Why Benefits Management is Important?
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An advantage is defined by the firm’s office as “measurable improvement that results from an outcome perceived as an advantage through one or more interest representatives contributing to one or more of the organizational objectives”.
Service management defines the services, implements the necessary changes, and ensures that the services are delivered. Its goals are:
- Define the advantages and disadvantages of the proposed work
- Definition of measurement mechanisms
- Make all necessary changes to achieve the benefits
- Measure the improvement and compare it with the business case
Profit realization is the driving force behind any project, program or portfolio. The definition of an advantage is broad — it is simply a positive effect of change. Since any change can have a negative impact, the management of social benefits also covers the management of disadvantages. These are the negative effects of changes that the host company is willing to accept as part of the cost of achieving the positive benefits.
Some benefits are tangible and others are not. Examples of concrete benefits are “cost reduction” or “job creation”. Intangible benefits are things like “improving the reputation of the company” or “reducing risk”.
The value of the services is an essential element in assessing the investment in the business case. The business case belongs to the applicant, who is ultimately responsible for realizing the benefits of the business case.
Advantages are derived from the results of change management. The daily responsibility for the implementation of changes and benefits lies with one or more operational change managers. The relationship between project or program managers and operational change managers is crucial. Output delivery and change management must be closely coordinated.
Benefits management is an iterative process with five main steps
Define the pension plan: This explains how benefits are managed. It establishes guidelines for areas such as measurement, roles and responsibilities, priorities and key performance indicators (KPIs).
Identify and structure benefits: Needs are captured from sources such as project mandate and stakeholders. Benefits depend on the achievement of results and the achievement of results. The relationships between these two elements must be understood through benefit modeling and mapping. Each advantage (and disadvantage) must be documented in terms of priority, interactions, value, timing, and ownership.
Plan the execution of services: During this step, baseline measurements are recorded and objectives are agreed. Baseline measures identify the current performance of a process so that improvements can be measured. The performance plan illustrates the timeline and milestones for achieving the benefits, including any dependence on project results or interactions between benefits.
The identification and planning of benefits (ex-ante before starting the implementation of an initiative) attempt to answer the following questions:
- What will be the benefits of a specific initiative (to overcome a problem that prevents the transport system from achieving its objectives)?
- How will these benefits be measured?
- What KPIs should be used for benefit monitoring and evaluation?
- Who is responsible for the measurement?
The results of benefits identification and planning consist of performance profiles, a performance logbook, and a performance management plan.
Implement change: Benefits arise when something changes. It is generally a permanent change in attitudes and behaviors as well as physical changes. When implementing changes, new value-added opportunities must always be sought.
Realizing the benefits: Changes in the way people work must be integrated to ensure that the benefits continue to be realized. An operational change manager must monitor implementation and ensure that the change is permanent. Most benefits can only be realized after the completion of a project or program. Long-term measures and monitoring of implementation should be documented as part of the transition to maintaining the status quo.
The evaluation of benefits (ex-post after the implementation of an initiative) includes the following points:
- Assess whether the initiatives have delivered the expected benefits, including their performance against key performance indicators.
- Explains any discrepancies between actual outcomes and expected benefits.
- Identifies any lessons learned that can be used to improve the way future initiatives are implemented.
- Provides accountability for funds spent on behalf of the public.
The results of the performance review include a performance management plan and an updated performance register. The results and experiences can be recorded in an assessment report.
Major areas the benefits management involves
The project
In most cases, the project ends with the provision of a service. However, some projects continue throughout their life cycle to achieve measurable benefits. A project must be clear from the outset as to whether it will produce results or benefits. This governs the way in which the project is constituted and managed.
If a project is only responsible for achieving results, it must work with the person responsible for achieving the benefits. It can be a program, a portfolio or an organization that operates as if nothing had happened.
Program
The benefits associated with strategic organizational change are reflected in multi-faceted project programs and change management activities. These programs can involve complex interactions between the results of individual projects, results, and benefits.
Splitting program benefits between individual projects and double counting benefits from one program to another can be difficult, especially when allocating approved investments. These issues should be addressed pragmatically and through effective mapping and stakeholder consultation. Where appropriate, the benefits should be attributed to a particular project on the basis of the principle of the maximum contribution.
It is important to have a consistent approach to performance management in a program, in particular, to ensure the coherence of actions. Without a consistent approach, it is difficult to combine the benefits of several projects and assess their joint impact on business performance across the enterprise.
Wallet
A portfolio offers a number of strategic advantages. It will do this through its constituent projects and programs. Strategic allocation ensures that investment decisions and the scope of each project and program are guided by the contribution of the benefits to achieving the operational, organizational or business strategy.
A portfolio should have a consistent set of performance management guidelines for all programs and projects, including monitoring, forecasting, and reporting. In this way, the benefits can be compared and aggregated across the portfolio. It also helps to minimize double counting and enable a fair assessment of the investment. This is essential to categorize, prioritize and balance the phases of the portfolio lifecycle.
A clearly defined and flexible performance management policy at the portfolio level will significantly reduce the work required to develop governance guidelines at the project and program levels.
At the portfolio level, it is possible to use performance management performance data (e.g., distortion of optimism, i.e. the tendency to overestimate benefits and costs). It can be used to improve performance management practices by sharing and leveraging the insights gained.
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