A practitioner’s guide to benefits management

This article, by Neil White and Rebecca Casey, sets the scene for successful change outcomes enabled through the effective application of benefits management. Aimed at the project and programme level, it describes many activities and capabilities that can be used in support of portfolio management goals.

What is benefits management?

A benefit is defined as the measurable improvement from an outcome perceived as an advantage by one or more stakeholders (Managing Successful Programmes). Benefits management is a discipline that proactively ensures the expected benefits of change are understood and realised throughout the full life cycle of an investment (Thorp, 1998, 2003).

Identifying business benefits also involves: identifying the changes required to realise the benefits; identifying measurement for both the progress of the changes taking place and the benefits being realised (which may not always be directly quantifiable in cash terms); and assigning clear accountability for both the delivery of the changes and the realisation of the benefits.

Why do we need to adopt benefits management?

Benefits don’t just happen, and rarely happen according to plan – they need to be actively managed (Thorp, 1998, 2003). In today’s world, change is increasingly the only constant. Organisations, both public and private, that fail to embrace and effectively manage change (such that they realise the expected benefits) will fall behind their competitors, and will fail to meet their customers’ expectations and deliver the performance that shareholders, ministers and taxpayers demand. A clear and well-conceived strategy for an organisation is nothing without an effective and efficient means of delivering benefits from change through projects, programmes and, for some larger organisations, portfolios. A continuous and rigorous focus on benefits and its relationship with change management should be at the heart of effective portfolio, programme and project management.

Research reveals that organisations that have processes and practices closely aligned with benefits management processes are more successful than others (Ward and Daniel, 2012). The Project Management Institute, in a recent Pulse of the Profession article, concluded that organisations that align benefits to organisational goals waste less money.[1] Nevertheless, there is still limited understanding of the nature of benefits that can be realised, what needs to be done to deliver them, and the key roles and responsibilities.

Benefits management and collaboration

Benefits management is one of several management disciplines that must work collaboratively together to help the organisation achieve its strategic objectives through change projects, as well as keeping performance high in the day-to-day business. In support of this need, ISO 44001:2017 specifies requirements for the effective identification, development and management of collaborative business relationships within or between organisations. These include, but are not limited to: strategy; portfolio, programme and project management; performance management; accounting; HR; and change and contract management.

Building capability

Given the significant sums of money involved in transformation programmes and the continuing poor performance of many projects, it is not difficult to understand why interest in benefits management is increasing in both the public and private sectors. For example, the NHS now mandates benefits management in support of change to IT infrastructure; the Department for Transport uses it on all infrastructure projects; and HM Treasury expects to see benefits properly accounted for in all business cases. Use of the project, programme and portfolio management maturity assessment is growing as organisations attempt to understand the gap between their existing levels of maturity in benefits management and other project/portfolio management-related disciplines and where they need to be.

It is clear that developing an organisational capability in benefits management, both in terms of processes and skills, is crucial if organisations are going to achieve optimal performance of their change portfolios and competitive advantage. For some, this might mean starting small – getting it right on one project or programme and building from there. For others, it might require a top-down holistic approach – getting the board involved in more transformational capability enhancement programmes. It really depends on the size of the issue and the urgency in fixing it, and this is for the board or sponsor to decide.

Key roles and responsibilities

The executive sponsor (or senior responsible owner) of the business case is ultimately accountable for the realisation of the benefits. Such is the importance of this role that the Infrastructure and Projects Authority has included a role description in its newly published Project Delivery Capability Framework.

However, the responsibility for the implementation of the business changes required to realise those benefits lies with the relevant business change managers or ‘benefit owners’. The relationship between the project or programme manager and the business change manager(s) is crucial. The delivery of project outputs and the management of business changes must be closely coordinated.

Five top tips for successful benefits management

Stakeholders affected by the change should feel connected with the project and, where possible, be engaged in two-way communication with the team.
Ensure that measures used for benefits progress are, where possible, already used for measuring day-to-day performance of the business.
Build your benefits map right to left. Start with the problem you are trying to solve (or objective you are trying to achieve). Then ask what benefits would be realised if the problem was solved or objective achieved. Then ask what work would be required to bring about those benefits.
Use a dual dimension approach, whereby benefits are classified first by type, eg financial, cashable, and then by category, eg quality, efficiency, innovation.
Establish a benefits management forum within the organisation or with partner organisations. Meeting delivery and change management colleagues on a regular basis to discuss ideas and disseminate lessons learned really helps individuals to learn and grow.

The benefits management life cycle

Benefits realisation is the only reason for investment in change. As part of this practitioner’s guide, we have created a diagram that provides a framework that organisations can adopt to optimise the realisation of business value from their investment in change.

The diagram is available to view and download for future reference on the benefits management lifecycle web page.

This article was originally published in the autumn 2017 Project journal. Neil White is chair of the APM Benefits Management Specific Interest Group. Rebecca Casey is a lecturer in information systems management at Newcastle University Business School