in the business operations affected by the benefit.
      • Business process changes needed to realise the benefit.
    • Benefits Management Strategy. Owned by the Programme Manager, this outlines the programme’s benefits and where they will occur in the organisation. This also includes dependencies on areas of change within the organisation, roles and responsibilities for benefit planning and realisation across the organisation and the process for measuring benefits (who, how, when).
    • Benefits Realisation Plan. Again, the responsibility of the Programme Manager that details when each benefit/group of benefits will be realised. This would include reviews in line with appropriate milestones and handover activities to ensure benefits continue to be tracked and realised after the project has closed

And finally…

When projects are completed, there needs to be a formal and effective handover to the Business. This needs to incorporate the ongoing realisation of benefits and reflected appropriately – BAU cost-saving, revenue growth, risk reduction, etc.

As a business, you will need to apply continuous learning. Did you achieve the benefits that were set out in the Business Case? Ask yourself the following:

    • What did you achieve?
    • Was there any deviation from the original benefits assessment and, if so, why?
    • Did you undertake timely analysis and reviews throughout the project/programme lifecycle?
    • What would you have done differently?
    • What do you recommend being done differently for other projects and programmes?
    • Capture and communicate our findings across the delivery community.

So, what do we find in reality?

  1. There can sometimes be a disjoin between the actual and perceived business problem. Business Owners/Sponsors and Programme Managers and Project Managers need to be on the same page.
  2. Benefits can often take a back seat as the PM steams ahead to deliver the project ‘at all costs’.
  3. As a result of 2., Business Case reviews are sometimes not undertaken, or as frequently as needed. This can impact the ability to assess the ongoing viability of a project.
  4. There can be a failure to tailor the delivery approach to optimise benefits, mainly because of the maturity of the organisation.
  5. Mistakes are made repeatedly and benefits are not or partially realised. Even those organisations that consider themselves to have a mature delivery function can fail to share experiences and develop continuous learning.
  6. Benefits need to be understood, aligned to the Business strategy, and owned. There are times that:
    • The strategy changes and the benefits are lost.
    • The Exec/sponsor moves on and no one takes accountability for ongoing benefit realisation.
    • No one holds Exec/sponsors to account.

As the purpose of programmes and project are to achieve the outcomes and benefits they bring, focus on these needs to be a central part of any programme or project process and decision making.

Want to know more and how this can be applied within your business? Get in touch.

About the Author
A Change and Programme Management professional with international experience in business transformation, from strategy definition to implementation and covering all dimensions of change: sourcing, contracts, policy, process, IT, infrastructure, behavioural, organisational. John is a Fellow of the Institute of Consulting, a Change Management Practitioner, and MBA qualified who has delivered change and integration of customer facing, commercial, operational and back office capabilities in various organisations.

Leave a Reply