Benefits Realisation
80% of CEOs are disappointed in the ROI following major change initiatives.
Organisations that invest in long-term projects, especially for complex IT systems, want maximum returns on their investment, hence the importance of realising benefits. But changes to strategic, competitive and operational landscapes during the life of a project mean the final picture rarely matches the vision. Organisations themselves will change.
Much time and effort is then spent trying to justify the investment and achieve the anticipated benefits. Fulfilling these is costly and sometimes outdated. Moreover, they often become the responsibility of operational teams, leading to friction between them and project management.
Evolved by Leadent, Real Benefits Management (RBM) takes account of all changes that have occurred since project planning. The three RBM stages ensure understanding of direction, clarity of focus and delivery of all potential benefits.
RBM gives a consistently clear picture at every project stage but, rather than concentrating on project milestones, it sharpens strategic focus on achieving real operational benefits.
Stage 1 - Creating Direction
We accept that project direction will inevitably hinge on justifying the decision to invest. However, all changes skew that direction, often leaving project teams trying vainly to achieve planned benefits and ignoring real advantages that could accrue to the business. RBM stipulates that business cases should not be set in stone – they should be active not static documents. They can be updated, remain practical and relevant, so they are always current yardsticks for managing the realisation of benefits. They need flexibility in preparation, so they can be used throughout the project lifecycle. What is the case for investment? What benefits should arise? RBM’s flexible, pragmatic business cases provide:
- Frameworks for project teams to maximise benefits from investment
- Foundations upon which to maintain project focus
- Clarity to inform project sponsors and support ‘in-flight’ decision-making
- Practical focus on achieving actual benefits within a changing environment
Stage 2 - Confirming Ongoing Focus
The crucial component of RBM is confirming focus, spotting the gap between the anticipated and the actual benefits. We continually check the vision against reality – what new benefits have arisen, and which have disappeared? It is a clear, pragmatic analysis of:
- The original business case
- Benefits from other initiatives
- Benefits based on final scope
- Potential new and optimised benefits
- Changes in the business environment
The planned business benefits will erode, disappear or even be superseded over the life of a project, making delivery and realisation at best confused and at worst unattainable. Regular confirmation of focus will:
- Determine the impact of strategy on the benefits case
- Track changes to the business landscape that affect anticipated benefits
- Identify possible duplication of benefits from preceding initiatives
- Develop new potential from identified changes
- Inform key sponsors of actual against anticipated benefits
- Set the benefits baseline for monitoring future business performance
- Give a realistic view of the actual benefits and plan for delivery
- Prepare the business for benefits delivery
Our experience has shown that understanding real project benefits is an integral part of the preparation phase for implementation. It is also a critical success factor in all projects.
Stage 3 - Delivering Results
Finally, delivery is critical to success. In many cases this is left to operational management to plan and execute, often leading to underperformance due to their isolation from the project team. Consequently the business doesn’t understand the project (and vice versa) and the independence of the two organisations and their differing objectives leads to failure at this critical stage. If the investment case is to ‘stack up’, both project and operational management must have a clear understanding of the benefits and delivery timeframe. Without careful handling, this pivotal part of the transition can create frustration and confusion. What are the real benefits? How can we deliver them? How can we use the revised baseline as a yardstick for measuring our operations? RBM answers these conundrums to give you the following advantages:
- Delivery based on real not perceived benefits
- Potential to optimise new benefits
- Planned execution of benefits
- Integrated KPIs with operational plans
- Planned transition from project to business
- Informed business sponsors and operational managers
Real Benefits Management (RBM) ensures your projects deliver competitive advantage for your organisation – reaching beyond the current thinking of benefits realisation. It achieves this by constantly reassessing potential benefits during the life of the project, adapting them to meet the changing world and making sure they retain relevance to updated business needs.
Leadent is one of the UK’s fastest growing consultancy businesses and is at the forefront of the consulting revolution. We deliver real value that can be measured on every engagement. Our team has the right blend of consultancy, training and line management experience, which has already made a difference to our clients.
To find out more about how RBM can help your organisation improve the way you manage your projects, call us on +44 (0)8707 664 884, or email us at info@leadent.com.