Benefits management: I wish we spent more time on this as I think it would help the wider project management community deliver more successfully. We’d know what success looked like, for a start. And we would hopefully work on fewer vanity projects because they would be weeded out – only projects with a decent return on investment (whatever that means to you and however you measure ‘return’) would get started… and hopefully completed.
A benefits dependency map is an easy thing to create to bring some sense of clarity to the benefits you see on a project.
This infographic gives you the headlines: it’s all about linking project objectives through to deliverables and then intermediate and end benefits. Then you can easily see how the project is going to achieve that return the business case talks about.
And if it isn’t clear, you’ve got time to do something about it before realising the project isn’t going to deliver the benefits you expected. Tweak the objectives, change the deliverables – do something to bring the project back in line.
So often when we think about benefits, we think about the ones that relate to money. ROI, NPV, IRR and so on are often what stakeholders care most about.
But not all stakeholders. Sometimes the impact on the business or the customer is more important, or at least equally important, as the financial return.
In this video I discuss 3 softer project benefits. Don’t get me wrong: you can talk about these in monetary terms if you want to, but sometimes looking at other measures is actually more powerful.
There is more information about using these benefits in project selection in this video.
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A benefits dependency map is a fancy way of saying that you have a diagram that links what your project is delivering to the benefits that the business receives as a result.
It has been probably my most useful communication tool with board members. They love it, because they can see exactly why the project is happening and how I am meeting strategic objectives with what I am working on.
Why you do it
While the comms to senior stakeholders is helpful, the major benefit of this kind of diagram is actually the process you go through to draw the thing in the first place. This is because going through the process helps you work out what you should be focusing on.
The map helps you see what is important to deliver and why that is the case. This information can inform your decision making and risk management, making it easier for you to prioritise work in the future. If you know a particular deliverable links directly to a benefit, you can make sure your team focus their efforts on that one.
And as I mentioned, it is also a good communication tool for sharing the overall benefits with stakeholders. Especially if you draw it at a high level so it fits on one PowerPoint slide!
What is a Benefits Dependency Map?
Your benefits dependency map shows the link between your project or programme and the business or organisation’s strategic objectives. Personally, I have found it useful to identify where benefits are ‘claimed’ twice and there are overlaps in the business case. Two different projects in a programme claimed the benefit, and that could have skewed the results (or the interpretation of the results) of what we delivered. Having the map meant that we could link both projects to the same benefit to show that they were both important, without double-counting. That saved me a big headache with our financial team who would have expected twice the cost savings – which would have been impossible!
You can use the benefits dependency map to streamline your projects benefits too. With the information in it, you only focus on the essential, important headlines (although you might want to note the smaller benefits somewhere else).
That works both ways. You can also then cross-reference outputs with benefits to see if you are busy delivering anything that doesn’t directly link to the benefits that you are trying to get.
A further, useful, cross-reference to do is to check that you have enough benefits and that they are evenly spread throughout the project or programme. Are there any areas of the project that support loads of benefits, and other workstreams that have very little in the way of practical benefit-driven output? That will tell you where you should be putting your efforts for resources and prioritisation.
What goes into a benefits map
Creating a benefits dependency map is actually very easy. You read the map from left to right. You create it (or at least, I do) as a flow diagram or flow chart. I do mine in PowerPoint. I use PowerPoint because I happen to have it, I know how to use it and so does everyone else on my team. You can use any drawing package you like or none. In the past I have drawn freehand in my notebook and taken a photograph – it’s low tech but it gets the message across.
Here are the things you need to include in the map.
Start at the left hand side of the page. Think of your page in columns. You will need 4 columns. You can add the swim lane style dashed lines to create columns on the page if you like, but I don’t like to do it that way as I don’t think the lines add anything. I mention it just so you know that you have to split your page into 4. Do it landscape, it’s easier.
Write down the project objectives. Pop these in text boxes (the PowerPoint way) so that they stand out and so you can easily use arrows to link the objectives to the next part of the map.
Outputs are delivery from a project. PM purists will tell you that a project delivers outputs and a programme delivers outcomes.
That assumes that a project alone cannot deliver anything that is absorbed into the business and delivers an outcome, but let’s leave the debate about whether benefits can be included in project management to another day!
If you subscribe to the ‘projects can’t deliver outcomes’ school of thought you may need to squeeze in an additional column that describes whatever business change is required to turn the output into an actual benefit.
It’s worth noting this because people sometimes assume that if you deliver a new product, it will magically sell millions of units without any effort on behalf of anyone else, but you need the rest of the business lined up to support the benefit (sales) through educating staff on what the new product is, training the sales team, marketing efforts that span beyond the life of the project etc.
If your management team need a bit of help working this out for themselves, give them a headstart by being specific about the role that business change has to play in the delivery of benefits.
Next, add in the immediate benefits. These go in the third quarter of the page, off centre to the right. Add these into boxes and draw lines from the project outcomes to the correct benefits.
In practice, you’ll have to move the benefits around a bit on the page so you don’t end up with a mess of lines. It might take several attempts to get things in each virtual column in the right order so that the lines don’t cross each other in a big mess.
These are the quick wins, the obvious things. When you have completed your project, this is what you get for the business. Perhaps that’s more sales, better staff morale – it could be anything but it’s probably what you put in the original business case.
This is where you link the immediate project benefits to the longer term strategic objectives for the company. Create a set of boxes on the far right of the page with the relevant strategic objectives in. Don’t add on objectives where your project has no link. If you do that you’ll end up with floating boxes and nothing linking to them. This will only serve to make it look like you have forgotten something or that you aren’t delivering enough benefit. So make it easier on readers by only documenting the strategic benefits that you can justify linking to.
You should be able to draw a line between the immediate ‘business case’ benefit and a strategic corporate objective. If you can’t, it’s time to start wondering why you are doing the project in the first place.
And that’s it! You should have a single page with a number of boxes on, each box leading to another, until you reach the strategic objectives of the company. You can link what your project is doing to the corporate goals.
Now that’s a powerful communications tool.
I’ve been thinking a lot about benefits recently. It was the feature of a week of discussion questions in my Facebook group, and I’m leaning more and more towards benefits being something that the project manager has to get involved with. This idea that we deliver the outputs and then the permanent organisation magics up the benefits is feeling more and more like old style thinking.
So I was delighted to get a copy of Benefits Realization Management: Strategic Value from Portfolios, Programs and Projects, from Carlos Eduardo Martins Serra even though I was a bit daunted by the length of it.
I shouldn’t have worried.
Despite looking pretty boring on the outside (I was holding it with the title obscured and a colleague said he thought it looked like a modern-day book about religion), inside is hugely practical.
Every few pages it feels like there is a table or diagram succinctly explaining a concept. Here's my interpretation of how to close the value gap by using benefits to jump you to where you need to be.
There are templates galore when you get later in the book. There’s a giant appendix on how to use the guidance, which means that what you read about you can actually do something with. The whole thing has been designed to be intensely useful. The templates are repeated in another appendix (with chapter references) so you don’t have to keep flicking back and forward or marking the pages to find the one you want.
The book starts with the ‘strategic alignment’ angle that is so crucial to project management right now, but quickly moves into a discussion of project success and how value is created in the business. That’s all tied back to benefits.
Part 2 is where you start to get into the author’s model for the management of benefits. The Enterprise Benefits Realisation Management process is explained simply. I liked the fact that there is adequate focus on the people responsible for benefits realisation: for all I said at the beginning about project managers taking a more active role in benefits, I’m aware that we can’t (and shouldn’t) do it all.
Essentially this part is a flexible framework for translating business strategy drivers into benefits and then planning how to get them and making it happen. This is a huge part of project governance – we don’t do projects for fun, we do them to get the benefits!
The book also includes a couple of case studies: a few more might have been nice but to be honest I was reading it more interested in what I could do in my projects rather than much caring about what other people did. Your own context is always more valuable, I think, when the guidance is so clear about how to implement benefits realisation management that I was always thinking about what it meant for me.
The exception to that is the worked example in Appendix C which is a (fake) case study but it takes you through all the relevant templates as they would be completed for that organisation. This is helpful because you can see what is supposed to go into each section and plan what you are going to say for your projects.
Each chapter ends with review questions. I didn’t think these added much. If you are a student and want to check your understanding, great – do them. The answers are at the back so you can check your work. But if you are a professional, reading it because you want to do benefits realisation more effectively in your organisations, then I doubt you’ll spend much more time on these than a cursory glance as you turn the page.
In summary, I enjoyed it more than I expected and I think it will become a desk reference for me on how to manage project benefits. Recommended.
Benefits Realization Management is published by CRC Press.
Last month I looked at the 5 questions to ask during benefits identification, based on information from the latest PMI Pulse report into benefits realisation.
This month I want to look at what happens next. You’ve asked those questions and got some vague but helpful answers. How do you turn them into concrete documentation that explains the project’s benefits to everyone concerned?
Luckily, the Pulse report has the answers in the form of 5 activities to do which help you define your benefits.
I’ve listed them below, along with my interpretation of what this means and how you could potentially incorporate the tasks into your project plan.
1. Defining the objectives and critical success factors
This is the same as you would do for any project, so I don’t think that you’ll need any special help here. You should set the objectives for your project and make sure that you understand how success will be measured in the eyes of the stakeholders.
Schedule the work: Set up some workshops with the right people to ensure that everyone is on the same page about the project vision. Document it and refer to it often.
2. Recognising and quantifying business benefits
In 40% of projects, the Pulse report states that this responsibility falls to the functional area VP or Director who could realistically be acting as the sponsor. Now you know the overall objectives for the project you need to think about how these translate into benefits for the organisation. You also need to know how they are going to be measured, or in what way you could assess whether you have actually achieved the stated benefits.
Schedule the work: Talk to the person or group responsible for the identification of benefits and get their views on what these should be. Start a conversation with your team about how you could build in deliverables that make benefits tracking easier.
3. Developing meaningful metrics and key performance indicators to measure the actual delivery of benefits and planned benefits
Turn those measures into a dashboard or concrete, measurable output that means something to the team and the people who are looking at it.
Schedule the work: Create a work package or work breakdown structure entry that reflects the work you have to do in order to build a mechanism for developing the metric. This could be as easy as creating new report, or it might take a lot longer and a lot more thought. Make sure you know who will be using this report (or whatever) so that you can get them to test it, and schedule in the testing activity too.
Remember that in order to see and measure a change in result, you have to have a baseline. That will probably involve doing measurement of the current state of affairs e.g. cycle time, to see if it changes in line with your expectation for benefits once the project has completed.
4. Establishing processes for measuring progress against benefits plan
You’ve got your baseline and your way of tracking, but when are you going to see those benefits and how much are you expecting at any one time? You can also think about when you are going to stop measuring the benefits – for example, you could take the benefit in this financial year and then not track it next year, considering it a business-as-usual situation by then.
Define a process – weekly, monthly? As part of that, cover off who is going to be the process owner and who is doing the work.
Schedule the work: Make sure that you have clarity about who is going to do the measuring. If it’s your project team, add time and tasks to their workload to allow for this, along with a plan for how you are going to hand this over to someone else once the project completes.
You’ll need a benefits plan to track against, so write or get one of those.
5. Creating a communications plan necessary to record progress and report to stakeholders
I don’t think it is worth having a separate plan for this as you could find that some of your comms activities are then in conflict. It’s definitely worth including benefits messaging in your normal project comms work too, so that a much wider audience gets to hear about all the great results that your project is getting.
Schedule the work: Put benefits identification and realisation communication tasks in your normal communications plan.
Hopefully this gives you some idea of the kind of work that goes into identifying benefits. It’s not rocket science but it can be time-consuming, especially if you haven’t had much experience as a company of thinking in a benefits-led way before.
Take the time and do it right, and you’ll get much better project results overall!
Read the whole report here: http://www.pmi.org/learning/pulse.aspx