Why Benefits Matter
When you strip everything back, achieving business benefits is the foundation reason for every project ever undertaken. Without benefits, there is no reason for starting or continuing a project.
When we break down ‘Benefits’ we end up focusing on how we can use the client’s resources more effectively. How can we spend the client’s money so that we deliver the best possible return on investment?
This normally means thinking about the business in a couple of things.
Increasing (or at least, maintaining) profitability.
Reducing (or maintaining) operating costs.
Reducing (or, yep..maintaining) the amount of capital tied up in the business
Providing a low cost, high-value solution to an external problem (for example, a legal or regulatory requirement).
But here’s the catch.
Organisations often start out with a view of their business drivers and needs, yet over time the project outcome doesn’t line up with those needs. The solution often doesn’t deliver what is needed and the business does not get the expected return on investment.
How Project Management Can Help
As Project Managers, we can add real value here.
Our role is to keep the two linked together. To understand the business needs and drivers and tie project outputs to them. We need to tie every project output back to the Business Case, providing a direct link between deliverables and tangible benefits.
With that in mind, when we think about Benefits Management two big hurdles jump out at us:
- Who is responsible for the benefit estimates?
Our challenge is to understand who owns the benefit estimates and also, who is responsible for delivering the business outcomes. Are they the same person or are they two different people? This is where the Project Sponsor has such an important role – he or she is the person who requires the stated benefits to meet a particular need, in pursuit of a strategic goal or objective.
- How do we measure a project’s success when benefits are realised downstream?
When we think about project success, we inevitably think about timing and measurement of business benefits.
Will the benefits be realised during the lifespan of the project, or will additional time be needed post-Project closure? How do we measure project success in those situations?
It’s worth reminding ourselves that our projects do not produce benefits, but rather they produce deliverables that the business can then use to change the way it operates, and improve those cost/efficiency drivers.
Should project success be measured in terms of benefits realised, or on the basis of putting in place the framework from which the business can then drive benefits?
WThis post is a short intro to our next APAC #PMChat on 14th August 2017 (10.00PM US Eastern) / 15th August 2017 (12.00PM Australia (Sydney, Melbourne), where we will be talking about Project Benefits Management – why it matters, why we often get it wrong and what we can do to improve our benefit outcomes.
We’ll open up with two contextual questions, to break the ice and set the scene.
Q1. When defining successful Project/Programme delivery, do you include Benefits as a measure of success? #PMChat
Q2. As a PM, how do you help shape a successful Benefits Management outcome? How do you add value? #PMChat
We’ll then talk about benefits ownership – who defines benefits, who is responsible for owning them, and should these be the same people/person?
Q3. In your experience, who is responsible for defining Project benefits? #PMChat
Q4. Business Cases. In your organisation, does anyone read them? Do they live & breathe, or are they “set and forget”? #PMChat
Q5. Benefits Ownership. Should the person who owns the Business Case outcome also define the Project Benefits? #PMChat
Finally, we will think about the broader picture – how we can improve our benefits management practice.
Q6. Benefits are often realised later after the Project has closed. How does this shape your PM approach to Benefits Management? #PMChat
Q7. What do you see as the most urgent area we need to focus on to improve the way we manage Project Benefits? #PMChat
Here’s What Happened Next
We had a terrific chat, with some great ideas thrown around. Please check out the Storify story.