Project Management Institute

Delivering project benefits--a practical plan for success

Abstract

This paper describes a model for building “benefits focus” into all phases of a project and onto the operations management of the output that it delivers (the paper assumes that a project has a discreet output that will be put to use once the project is completed). It also discusses how to identify whether attention is not being paid to the delivery of benefits, and if not, what to do about it. The author recognizes that various academic models for achieving project benefits exist; the model presented in this paper is based on personal experience and examples of live practice.

In today's competitive landscape, it is more important than ever for the anticipated benefits of a project to be made worthwhile and to be realized and sustained over the long-term once the project output goes into use. Project teams must be careful not to lose sight of the original core need and resultant benefits that their project is intended to deliver upon its completion. These benefits must be given particular focus if the project is of lengthy duration and is large in size and scope. Adopting a simple approach to tie benefits focus into key project activities can help you ensure that your project is viewed by everyone as “worth the effort.”

The framework described in this paper is based on seven points for determining, planning, and delivering a project's intended benefits:

  1. Identify the “core need”
  2. Distill the need clearly
  3. Elicit “benefits tracking” during project planning
  4. Monitor progress during project delivery/execution
  5. Check benefits focus during project reviews
  6. Review the benefits plan at project close
  7. Deliver benefits during operation

A glossary of terms is provided at the end of the paper.

Introduction

What defines a successful project? Regardless of whether it was difficult or easy to plan and deliver, the success of a project is ultimately measured by the benefits it delivers (planned and/or unplanned) when its output is in use.

How can you ensure that everyone involved in a project—from initiation through planning, execution, closure, and ongoing operations—is focused on achieving the benefits it has been created to provide? Regardless of the nature of your project—whether it is a new airplane, a new consumer product, a building refurbishment, a business process change, a new customer service stream, or the implementation of regulatory compliance measures—the key to ensuring that benefits are always driving key project decisions lies in threading actions into the project process to check and ensure that the team is focused on benefits delivery, not just completing their project on time and within budget. If this is not happening, you need to (1) find out about it and (2) resolve it.

The following seven-point model (Exhibit 1) is put forward as a way to drive focus on the core need and benefit(s) of your project:

  1. Initiation: identify and be clear about the “core need” and the reason for the project's existence
  2. Initiation: distill what is required to turn the anticipated benefits into reality, create a succinct message, and focus on these benefits in the business case
  3. Planning: instill “benefits tracks” through benefits mapping to your organizational strategy, create an implementation plan alongside the project management plan, and ensure that project governance controls focus appropriately on achieving the end-goal benefits
  4. Delivery/execution: monitor progress against your project management plan and project implementation plan
  5. Ensure that benefits focus is woven into project reviews
  6. Close (i.e., project Go Live): assess the benefits map and stated benefits against the implementation plan
  7. Operations: monitor progress against targets and ensure that benefits are delivered

If your project is not paying appropriate attention to benefits delivery at any point in the project life cycle, the project governance group (see section 3.1) should instigate an appropriate corrective course of action.

A seven-point plan to deliver benefits

Exhibit 1: A seven-point plan to deliver benefits.

Initiation: Identify the Core Need

The needs (or opportunities) of individuals, organizations (including not-for-profit organizations), governments, or any other entity that decides to undertake a project arise for many reasons.

There will always be a primary reason—which we shall refer to from here on as the “core need”—that is the most important driver for implementing the project. The core need (and all other needs and reasons) will fit into one of four categories: 1

  1. To generate revenue/profit
  2. To save costs
  3. To contribute to a strategic objective and/or a defined priority (e.g., a foundation platform for improvement)
  4. To satisfy requirements (e.g., regulatory compliance)

It is vital that the project team maintain clear sight of the core need and reason for their project, and how it impacts other needs and anticipated benefits, from project Initiation through to the detail of the Planning and Execution phases and project Closure. Ensure that this is discussed and understood in your kick-off meeting. From the identification of the core need, you need to take action to ensure that it drives and shapes the project's direction.

As an example of undertaking a project primarily to achieve revenue/profit growth, consider the scenario of an international mobile telephone provider identifying an opportunity to enter a new geographic market in which market analysis indicates a potential market capture of X% leading to $Y profit in year 1 and $Z profit in year 2. It is agreed that the core need is to be generating revenue and profit over an intended period of time. A secondary outcome may be the contribution to a strategic objective of geographic expansion. The core need of revenue and profit generation must permeate into the project plans and subsequent roll-out and decisions about the organization's implementation strategy, and it must be the chief denominator for key project decisions.

As an example of undertaking a project to satisfy requirements, consider the scenario of a retailer that owns multiple outlets that needs to modify its facilities in order to comply with new legislation. The core need of this project is to undertake it “to satisfy requirements.” Spin-off opportunities may allow the organization to contribute to a strategic objective (e.g., to undertake other refurbishment improvements that will aid customer service), but such spin-off benefits should not detract from completing the works in the timeframe required by the local authorities or from ensuring that the core need is satisfied.

As an example of undertaking a project to contribute to a strategic objective, consider a strategic initiative to increase customer satisfaction. An important resultant benefit may be the improvement of revenue and margins, but the core project need is to initiate an “enabling project” to contribute to a strategic objective. This may lead to project decisions that take a longer-term view of company positioning in the marketplace, and hence certain immediate opportunities may be foregone in order to ensure that the long-term strategy is implemented.

Suggested Activities for Benefits Realization Key Embedment Points

Exhibit 2: Suggested Activities for Benefits Realization Key Embedment Points

Initiation: Distill the Need Clearly

The action of “distilling the core need” is an important step. Done well, your ongoing communications will keep people focused on the core reason for the undertaking. Distilling the need allows you to communicate it in a simple way that is concrete in substance and easy for your audience to remember. It is also a mechanism to clearly define your Brief and to set the priorities accordingly (perhaps in a project Charter).

Why is it important to do this? The reason is that in today's busy world people need messages that “stick.” People who are close to a project “know the detail,” and can fall into the trap of turning what they think are succinct messages into generic “nothingness” in the effort to keep them simple. Make sure at all times that you keep your message focused on the core benefit, and make it snappy and genuine. Create “Use Cases.” Use short stories or examples of why you need to act, and what the effect of the end result will be.

For example, if you are a customer service company embarking on a strategic initiative to increase your customer retention rate, tell a story about a customer service representative who went above and beyond the expectations to satisfy a customer's expectations, and the knock-on positive effects it had for the customer.

By taking this approach, your message will stick much better than by using generic statements such as “we want to maximize customer retention” or “maximize efficiencies in delivery.”

What Does Your Business Case Say About Benefits…?

In the project management community, it is generally accepted that a project starts in earnest once a business case has been agreed upon and appropriate Initiation tasks are conducted.

The business case is your “guardian of benefits.” The level of rigor and detail applied to the business case will depend on the nature of the project. Whether its content is focused on detailed financial metrics or “enabling metrics,” or both, depends on the core need (i.e., which one of the four core reasons the project is seeking to address). All stated benefits need to be realistic and relevant.

The business case should show a “line of sight” to the core need and it should be reviewed periodically to check that the team is not deviating from the core need in the heat of the action (which is a risk to guard against in the Planning and Execution phases of a project).

Business cases vary in size and complexity. It is advisable for a business case to include the following elements relating to intended benefits, particularly once you have distilled the core need into a simple message:

•    Succinctly describe how the initiative will contribute to the organization strategy

•    State measurable benefits that specifically relate to the organization's core need

•    People must be named as accountable for ensuring that the stated benefits are achieved

•    It must be clear that a benefits realization plan will be monitored once the project is complete

The governance group for the project (see section 3.1) will need to ensure the business case remains a valid reference guide throughout the project's life cycle, and that it is updated if circumstances require.

Planning: Instill “Benefits Tracks” Into the Project

Once the core need for a project has been agreed upon, its core benefit has been distilled into a simple, concrete message that all stakeholders can relate to, and an agreed-upon business case is in place, measures need to be instigated to ensure that the project team maintains clear sight of the “reason for their work.” Benefits strategy mapping, project governance, and project reviews should be set up during the planning phase to ensure that the focus on benefits is maintained during delivery/execution.

Benefits strategy mapping is a mechanism to describe how the project's benefits will satisfy key goals of the entity that is implementing the project. It can be used to describe real-life scenarios of how people will use the outputs of your project, and thus obtain the benefits, thereby helping to substantiate the “concrete messages” that were crystallized in the Initiation phase. This method of active planning can be used to guide the actions of the project team, and should be revisited throughout the project to check that the actions are still relevant. Done well, it can:

  • Help turn the project brief into a good scope
  • Help to define expectations on project quality
  • Define areas of focus for organizational change management (which is usually a critical component to project success)
  • Allow those who are accountable for achieving benefits to work out how they will be achieved
  • Be a useful feed into sensitivity analysis (which, if undertaken, is a tool to help demonstrate how big a factor uncertainty of achieving certain goals plays in achieving an overall end target or goal—i.e., the sensitivity of the planned benefits against various influences that may affect the end result.

Exhibit 3 (reproduced with permission from the UK Government Cabinet Office-led Service Transformation programme 2) describes a benefits strategy map to which individual project and program benefits are linked:

Service transformation programme: high-level strategy map. Note. From S. Jenner, of the UK government Cabinet Office-led Service Transformation programme (2009). Copyright 2009 by XXX. Reprinted with permission

Exhibit 3: Service transformation programme: high-level strategy map.
Note. From S. Jenner, of the UK government Cabinet Office-led Service Transformation programme (2009).
Copyright 2009 by XXX. Reprinted with permission.

In addition to mapping the benefits you should build benefits traceability into your project management plan. Ensuring that appropriate and valid attention is given to benefits through consideration of design, schedule, budget, change control, and other elements of the project management plan will keep you on track to deliver what your customer needs and should be a key element to managing quality.

A project implementation plan (which is a plan to describe how to embed the project's outputs once they become available for use) can also be derived from the benefits strategy map. The project implementation plan should include a benefits realization plan template for tracking the benefits once the project finishes (refer to section 7).

Use Project Governance To Maintain the Focus on Benefits Achievement

It is generally accepted in the project management community that the establishment of project governance, with senior stakeholders having a project oversight role, is good practice. It is important that the governance group focuses on benefits realization, and to do this they can be given prompts to ask specific questions during the project to ensure that the team is focused on the right actions.

A governance group can ask questions such as the following at appropriate stages of the project:

1.    How do the benefits of this project map back to our organization strategy? Where is it referenced the business plan? Is it defined in the project implementation plan?

2.    How does the core need for undertaking this project (one of the four categories) correlate with the organization's business plan?

3.    Do the accountable people have the benefits assigned to them in their personal performance objectives? If not, how will they be held accountable?

4.    Are key project decisions being driven by the key planned/intended benefits?

5.    What are the risks to achieving the intended benefits? Has a sensitivity analysis been conducted, and if so what are the findings and recommended actions?

In the event that benefits focus for a project is deemed inadequate, the governance group should insist that actions are taken so that team priorities can be adjusted accordingly.

Delivery/Execution: Monitoring the “Benefits Tracks” During the Project

The project delivery/execution phase may be the time when the project is most at risk from deviating from the intended “core need” and intended benefits, due to time/cost/quality pressures during implementation. The risk is exacerbated if the project is of a long duration and/or subject to many external influences.

The execution-focused project management plan should link with the operations-focused project implementation plan, the actions of which should map to the business case benefits and any strategy mapping undertaken.

The project team will inevitably be “heads down” during the delivery/execution phase in order to get the job done. The project leader should make sure that “end goal reviews” are held at frequent enough intervals to ensure that everyone working on the project is given timely reminders about the intended impact of the project, including referencing the “distilled messages” created in the initiation phase and the benefits strategy map.

Project deliverables may need to be adjusted before a project is completed, or at several points in time after project closure (i.e., “go live”). For example, if organizational circumstances change, unexpected external impacts occur, or new opportunities result in a change of organizational strategy, a change of direction away from the original need may be required. Such changes need to be fed into the benefits realization plan and approved by the governance group.

The following questions can be asked by the project governance group at key delivery/execution milestones to help keep the project focused on realizing benefits:

  1. Why are we still pursuing this project?
  2. When was the business case last reviewed?
  3. Can you show how the project team cares about the benefits being delivered after they have completed the project?
  4. Budget – is it sufficient to finish the project and to achieve the benefits?
  5. Change requests – do they map to realizing the core need? Show me…
  6. Scope – are we managing to the agreed level of quality, and is it still relevant to current and future organizational priorities?
  7. Will the organization be ready to implement the benefits of this initiative when you finish the project? How?

If answers to such questions show that inadequate attention is being paid to the end benefits and the core need, an action plan should be drawn up to address the issues, with specific actions agreed upon, and subsequently implemented.

Tracking Benefits During Project Reviews

It is generally accepted as good practice that holding project reviews at agreed-upon intervals can add value. The need for them, per an agreed-upon frequency, should be established during the planning phase.

Project reviews can be conducted for various reasons (governance is not the sole reason). They may or may not involve the governance group. For example, a peer review may be held at the start with a team that has previous experience in the specific nature of the project to share lessons and knowledge with the project team, or a project management office may carry out a status review “mid-flight” through the project.

All project reviews should have “benefits check-points” in their agendas. The following example questions can help to ensure that a review (whatever its principle objective) asks suitable questions about the project's intended benefits:

  1. What are the risks to achieving the benefits?
  2. Does a benefits realization plan exist yet?
  3. How far progressed is the operational implementation plan (and change management considerations therein)?
  4. Is the project team remaining focused on the original reasons and benefits for the project? Has anything caused a change to the benefits that will be realized?
  5. Do minutes of the governance group meeting(s) show evidence of a review of intended benefits?

Close (i.e., “Go Live”): Assessing the “Benefits Map” and the Core Need at Project Completion

At project close (or, “go live”) the project team and the governance group should verify the following:

  1. Is the original core need still valid, or has it changed (and if so, why, and is the project still valid)?
  2. Did the key intended benefits always drive project decisions?
  3. Has the project output deviated from the original core need or expected level of quality? If so, why?
  4. What does the benefits realization plan “look like” and how often will it be reviewed? Has any sensitivity analysis been conducted to quantify the risks to achieving the benefits?
  5. What will you do if benefits are not being realized (and what will you do if they are being exceeded)?
  6. What business plan actions will come into effect once the project's output is in operation, and when?
  7. Is the organizational change management plan in place and working?

It is at this point in time that the project is ready to go into operation. If the focus on the core need and the benefits has been maintained, the operations team should be in a good position to adopt the solution (working to their implementation plan) and ensure that it adds value. If benefits focus has not been apparent throughout the project until now, the risk is high that the end output may not be suited to realize the original need. If this happens, you may have a project failure on your hands.

Operation: Delivering Benefits After Project Completion

Successful project delivery is an important first step to achieving benefits—but completing a project on time, on budget, and to expected quality levels does not guarantee the successful realization of benefits. Also, the level of difficulty in implementing the project is not a measure of its success in delivering sustainable benefits. The most important phase in benefits realization is operations, to ensure that the output of the project delivers the intended results and new, unforeseen benefits over its life cycle. The project implementation plan should be well in progress by this stage, including all necessary change management steps and actions.

Benefits realization plans can be structured in “layers”—that is, specific project benefits can be measured regularly and aggregated at a program and/or portfolio level for strategic benefits assessment and tracking. The level of detail at which you track benefits is dependent on the impact that the deliverables have upon the organization. Having a benefits strategy map helps to distill this.

Your business case should have made it clear that the intended benefits will be tracked in a benefits realization plan once the output is in operation. A simple color-coded example of such a plan (many different options/templates exist) is shown in Exhibit 4.

Sample benefits realization plan

Exhibit 4: Sample benefits realization plan.

Conclusion

The realization of project benefits can be maximized by focusing on the following seven points:

  1. Initiation: identify and be clear about the “core need” and the reason for the project's existence
  2. Initiation: distill what is required to turn the anticipated benefits into reality, create a succinct message, and focus on these benefits in the business case
  3. Planning: instill “benefits tracks” through benefits mapping to your organizational strategy, create an implementation plan alongside the project management plan, and ensure that project governance controls focus appropriately on achieving the end-goal benefits
  4. Delivery/execution: monitor progress against your project management plan and project implementation plan
  5. Ensure that benefits focus is woven into project reviews
  6. Close (i.e., project “go live”): assess the benefits map and stated benefits against the implementation plan
  7. Operations: monitor progress against targets and ensure that benefits are delivered

If at any stage your project is deemed not to be adequately focused on achieving its core need and the resultant benefits, actions must be agreed upon and owned by appropriate parties to change the focus.

Glossary of Terms:

Terms Used Brief Description
Project benefits The results to be gained or derived after completion of the project.
Business case Why the project is being done, with justification of the resources required to implement it.
Benefits realization The process to deliver to the customer/stakeholder the intended project benefits upon completion.
Project life cycle The phases a project goes through from start to finish. A project life cycle typically starts with Initiation to define overall needs, then to define in more detail through Planning, leading to a controlled Execution or Delivery phase, through to a project Close (or, “go live”) and a handover to Operations.
Project management plan The Plan to control the Execution stage of the project.
Project implementation plan The Plan to describe and subsequently execute how a project's end output will be put into effective use after launch.
Sensitivity analysis An assessment that considers factors of uncertainty to achieving goals and how they can affect their achievement. Sensitivity analysis is often carried out using a mathematical model.
Governance group A management group (usually consisting of senior managers) that governs key decisions for the project.
Strategic objective A fundamental, long-term objective that the organization is striving to achieve, which has a wide-ranging impact on initiatives and projects and organization implements.
Output A specific result gained either during or at the completion of a project, normally put into operational use.

References

Jenner, S. (2009). Realising benefits from Government ICT investment – a fool's errand? Reading, UK: Academic Publishing. Retrieved from www.academic-publishing.org.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2010 Gareth Byatt
Originally published as a part of 2010 PMI Global Congress Proceedings – Melbourne, Australia

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