Project Management

The Money Files

A blog that looks at all aspects of project and program finances from budgets, estimating and accounting to getting a pay rise and managing contracts. Written by Elizabeth Harrin from

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Recent Posts

The Evolving Landscape of Benefits Realisation

5 Challenges of Integrating Sustainability into Project Plans

Challenges that arise from implementing alternative metrics

Stakeholders: how to improve engagement

How to reduce your project’s carbon footprint


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Benefits Management: How do you do it?

benefits management

I’m working with organisations who are putting a lot of thought into benefit management at the moment – more thought than I’ve ever seen in past years. I know benefits management has always been something to consider on projects, but how many project/leaders/organisations actually truly do it?

I’m sure the larger projects are geared up for benefits tracking, but smaller initiatives? Those that might only deliver a few thousand pounds/dollars of benefit per year? Are those being tracked?

I think the trend is changing, and I think there is more focus on benefits tracking, particularly in programmes. Where there is a large programme of work, even small projects get to contribute.

So how do you do it?

The first step is to work out what benefits your project is going to deliver. For example, that could be:

  • Cost saving
  • Increased sales/revenue

In fact, benefits could be lots of things (shorter cycle times, more calls answered, higher customer satisfaction) but most often they can be reduced to money. Shorter cycle times should mean more projects delivered in a year, so more value achieved, or more widgets through the process, so more sales. More calls answered should convert to more sales, so more cash. Higher customer satisfaction results in more repeat purchases and more testimonials that drive new buyers, so more cash.

Even carbon savings and sustainability targets can often be represented as financial benefits. Carbon has a financial figure associated with it, so you can translate carbon reduction into money.

The trouble comes with trying to get stakeholders to agree on how these benefits will be calculated.

More calls in, for example, might not translate to more sales for several months, depending on your business timeframes and processes. You will need some rules and assumptions around how benefit numbers are going to be worked out where the maths is not straightforward.

For example: if we outsource a service, we can reduce headcount in function and probably make a saving on the cost to serve (budgets are part of the outsourcing decision, after all). That’s a straightforward cash saving: those individuals are no longer on our payroll (even if they were moved across to the outsourced party – the UK has TUPE rules for this).

But do we count that saving as a ‘pure’ saving, or do we have to take off the cost of buying the outsourced service? How long can we claim the service for before it becomes BAU? What happens when we need to add a head or two back in, where do those costs go?

We need assumptions to make benefit calculations work, like what’s the average cost of a sale (so if we answer more calls we should convert x% and make y% extra money as a result).

This first step of creating a model on which to base benefit calculations is the hardest part, in my opinion. There are experts to consult, finances teams to engage, data to gather so we have something to use as the baseline, and lots of maths and spreadsheets to test out so we can model what the benefits might look like.

Getting agreement on how the benefits will be worked out is hard. You need everyone to agree, and more importantly, to understand how it all goes together so they can repeatedly work out the benefit using the same calculation, month after month for as long as you decided to track it for.

That’s no small undertaking, especially for organisations starting out. Especially as many projects have multiple strands and multiple things contribute to the benefits.

What’s the journey like for benefits tracking in your organisation? Let us know in the comments what the biggest challenge is for you – I’m interested to see if you agree with me that it’s the setting up and creating the assumptions and rules for calculation, or whether there is something else that is the hard part.

Posted on: December 18, 2023 08:00 AM | Permalink | Comments (8)

4 ways to define value

define value

The PMBOK® Guide – Seventh Edition talks about four different ways to define business value.

‘Value’ is quite a vague term when it’s used in everyday speech, so I think it’s useful to have something to hang a definition on when we’re using the term in project management.

The Guide does specify that there are lots of aspects to value, including non-financial considerations, and that the four ways that are listed are only some of the ways that you could measure value. However, they are a good starting point if you’re trying to have conversations with execs about what projects you should work on – you do need some kind of idea of what value means.

Here are the four metrics that you can use to measure value, as outlined in the PMBOK® Guide.

1. Cost benefit ratio

This ration works out the present value of the investment compared to the initial cost, basically, do the costs outweigh the benefits (if they do, you probably shouldn’t start the project unless there is a strong justification for doing so in the knowledge that it will cost you more to deliver than the benefit expected).

2. Planned benefits compared to actual benefits

This is a bit of a weird one if you ask me – until you start delivering, you don’t have any actual benefits to compare to. It’s fine if you want to review value after the project is complete or while it is in progress, but it’s not a metric you could use for project selection.

You’d have to use the planned benefits, and that really is the planned value of the work to the organisation – so it’s just a different way of talking about the other metrics until you have some actuals.

3. Return on investment

This is my favourite of the four (is it odd to have a favourite value metric?). Probably because I use it the most and it’s very clear on what it is. It’s easy to explain to stakeholders and finance teams seem to like it.

Plus it’s easy to work out.

ROI is the financial return compared to the cost, so it’s helpful in project selection. However, you can use it throughout the project to refer back to whether or not you are on target to hit that particular ROI – useful to do when your costs are going up.

4. Net present value

NPV used to confuse me because it’s time-phased, but once you get your head around it, it’s straightforward. It’s a very common metric in use for project selection so it’s definitely worth taking the time to understand how it is put together and what it means.

You can measure NPV throughout the project and check that the investment still holds up.

With all of these, as long as you keep measuring if you are getting enough value out of the project, you can make an ongoing commitment to keep the work going. If the numbers point to a trend of decreasing value, there is likely to be a point where you’ll want to stop the work, because the amount of effort expended isn’t worth the value you’ll get at the end of it.

Of course, there are some projects where the value is simply being able to continue to trade or operate within a legal framework, or benefit related to social/corporate responsibility or sustainability, so you might find it irrelevant to track metrics like the ones above. The takeaway from all this is to work out what ‘value’ looks like to your team and your project, and measure that.

How do you do it? Let me know in the comments!

Posted on: September 19, 2023 08:00 AM | Permalink | Comments (5)

5 Ways to Improve your Budget Situation

I’m lucky in that the projects I am working on at the moment have a requirement for resource time, but we can manage the work in-house so we don’t need to invest in anything else. However, in the past I have managed projects with substantial budgets – and also those with small budgets.

Personally, I think that managing smaller budgets is harder because there is less wiggle room to lose a small amount in the rounding, but we have to work with what we have.

When something on your project changes and your budget is reduced, you might have to look at creative ways to make the money go further. Here are some suggestions.


Find angel investors/donors

OK, let’s get this one out the way first! I got this example for the Project Management For Musicians book by Jonathan Feist, and it’s clear that it won’t work for all kinds of projects. I couldn’t run an SAP deployment by finding a lovely benefactor who just happened to want to sponsor an ERP implementation from the goodness of their heart.

But if your project is to run an event, stage a show, or something similar, perhaps this is an option for you. For example, if a benefactor donated a certain amount, they could get a free ticket to the gig.

I’m sure much of the world of PR and event management taps into this option all the time. If you do go down this route, just be sure to make sure whatever you do falls within the ethics guidelines of your organisation as you don’t want to be seen as taking or giving bribes or hospitality gifts that could get you and your company into trouble.

I’m including this one really as a prompt to ask you to think creatively about the situation you are in and what might address it.

Do less: reduce the scope

The classic way to save money on a project is to do less. Look for chunks of the project that could be pushed into a Phase 2 or subsequent initiative.

Typically, if you remove scope, you are also removing cost because the work takes less resource to get done. Analyse what could be removed to save money but would have minimal impact on the end result. There probably isn’t much that falls into this category, but there might be something.

Do different: change the scope

Another common way to reduce spend on a project is to look at changing the scope to deliver the goals in a different way. What about these switches:

  • Skip an expensive live in-person launch for a virtual tour
  • Replace classroom training with video walkthroughs and online help
  • Use a train-the-trainer model instead of asking the software vendor to train all employees.

What else could you switch? Let me know in the comments.

Change vendors

If your project involves buying in goods or services, you could also consider changing those providers. Perhaps another vendor would be cheaper, especially if you looked further afield.

Depending on the work, changing vendors could be more expensive, especially in the short-term. Pulling experienced contractors who know your business off a project and replacing them with remote contractors will have a learning curve, even if the skillsets of the two consulting firms are identical. Factor that in before you make any proposals.

Alternatively, consider the cost of bringing the work in-house. Would it be cheaper to hire someone on a fixed term contract than it would to get a supplier to do the work?

Bring benefits forward

Another option would be to look at how the project could be reordered to bring in some benefits earlier. For example, with a product launch, could you get a beta version out early to start bringing in some income that could be offset against future improvements.

If the deliverables can start bringing in some cash, that could change the financing of the work and improve the budget situation on paper, which might free up resources or investment for the next wave of development.

These are just ideas, and I hope you don’t have to use them!

Posted on: May 10, 2023 08:00 AM | Permalink | Comments (7)

Why do we bother with business cases?

Project documents (and there are some good templates here on are important to keeping projects moving, and many times, a project will start with a business case.

You might accept the need to do a business case as part of the organisational process – just something you have to do to tick a box. Maybe your organisation doesn’t use them in a formal sense, but each project has to be justified in some way – whether that’s a slide deck or even an email. There is some ‘reason to work’ that kicks off a project.

But have you ever really stopped to think about what role a business case really plays? If you do them, I think we shouldn’t take them for granted. If you don’t do them, it’s time to start.

Here are a few reasons why it is advantageous to have a business case before the work begins.

Understand the scope

The process of putting together a business case helps everyone involved understand what the scope is going to be. And if they don’t like what that looks like, they have the opportunity to influence it early so the scope better aligns with the direction they want to take.

Understand the issues

Perhaps there are concerns, issues, risks or challenges that decision makers need to be aware of – there always are. The discussions that feed into the business case help make sure that everyone is aware of what those are and what implications they might have for the work.

Fact-based decision making will give the project a better chance of success. The leadership team can weed out the ideas that won’t work before any time and effort is spent on them.

We can frame this conversation by thinking about project viability. Having a thorough discussion of the issues makes people aware of whether a project is viable and will continue to be viable throughout the delivery phases, despite any challenges that may arise.

business case

Understand progress

Finally, a good business case lays out information that is useful for managing the work, monitoring and controlling progress. For example, a schedule of stage payments or key milestones, scope elements or deliverables.

The business case isn’t the project schedule and you will need more than simply the business case, but if it is a well-thought through, well-prepared document, there will be enough in there to help set up adequate project tracking.

The document should also set out success criteria and/or benefits which give you the framework for evaluating success as the project progresses.

As a project manager, you might be thinking that putting together the business case is not really your job, and you’d be right. However, on the projects I have worked on, it’s always been easier to get up to speed and start work when I’ve been involved from the business case stage or earlier.

That doesn’t mean doing loads of work – just being interested and talked to and maybe asked an opinion about the resource information or timeline that should go into the document.

Then when I come to lead the work (assuming it gets approved), I have a better understanding of the ‘why’ behind the project and the decisions that have already been taken.

Do you have a business case template that you are happy with? If not, check out some of the templates on this site as a starting point, and adapt one to give you the information you need to start your projects from a good place.

Posted on: May 02, 2023 08:00 AM | Permalink | Comments (1)

The Benefits Management Process [Video]

Categories: benefits

benefits management process

In this video I explain the six steps for managing the benefits realisation process on your project.

They are:

  • Create your benefits management strategy
  • Identify benefits and tie them back to project/programme objectives
  • Plan when benefits will appear
  • Realise the benefits
  • Conduct a benefit review
  • Identify new benefits and tweak existing benefits

There’s more detail on each of those steps in the video, but if you prefer to read the highlights, you can find a text overview here:

Pin for later reading

benefits management

Posted on: December 02, 2020 08:00 AM | Permalink | Comments (5)

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