The Money Files

Last time I wrote about the business benefits that you might want to consider for your business cases. But identification of the benefits is only the first step. The training I was putting together was an hour-long overview, so nothing really deep dive, but I wanted to cover the process for managing benefits beyond simply brainstorming the things we could list to justify the business case.

This is the process I included in my presentation.

1. Identify

This is the step covered in my last article. Define what benefits the project is expected to deliver. Consider financial, customer, operational, strategic, employee, and ESG benefits.

As well as the list I shared last time, go back to some past business cases and see what kind of things they included, as well as the level of detail expected. For example, some business cases I’ve seen are really high-level with hardly any detail and they still got approved! I think it depends on how much you have already socialised the idea and how much the exec team want to do the project… But don’t waste too much time doing the work if you don’t need to in order to get it approved. Maybe stick to two or three good quality benefits instead of listing out 15 non-quantifiable benefits instead.

2. Define and quantify

Make each benefit SMART (Specific, Measurable, Achievable, Relevant, Time-bound). Where possible, quantify in financial terms or KPIs.

This is the step where you’ll spend the most time. It’s normally quite easy to work out the kinds of benefits you’ll get from the project activity. It’s really hard to agree what the baseline is and how you are going to work out the measures going forward.

3. Map and align

Link each benefit to project outputs and strategic objectives. Ensure they support organisational goals.

Do this on a slide to include in the business case or just in a paragraph. This bit doesn’t have to be too much work but you will want to evidence to the decision makers that you have thought about strategic alignment.

4. Plan for realisation

Clarify how and when each benefit will be achieved, who owns it, and what dependencies exist. Go back to step 2 – normally it’s the person who owns the baseline data who will own the ‘new’ data for the benefit. Think about when the benefit kicks in. If it’s about more sales, do they happen in the same month as you made them on the call? If customers have 60 days to pay their invoice, maybe you need to recognise the revenue 60 days later?

This step is another time-consuming one as you work out and negotiate all these pieces.

5. Track and measure

Include plans to track benefits through delivery and beyond. Does the project need to deliver a new dashboard to track sales or some other target? Add those tasks to the project plan otherwise you’ll get to the end and have no way of measuring your achievements.

6. Review and update

I wish I could have made this into 5 steps for the training because 6 doesn’t fit so nicely on a slide! But there is this final step which is to keep benefits under review. Update the business case as the project evolves or as assumptions change. This might mean going back around the approval process if the benefits are hugely different.

Hope that helps with your next business case and benefits discussions! Let me know what else you do in the comments below.

Recently a colleague asked me to do some training on business case benefits – how to identify them, manage them and track them. We spent a lot of the time thinking about different types of benefits, and I thought the list we brainstormed might be useful to you too.

Why not copy/paste this list or bookmark it so that next time you are creating a business case you can review whether you’re going to get any of these types of benefits?

1. Financial Benefits

Let’s start with the obvious ones, and the ones most execs, in my experience, tend to care about the most – the money benefits. You might have:

• Increased revenue (e.g. from new products or markets)
• Improved EBITDA (earnings before interest, tax, depreciation, and amortisation)
• Cost savings (e.g. from process efficiencies or automation)
• Avoided costs (e.g. preventing fines, reducing waste, or legacy system support)
• Improved cash flow or working capital efficiency

Working capital efficiency benefits were only something I came across on a project last year. While they might not make such great headlines as increasing revenue, they are definitely something you should be looking at if you have the opportunity.

2. Customer Benefits

Next up, benefits to your customers.

• Improved Net Promoter Score (NPS) or whatever measure you use to track customer satisfaction
• Reduced customer complaints or complaints about not-so-serious things
• Faster response/resolution times
• Enhanced customer experience (e.g. self-service tools, more intuitive systems)
• Increased customer retention or loyalty

3. Operational/Process Benefits

Next, we looked at internal benefits.

• Faster cycle times or reduced lead times
• Better data quality
• Improved productivity or throughput
• Standardisation or simplification of processes
• Increased system uptime or availability
• Improved compliance with regulations or standards

Some of these will translate into a financial benefit, for example, if you reduce the time it takes to answer a customer service call, you’d expect an agent to be able to do more calls in a day. Each call might turn into a sale, so there is the potential for increased revenue as a result of more calls answered. That kind of thing. You then start getting into the realms of assumptions – we assume 50% of calls convert to a sale, or something like that. I’d lean on your finance team or business planning and forecasting team here rather than try to guess at what the right assumptions might be.

There’s no reason not to include process benefits – they are easy to track for the most part – but if you can convert them to money benefits you might find your business case stacks up better.

4. Strategic Benefits

Personally, I think the strategic benefits are a bit vague. These are the kind of benefits you’d list in the exec summary to convince people of strategic alignment and the overall  ‘goodness’ of the business case, but you wouldn’t necessarily put them in a financial model.

• Entry into new markets or segments
• Support for strategic goals or transformation
• Improved agility or responsiveness to change
• Future-proofing the organisation (e.g. through technology upgrades)

5. Employee and Organisational Benefits

Benefits to staff often use similar measures to the customer service metrics, so if you can reuse any calculations, assumptions of measurement methods, then that will save you time.

• Improved staff engagement or morale from staff satisfaction surveys. Best to make these the ‘official’ surveys but you could also do ad hoc surveys before and after your project goes live to assess the difference
• Increased staff retention
• Better tools or systems for employees
• Upskilling or capability building
• Reduced manual work or rework

Get your HR team involved in measuring and tracking people-related benefits as they probably have access to a lot more data than you will about turnover, retention and so on.

6. Environmental, Social, Governance (ESG) Benefits

Even if you think your project might not have any benefits that fall into the corporate/social responsibility or ESG category, spend a few minutes thinking about them as you might find something.

• Carbon footprint reduction
• Waste reduction
• Improved sustainability reporting
• Better ethical or diversity practices
• Community or social impact

These are pretty hard to track in my experience. Waste reduction and recycling not so much as you can measure what you throw away, but carbon reporting can get quite complicated, especially if you don’t have someone in your organisation who is responsible for this.

7. Risk Reduction/Avoidance

Finally, we talked about the benefits of reducing (or avoiding) risks, including:

• Reduced operational risk (e.g. from old systems, manual processes)
• Improved data security or resilience
• Better business continuity or disaster recovery

Which of these could you use in your business cases?

In my early days as a project manager, my business cases and PIDs were full of non-quantifiable benefits. The kind of improvements that I thought we could get but weren’t set up to track.

In my more recent years, I’ve been heavily focused on quantifiable benefits, most specifically the money-related ones. Anything that presents a trackable, cash improvement is something to focus on. If it improves the bottom line, managers want to know about it.

There are also quantifiable benefits that are harder to track like reducing cycle time for invoicing and reducing energy consumption. These would lead to financial savings, but they are more difficult to pin down and measure realistically with no other influencing factors. Cycle time, for example, may lead to bills being paid faster which would lead to better cash flow and increased bank interest, but how do you separate that out as a benefit of just this project and not something to be attributed to one of the many other projects that are doing their bit for continuous process improvement?

Energy consumption can be tracked, but it’s several steps and calculations – it’s doable but harder. That’s not to say we shouldn’t do it, but it is something that you have to put effort into tracking.

Non-quantifiable benefits seem to have dropped out of favour. For example, staff satisfaction survey results is a good one that I used to mention a lot in project documentation. However, there are lots of things that influence staff satisfaction, and I’m sure my projects only played a very small part in influencing the results one way or another.

Also, new initiatives that once seemed completely life changing and a huge improvement quickly become ‘the way things work around here’ and the benefit tails off to nothing. No one would want to go back to the old process, but equally no one is celebrating the new process 6 months later when it’s just normal BAU.

I learned this on a Six Sigma course I took many years ago where the instructor talked about giving customers a biscuit with their coffee in a coffee shop. At first customers were excited they were getting a biscuit for free, but over time they came to expect that service and were disappointed when they didn’t get it, but not more happy because they did.

Therefore there is a balance to be struck with benefits: you want a mix of both quantifiable (financial and other) and non-quantifiable. But not so many that they all become meaningless. And not so few because you can’t be bothered to put the tracking mechanisms in place for more.

Be realistic about what you can achieve with benefits and how much time people really are going to spend on tracking the more difficult ones. If they believe that it’s worth tracking, they’ll do it, but if they feel energy consumption, for example, is tracked adequately through other types of environmental reporting or projects, they probably won’t be falling over themselves to create project-specific benefits reporting.

Talk to the key stakeholders about what sort of benefits you are putting forward for a project and make sure they are reasonable, measurable (where possible) and realistic.

Making a recommendation? Whether you’re doing a formal business case or a quick paper for your boss, here are 5 things that you should make sure are covered.

1. Present the options

What are the options you have considered before making your recommendation? Normally you’ll have at least 3:

• Do nothing (what happens if nothing happens – if your project is legal or regulatory you might not have a do nothing option)
• Do something (minimum intervention)
• Do more than the minimum.

Write a few sentences about each, or if you are doing a verbal presentation, spend a moment outlining each.

The option chosen should be practical and deliverable. In fact, all the options should be reasonable – suggesting pointless activity is a waste of time and undermines your credibility. There’s no point putting forward an option to deliver 100% improved customer service if it needs an investment of £2m and you know there is no way your company is going to go for that.

2. Present the choice

Next, say which one of your reasonable options you are putting forward.

Explain why. Be clear and don’t assume they know anything about any of the analysis or thinking. What’s the obvious choice to you might not be clear to them.

Explain why the other choices are not appropriate to pursue at this time. You don’t want to spend loads of time on explaining why you have discounted them, but you might need to justify the financials so link out to (or have to hand if you are presenting) info that stakeholders can use to look at the detail.

Hopefully they won’t need it as they should trust that you’ve consulted the right people and made a sensible choice.

3. Present the benefits

Review the benefits that come with the chosen option and make sure you can justify them. Are they clear, measurable and reasonable? Are there benefits that look good on paper associated with the rejected options that you should explain? Normally, business leaders go for the ‘biggest benefit’ choice so if you aren’t selecting that one, be sure you have clearly justified why not.

Don’t over-estimate the benefits because of all the sections in this presentation or paper, the benefits are the thing most managers will remember. They’ll be looking to you to deliver those, so I would recommend being on the cautious side!

4. Check the language

The decision might go up the chain to people who don’t know the jargon of your department. Check through your proposal or presentation script and make sure you’ve explained any acronyms or project-related terminology that other people might not understand – or that they might interpret incorrectly.

Get someone else to read it through if you are worried that you’re so in the detail that you won’t be able to pick out terms that someone else can’t understand.

5. Read through your recommendation again

If you were presenting this to a family member or non-project manager friend, would they understand your justification for the choice? It should be clear that you have chosen the obvious winner and that you can explain why that is the most appropriate choice at this time for your business. If there is any doubt, go through and strengthen the language.

Finally, check for spelling and grammar errors, and make sure that people’s names and job titles are spelled correctly. Circulate the paper for comment amongst your subject matter experts if it is something you need to get input on, and then send it off to your boss or whoever needs to see it.

The decision maker might not agree with you, but you can be sure they’ve seen the best possible justification and case for the choice.

Earlier this month I looked at spring cleaning your portfolio to check for strategic fit and also to ensure resources were being managed appropriately.

Now it’s time for step 3 of my decluttering plan: setting clear priorities. You can’t keep everything tidy if you don’t have a plan for how to manage the space going forward. Otherwise, the clutter starts to build up again (looking at you, cupboard under the stairs).

It’s really important to set clear priorities for the remaining projects in the portfolio (the ones you haven’t swept away with the clean sweep brush) and develop a roadmap for execution that aligns with organisational goals.

You probably already have a strategic, portfolio roadmap, and if you haven’t reviewed that yet, it’s worth it, so you’re starting this section of the year with a fresh slate and clarity about where everyone is going.

Focus on high-impact initiatives

Scan through the portfolio and make sure projects are prioritised appropriately. Use scoring models and an alignment matrix, or whatever prioritisation model you have agreed with your stakeholders, to ensure everyone is focused on the high-impact initiatives. Typically, these are the ones which are relatively straightforward to deliver and have high benefits. You might use a PICK chart (let me know if you want me to write about PICK in a future article, it’s quite a useful tool to Google if you don’t already use it) or something similar to pull out the projects where it’s worth investing your time and resources.

Remember, even if you did this exercise a while ago, things might have changed. The business context is different now to how it was even 3 months ago, so it’s worth keeping prioritisation under review.

Create (or refresh) your roadmap

If you already have a roadmap, pull it up and check that the key milestones and timelines are still valid. Adjust as necessary, being as flexible as you need to be and flag anything that needs approval before it is updated. For example, you may have internal rules about the number of projects that can go live at any one time in an area and now the portfolio plan shows that guidance would be broken with the current timescales. Discuss internally and update so that you’re not overloading any single area with too much change at once.

Engage stakeholders

Finally – although this is something you’ll be doing throughout the spring cleaning process – check in with key stakeholders. They should be aligned and supportive of project prioritisation, both the process for assessing priorities and the final outcome of the prioritised list.

Hopefully, getting buy in is straightforward, because you’ve aligned priorities to the strategic plan and everyone can see that this roadmap is the best approach to making sure all the projects get the organisation closer to delivering on the overall objectives.

When all that is done, you can put down your dustpan and brush. The old stuff has been swept away and the portfolio is looking clean and refreshed. After your spring cleaning I think you deserve a well-earned rest!