Benefits Management: Benefits for you
APM Midlands Branch Event – 13 February, 2017
Dr Richard BreeseSenior LecturerSheffield Business SchoolSheffield Hallam [email protected]
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.