CEOs rarely like surprises. Particularly not bad ones. However, more often than not, leadership teams can find themselves questioning why a change that has delivered the planned outputs, hasn’t delivered the expected business outcomes.
Embedding a set of effective Benefits management processes provides the opportunity to avoid such surprises. At their heart, these processes must focus on:
- Articulation of the ‘true’ value of the change – By considering both the financial benefits and the wider enabling capabilities created, offset against the true cost of the change
- Use the insight created for effective decision-making – Trust in benefits data to drive changes in resource prioritisation, strategy execution or balance delivery risk profiles.
Even if an organisation does manage to get to grips with these principles, it still has the potential to underperform in the longer term. Any benefits management methodology therefore must consider the entire lifespan of the project and the benefits case, from change mobilisation through to the end of the defined realisation period.
Typically, there are four stages which should be considered to unlock the value from Benefits Management:
- Top-Down Estimates: Identifying the estimated benefits range and laying the foundations for future development of the business case
- Refinement: Providing a more definitive view of the benefits total and assigning confidence levels
- Assurance: Putting the required controls in place and conducting the necessary testing to assure the business case
- Management and Delivery: Reporting on benefits delivery vs. plan, identifying required interventions and reforecasting future benefits.
At the most simplistic level, this approach facilitates resources being used in the most efficient way, as well as providing transparency to stakeholders. It can strip out politics from decision making, focusing stakeholders on prioritising the delivery of actual value, and shifting focus away from pet projects. Ultimately, it supports the delivery of business outcomes rather than project outputs.
However, benefits management is hard. Consequently, many organisations struggle to embed true, value-enabling benefits management processes into their teams. In our experience, this is often due to multiple factors:
- The right people need to be involved. Benefits management needs both quantitative and qualitative analysis. Identifying these individuals, establishing collaborative ways of working, and agreeing sign-offs are all critical
- Incentives need to be aligned and balanced. A ruthless focus needs to be maintained on the realisation of benefits at a whole-organisational level. Formal and informal incentives must be aligned
- Honest conversations and analytical rigour are required. Benefits are often articulated as best-case in the first instance, and are later reduced as the project progresses. Planning around worst-case scenarios help stakeholders understand the range of possible outcomes
- Don’t over-engineer the toolset. Scrutiny becomes hard when tools aren’t in place to enable quick analysis. Conversely, tools can become too over-engineered, such that the users struggle to engage – resulting in no-brainer changes being blocked rather than accelerated. Utilising effective tools and methods to articulate benefits will drive quality, consistency and pace of delivery.
The upcoming blogs in our series will look at two themes: the importance of people, and managing risk in Benefits Management.