Benefits Management: Benefits for you

APM Midlands Branch Event – 13 February, 2017

Dr Richard BreeseSenior LecturerSheffield Business SchoolSheffield Hallam Universityr.breese@shu.ac.uk

and Committee Member of the Association for Project Management Benefits Management SIG

Outline of my presentation

What is benefits management?

How does it link with organisational goals and with P3M?

The development of BM as a management idea

What BM involves

What can make BM difficult

Terminology

Disbenefit

Benefits realisation

Definitions

Benefit ‘positive and measurable impact of change', (APM Body of

Knowledge 6th Edition, 2012 p124) on the performance of an organisation, contributing to one or more strategic objectives

Benefits Management ‘the identification, definition, planning, tracking and realisation of business benefits'. (APM Body of Knowledge 6th

Edition, 2012 p124)

Benefits Realisation Management ‘the process of organising and managing, so that potential benefits, arising from investment in change, are actually achieved’, (Bradley, 2006, p23)

Disbenefit ‘outcomes seen as negative’ (Bradley, 2006, p18)

Evidence that 'it works‘ (Recent studies)

‘Our results show BRM practices being positive predictors to project success on the creation of strategic value for the business ‘ (Serra and Kunc,

2015)

‘most organizations are missing major opportunities to add strategic value because they lack a formal and focused approach to benefits management’. (PMI, 2016),

[organisations mature in benefits realisation] ...’are in a position to truly manage business value, even in the face of significant internal and external change and uncertainty’. (Gartner, 2011).

BM helps organisations achieve their goals, gives a better chance of success

Terminology – what is the relationship

between benefits and value?

Disbenefit

Value management

Benefits realisation

Business cases

Business cases and value for money

Benefits expressed in financial terms

Benefits that are quantified

Benefits that are non-quantifiable

https://www.apm.org.uk/news/developing-compelling-business-cases-a-product-and-a-process-webinar/

Benefits and value

How do benefits fit with organisational goals?

Disbenefit

Capability

Critical success factors

Impact

Value management

Benefits realisation

Benefits hierarchy in regeneration(Breese, 2012)

Make ‘Ztown’ a place where people

want to live and workVision

Increase wealth

in ‘Ztown’Objectives

Increase % econ.

active in ‘Ztown’Outcomes

People in ‘Ztown’

obtaining a jobOutputs

How does this all fit with P3M? Where are

benefits delivered?

Disbenefit

Capability

Critical success factors

Impact

Value management

Benefits realisation

Project

Benefits Management (BM)

People involved in many different roles in organisations are concerned with managing benefits in different ways. Strong links with change management, performance management and evaluation.

‘BM’ incorporates a concern for benefits into project and programme management processes and proposes specific techniques and tools for achieving those benefits in practice (Cabinet Office, 2011)

The development of BM

BM arose out of dissatisfaction with investment appraisal techniques, particularly as applied to IT projects and programmes in the 1980’s (Bradley, 2006)

BM has therefore developed earliest in the IT industry, and academic research has been particularly focussed on this sector (Breese et al. 2015)

Stages1 2 3 4

1980 1990 2000 2010

Consultancy, Training, Research Key Players - consultancies and

universities

Incorporation into project

management and IS/IT guidance Key Players - gov'ts and professional

bodies

Networks and maturity models Key Players - diverse

Accreditation in BMKey Players – trainers and educators

The layers and stages model of the

development of BM (Breese et al., 2015)

The development of BM (2)

The promotion of BM within professional project management bodies/government agencies seems to be furthest advanced in the UK and Australia, but it has spread globally

Development of BM associated with the rise of portfolio management (Jenner, 2010) and value management (APM, 2011)

APMG-International Certification in Benefits Management, launched in 2012, accompanied by ‘Managing Benefits’ guidance,

Benefits Management Cycle

Identify and

quantify

Value and

appraise

PlanRealise

Review

Source: Jenner, 2012

Benefits dependencies/benefits mapping

More efficient

business

routines

Higher productivity

Higher profits

New processes

New software package in

small business Enabler

Change

Benefits

Business Objective

Benefits dependencies/benefits mapping

This is one of the simplest kinds of investment, but at every step there is A logical reason why the link should workCertain assumptions which are madeRisks that the logical ‘cause and effect’ relationship might not work, if the assumptions are not met. Dependent on the business context.

The complexity is magnified many times for major business decisions, eg out-sourcing decisions, expansion into new markets. Often the extent to which benefit realisation is within the control of the sponsor is over-estimated

Issues with Benefits Realisation – operational

Defining benefits

Incorporating qualitative benefits

Aligning benefits at different levels. Cause and effect are sometimes highly contested

Attribution of benefits, at higher levels

Setting targets – ‘optimism bias’

Unintended effects of performance targets

Issues with Benefits Realisation - strategic

Different stakeholders have different priorities amongst the range of benefits

Balancing short term disbenefits against long term benefits

Benefits information is used highly selectively, to meet the requirements of the dominant stakeholders

Achieving transformational change is extremely difficult, and aspirations are progressively watered down

The timescale for meaningful benefits realisation is way beyond the timescale for programme management

Summary

BM works at different levels – a mindset and a set of tools and techniques

BM enables organisations to be clear about the benefits to be expected from investments, and provides a life-cycle process to help ensure those benefits are optimised

BM needs to be fitted into the wider approach to change management, performance management and evaluation

BM is not a panacea – it doesn’t take away difficult choices and many factors can undermine its effectiveness

References

Association for Project Management, Benefits Management Specific Interest Group, 2011,

Delivering benefits from investments in change: Winning hearts and minds, APM

APM, 2012, Body of Knowledge (6th Ed), Princes Risborough:APM

Bradley G., 2006, Benefit Realisation Management, Aldershot: Gower

Breese, R., 2012, ‘Benefits realization management: Panacea or false dawn?’ International

Journal of Project Management, Volume 30, Number 3: 1438-1451

Breese, R., Jenner, S., Serra, C. E. M. and Thorp, J. (2015) Benefits management: lost or found

in translation International Journal of Project Management, Volume 33, Number 7: 341-51

Cabinet Office, 2011, Managing Successful Programmes (4th Ed), London: TSO

Gartner, 2011. Benefits Realization: The Gift That Keeps On Giving

Jenner, S., 2009, Realising Benefits from Government ICT Investment – a fool’s errand?,

Reading: Academic Publishing

Jenner, S., 2010, Transforming Government and Public Services, Farnham: Gower

Jenner, S., 2012, Managing benefits: Optimising the return from investments, APMG/TSO

Serra, C. E. M. and Kunc, M., 2015, Benefits Realisation Management and its influence on

project success and on the execution of business strategies, International Journal of Project

Management, Volume 33, Number 1: 53-66

PMI, 2016, ‘Pulse of the Profession’ report, The strategic impact of projects: identify benefits to

drive business results.