Ben mgt can be simple2

© Totally Optimized Projects 2015

Benefits Management Can Be Simple

© Totally Op+mized Projects 2015 0


Why is Benefits Management made so difficult?

•  In a recent discussion with another leading Benefits Management practitioner (Stephen Jenner), we both asked, “Why is benefits management made so difficult?”

•  New structures, new roles and complex measurement and tracking regimes are created.

•  These normally exist outside of normal project delivery thereby creating a totally unnecessary overhead.

•  But Benefits Management can be simple

•  When you focus your end-to-end delivery processes on benefits and their realization from the outset.

•  Here are 10 steps to simple, highly effective benefits management.

Jed Simms, Creator of TOP® and Founder of Totally Optimized Projects

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Step 1 Start with the end defined

Start by defining your ‘desired business outcomes’ (O) — clear, specific, measurable definitions of the end states to exist in business-as-usual after the end of the project when everything is working ‘just right’.

Delivery of these outcomes is your primary measure of success.

And they only take a few hours to identify and a few days get right.

O

You are here Where you want to be

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2 Identify the benefits and value of delivering these business outcomes

These benefits (B) should be maximized (rather than limited to ‘just enough’ to cover the project costs). Maximizing your benefits can often double the identified value of a project.

The financial benefits (V) can then be clearly quantified so that any changes to their value can be tracked throughout the project’s duration and beyond.

What is important is that each benefit is attached to the business outcome that will deliver it. Now you know the value of delivering each outcome and you know which benefits will be available when you deliver each outcome. This greatly simplifies benefits tracking.

O


B V

Benefits & value by outcome

3


Change Ac:vi:es required

Step 3 Identify all of the changes required to deliver the desired business outcomes

To identify ALL of the changes required you will need to know your organization’s current state (CS) in detail.

The change activities required to deliver each outcome need to be identified . Then, when you cost this workload by outcome, you will know the cost of delivering each outcome vis-à-vis its value.

High cost/low value outcomes can then be eliminated.

CS O


B V


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Step 4 Define the project outcomes as a subset of the business outcomes

When you define the project’s outcomes as a subset of the agreed business outcomes, you eliminate the unknown ‘value gap’ that too often exists between what the project delivers and what the business needs to realize the outcomes, benefits and value.

This approach also ensures that the workload remaining to deliver the business outcomes, after the project outcomes have been delivered, is known to be within the business’ capability to deliver

This ensures that all of the benefits are able to be delivered.

Change Ac:vi:es required CS O B

V


O Subset project outcomes

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Step 5 Allocate the benefits that become immediately available on delivery of the project outcomes

Some benefits will be automatically realized through the delivery of the project outcomes.

Other benefits will be available to be realized immediately but require some additional work. These benefits should be assigned to the project so that their delivery is incorporated into the project delivery plans. (Eg decommissioning a replaced system.)

This simple step ensures the project team is focused on realizing business benefits.

Post-project benefits remain with the business.


V

O B

V

Immediately available benefits

by outcome

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Step 6 Assign the change activities required to deliver the project outcomes and benefits

Most of the identified change activities will become part of the project’s workload. Once assigned to the project this workload can be planned and scheduled.

NB At the project level, the change activities are again aligned to the project outcomes and benefits they will deliver.

You have now defined your project workload so that it is directly aligned to delivering both the project and the business outcomes and their benefits and value.

The project is now your primary benefits and value delivery vehicle.


V

O B

V

Project Ac:vi:es required

Ac+vi+es assigned to the project

7


Step 7 Deliver the project, its outcomes and benefits

This is standard project/program delivery management except that the end points are the (measured) delivery of the project outcomes, defined as a subset of the business outcomes, and the immediately available benefits.

The project is now value delivery focused.


V

O B

V

Project Ac:vi:es delivered

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Step 8 Track and measure the delivery of the project’s outcomes and benefits

As each change activity is linked to a project outcome, tracking each change activity’s 100% completion cumulatively measures the delivery of the project outcomes which enable the outcome’s benefits to be realized and their value to be ‘banked’.

It is all a simple, straightforward activity-outcome-benefit-value delivery process using the project as the principal value delivery vehicle.


V

O B

V


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Step 9 Action the remaining (business) change activities to realize the business outcomes, benefits and value

Delivery of the project outcomes provides a measurable starting point for the subsequent ‘benefits delivery plans’ that will deliver the business outcomes, benefits and value.

These plans are executed by the business after the successful delivery of the relevant project outcomes.

NB If the delivered project outcomes are compromised, some of the expected benefits may be lost and the benefits delivery plans may need to be adjusted to what can be delivered. But this is all visible, measurable and manageable.

Change Ac:vi:es (Benefits delivery plans) delivered CS O B

V

O B

V


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Step 10 Track and measure the ‘banking’ of the benefits

Tracking the delivery of the outcomes automatically tracks the availability of each outcome’s benefits and value. No separate tracking of benefits is required.

Once a specific outcome has been verified as delivered, then realization of its associated benefits can be tracked and measured through the completion of the benefits delivery plans and the results achieved.

Where the results are not to expectations, the reasons can be easily ascertained and remedied.

Change Ac:vi:es (Benefits delivery plans) delivered CS O B

V

O B

V


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It really is that simple



BUT…this process does not exist in most organizations

The Benefits Management Process

1Define desired

business outcomes

2Identify

resultant benefits and

value

3Identify the

required change activities

4Define a subset of project

outcomes

5Allocate

immediately available benefits

6Assign change

activities to deliver project

7Execute the

project

8Deliver the

project outcomes and

benefits

9Action the business benefits

delivery plans

10Track,

measure and 'bank' the

benefits and value

Business activities

Project activities

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1Define desired

business outcomes

Few projects ever define their desired business outcomes in clear, specific, measurable terms

•  The commonly targeted “objectives, goals, deliverables or capabilities” are inadequate as a basis for effective benefits management.

•  Where “outcomes” are claimed they are often benefits or not specific enough, not being measurable by a true/false question (eg ‘can we or can’t we?)

•  Only when you have a list of clear, specific outcome statements, each measurable with a true/false question, do you have the basis for simple, highly effective benefits management.

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Benefits can exist but are often minimized

•  Benefits and financial values may exist but are not linked to their delivering business outcomes.

•  Financial benefits are usually limited to ‘just enough’ to justify the costs of delivery (thereby minimizing the value of benefits)

•  Often, only financial benefits are allowed (thereby minimizing the number of benefits)

•  Benefits are mistakenly treated as the offset to the project’s delivery costs, not as the purpose of the project investment.

2Identify


value

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Projects don’t identify all of the changes required to deliver the benefits

•  Project activities identification is usually limited to only the activities the project team will action. The business change activities are neglected.

•  Change management is seen as a different skill set, so a false separation between project and change activities is created and sustained. Business value falls through the gaps.

•  As the current state is rarely fully analyzed, critical changes are often missed resulting in late-in-the-project scope amendments or subsequent operational workarounds — both of which reduce the value delivered.

3Identify the


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The project is not defined as a business outcomes/benefits delivery initiative

•  Projects are more often focused on “What they have to do” than “What they have to achieve.”

•  Projects list outputs, deliverables, milestones or ‘capabilities’ and consider it to be the accountability of the business to make use of these outputs.

•  The direct line from business outcomes to project outcomes is usually missing. The project is defined with little-to-no cognition of the business outcomes desired.

•  After the project delivers, the business has to work out how to leverage the results.


outcomes

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Benefits are not seen to be delivered by projects

•  It is a mantra of many project approaches that projects are NOT concerned with benefits.

•  Many commonly used project methods do not mention benefits.

•  Project delivery schemas often show ‘benefits delivery’ as an activity to be done after the end of the project.

•  Therefore, the allocation of benefits to the project is not considered. Benefits are seen as the business’ accountability.

•  “Programs” do focus on benefits, mostly as a parallel stream of activities rather than as the core purpose of the program.

5Allocate


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Projects are not seen as managing change

•  ‘Change management’ is seen as a different stream of activities and a specialized skillset focused on the ‘people’ side of projects.

•  The change aspect of project activities is, therefore, rarely recognized.

•  Yet all projects, regardless of what type of project they are – systems, organizational, construction, merger – are and should be managed as change projects.

6Assign change


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Project execution is not seen as a benefits management activity

•  As a result of the (lack of the) previous steps, when the project is executed it is not driven by the desired business outcomes or focused on delivering the business benefits. It becomes an end in itself.

•  Decisions are made on the project (by both the project and governance teams) that support the project’s delivery often at the expense of the business benefits and ongoing operational costs.

7Execute the

project

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Projects do not see themselves as delivering ‘outcomes and benefits’

•  As a result of the (lack of the) previous steps, the project is not aiming to deliver ‘project outcomes and benefits’ (although ‘programs’ will usually aim to deliver them).

•  Projects deliver their deliverables and stop. The rest is up to the business.

•  Even some programs will only deliver ‘the capability to deliver outcomes and benefits’ rather than actually deliver a set of specified outcomes and benefits.

8Deliver the


benefits

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The business now needs to take on delivering the benefits without knowing if the project has made them possible

•  As a result of the (lack of the) previous steps, all of the benefits delivery workload falls onto the business. But…

•  The business does not have a clear, verifiable starting point (the delivery of clear, specific, measurable project outcomes) and therefore cannot plan its delivery workload effectively.

•  The business often has to assume the project has delivered the prerequisites for the delivery of the benefits — which is often not correct.

•  The failings of the previous steps compromise this benefits and value delivery step.


delivery plans

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10Track,


benefits and value

Usually only a subset of the value that could have been delivered is ‘banked’

As a result of

•  The outcomes not being defined (1)

•  The benefits being minimized (2)

•  The workload to realize them not being fully identified (3)

•  The project not being focused on benefits delivery (4-8)

•  The inability to ensure the project has enabled the delivery of the planned benefits (9)

The actual benefits ‘banked’ can be a minor subset of the actual value that could have been available.

As a result most projects deliver less than 50% of the available value!

Organizations therefore go through the ‘pain’ of project delivery without realizing the ‘gains’ available.

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1Define desired

business outcomes

2Identify


value

3Identify the



outcomes

5Allocate


6Assign change


7Execute the

project

8Deliver the


benefits


delivery plans

10Track,


benefits and value

The Benefits Management Process

Business activities

Project activities

The situation in most organizations is one of inadvertent ‘value destruction’

But it is simple to solve in two steps

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1 The TOP Value Equation™ sets you up to deliver the benefits

Outputs of the Value Equa+on

Derived directly from the Value Equa+on.

The TOP Value Equation equips you to define your

•  Desired business outcomes

•  Maximized business benefits

•  Trackable financial benefits

•  Delivery change activities

That in turn allows you to define your

•  Project outcomes

•  Immediate benefits

•  Project change activities

1Define desired

business outcomes

2Identify


value

3Identify the



outcomes

5Allocate


6Assign change


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The project can now become your primary benefits delivery vehicle

Now your projects are outcomes and benefits focused

Your project is now set up to deliver the

•  Project outcomes and

•  Immediate benefits

1Define desired

business outcomes

2Identify


value

3Identify the



outcomes

5Allocate


6Assign change


7Execute the

project

8Deliver the


benefits

26


3 TOP Benefits Delivery equips you to deliver the remaining business outcomes, benefits and value in full

1Define desired

business outcomes

2Identify


value

3Identify the



outcomes

5Allocate


6Assign change


7Execute the

project

8Deliver the


benefits


delivery plans

10Track,


benefits and value

The delivery of the project outcomes and benefits provides the (measurable) basis for planning and executing Benefits Delivery Plans that deliver the business benefits and value

27


The key is to start with the TOP Value Equation™

TOP Benefits Delivery Module

Project/Program Management – now focused on delivering value

The TOP Value Equa+on™ Module

Derived directly from the Value Equa+on.

28


It really is that simple

www.TotallyOptimizedProjects.com
