Benefits management. Quite literally the last frontier for project managers and without a doubt, the most difficult measure for all projects that aspire to be recognised as successful.
Of all the capabilities required to deliver a successful project the management of the benefits – from identification to cataloguing to realisation – is by far the most nuanced and most open to interpretation and dare we say exaggeration. It is also the most likely to experience lack of ownership.
So why is benefit realisation so difficult and why is there often confusion (and at times resistance) about who owns the delivery of the benefits?
Whose Benefits Are They Anyway?
In a typical project structure, the sponsor is more often than not from the C-Suite and tagged with accountability for project outcomes, particularly the delivery of the project’s benefits into the business which is quite literally the reason the project is running.
It’s important to note that benefits realisation is not the responsibility of the project management team: Their responsibility is delivering the project on behalf of the sponsor but it is the sponsor who must realise the benefits into the business.
You Start Off with a Best Guestimate
At its core, a project is a journey of discovery where nobody really knows the final destination. At the point of initiation, usually a business case, many assumptions are made which may be proved correct or incorrect as the project unfolds.
The starting assumptions are very often best guesses about what may – or may not – happen in the future based on often incomplete information. And so it is with benefits, they also fall into the category of being a best guess at a point in time.
As with anything that requires guesswork, assumptions can tend to be proved wrong.
If You Want Approval, Add a Little on Top
While the original benefits estimation is often guesswork, there are additional complications in the estimation of these benefits.
Projects are not spun up in a vacuum. Most organisations have some form of prioritisation framework – and if they don’t, they should – whereby potential projects must deliver a business case to compete for the finite funding pool. The key measures in this battle, i.e. what will it cost versus ‘what will we get out of it?’, is the tangibility – and size – of the benefits.
In a competitive environment, the size and quality of the benefits are crucial in stating the case for priority, getting the requisite approvals and access to the often limited budget for project funding. The reality though is that this is the kind of environment that rewards teams and sponsors that may inflate their project’s benefits to make their case more compelling, even if it is less than realistic.
We Only Like the Good News
The half-brother to adding compulsion to a business case is good news: The C-Suite love it, whether it’s hearing it or delivering it themselves. Bad news is pretty much always, well, bad – no matter how you deliver it.
It’s no different with benefits. The C-Suite need convincing that to part with the company’s money and it’s more likely to do that if they hear how the project will be good for the business and how it will deliver excellent benefits.
However, if there is a culture of gilding the lily within the organisation, it will trickle down into benefits estimation as well.
Are the Benefits Real?
Yes – and no.
When in the business case phase, the benefits are as real as they can be when taking into account all of the assumptions, twists, and turns that may lie ahead of a program. The projection of benefits may be relying on a project that will run over a number of years, even if you aim for regular benefits drops.
But the benefits are not really real until the project ends, and that may be a very different world to the one that was originally envisioned by the sponsor and the project manager when the project was initiated.
Well, They Ain’t Mine!
One of the perennial problems in benefits management, particularly ownership, is perpetuated by the revolving door at the C-Suite level. As restructure remain constant in the corporate world, it’s a rare thing for a project to retain the same sponsor from inception to close.
The impact is that as the C-Suite roles change, so do the sponsors and the reality is that they inherit the delivery of benefits. As with any inheritance situation, this can dilute both ownership and accountability and as the project progresses on its journey, this can lead to a ‘best endeavours’ attitude as opposed to the deeper accountability that comes with the ownership of the benefits right from the business case phase.
So misunderstood – What is a ‘benefit’ anyway?
There are many types of benefits: Soft, hard, internal, external, realisable, and unrealisable. And it goes on. The problem is that with so many definitions and categories of ‘benefits’, it serves mainly to muddy the waters in an already murky pond.
Benefits realisation and management are difficult at the best of times. Clear ownership and accountability is the best defence against many of the issues we’ve flagged here, but it rests primarily with the C-Suite as that is where the bulk of the sponsorship accountability will fall.
Self-awareness of the perils of benefits management, right through the value chain, and strong leadership will go a long way to ensuring that projects have half a chance to not just identify realistic benefits but also to realise them.
Want to talk to us about benefits realisation? Contact us here or call 02 9098 6300.
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