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Benefits Realisation - a hugely valuable process:

What is Benefits Realisation?

It is the definition, planning, structuring and actual realisation of the benefits of a business change or business improvement project. Despite vast sums being spent on projects, many organisations don’t do most of what follows. It is also the most valuable thing you can do when delivering any kind of change, or are involved in significant investment that includes anything of a project (or product) nature.

What is benefits realisation?

Why is it necessary?

Businesses undertake projects and change programmes to deliver benefits, however, they are frequently criticised for failing to achieve them. Studies show that over 70% of business improvement projects fail to deliver their expected benefits and even when they are achieved in part, often they are far from fully realised.

Lessons learned from hundreds of projects

In 2018 we produced a presentation on the lessons learned from hundreds of real projects which can be seen here. It provides real evidence of why it is necessary.

Why do projects fail to deliver benefits so often?

The reasons for this are varied, but a great deal is due to:

  • Business Cases focused only on target savings, instead of expressing business benefits in a manner that can be clearly understood and implemented.
  • Despite people believing that they do, Business Cases not actually containing specific benefits at all.
  • Poor definition of the business goals of projects.
  • Too much emphasis on deliverables, or capabilities, which on their own do not result in specific benefits.
  • No mechanisms or in particular structures being in place to manage their realisation.

Projects are often considered finished when their deliverables are complete. However, the benefits of a project are typically realised over time. This may leave no one responsible during the realisation phase and often no structure through which to manage this key phase. For benefits realisation to work it is crucial to identify clear benefits (early in the change life-cycle) and to assign ownership to those responsible for planning and managing their achievement.

So what does it bring that is new?

The single most important thing it produces is the ability to test every single project against the current strategic objectives of the business.

Additionally, the central goal of the process is to bring structure, accountability, complete clarity and discipline to the definition and delivery of the benefits in business projects, which forms a large part of the responsibility of sponsors. It is therefore a key aspect of programme management and relates to other business processes, such as portfolio management and must start in the earliest stages of the change/project cycle (well before sign off of a full Business Case). Effective realisation planning enables organisations to maximise the potential results from the change or investment. It must also identify and manage the changes that will be required to maximise the planned benefits. These changes themselves may well need to be managed carefully as part of a change management programme.

Benefits realisation process

What does it bring of most value?

It provides the means to validate that proposed projects and programmes will deliver real outcomes that specifically support strategic objectives and provide the data that is normally absent to manage this and drive decision-making in other processes such as portfolio management.

Even more importantly, once staff have seen it in practice, the success of change efforts will rise in leaps, literally.

When implemented consistently, it provides a highly practical ‘framework’ for ensuring real results from Business Improvement and Change programmes.

What is fundamental to improving it (and key lessons learned)?

The most obvious thing to say is that experience shows that organisations do not find this task easy at all. Large-scale evidence suggest that businesses are not rich in track record or skills in managing this process in a formal way.

What are the things that typically have to improve most?

  • Staff involved must understand what constitutes a real benefit in any specific business (versus general outcomes or target savings for example) and the difference between benefits, objectives, and their end financial results.
  • The way they are expressed and structured in business cases needs to be simplified and made far clearer (this is fundamental to success).  We call this the one-page business case.
  • Accountability (following project delivery) during the realisation phase must be defined and formalised.
  • The ‘realisation’ phase must be actively managed, using the contents of the realisation plan.

The Benefits Realisation Framework

In order to make expectations around this process clear it is useful to define a framework for your business.  The framework must be driven by the organisation’s strategic planning process. To be effective, it needs to become a standard practice throughout the business change lifecycle – especially during programme and project definition.

The first step is to establish a framework that defines how benefits should be identified, structured, planned and realised. The framework should classify types of benefits of value to your business, and constantly reflect the organisation’s current strategic goals and objectives, for example:

  • process / quality/ productivity / improvements
  • cost avoidance / reduction / efficiency
  • customer service levels / error rates / rework rates
  • revenue generation / customer retention rates / customer growth rates

Once they have been identified, analysed and structured, the next task is to create a realisation plan. This should also enable the organisation to identify the actions required to support and execute that plan.

Benefits Focused Business Cases – the “one page (Agile) Business Case”

A business case should set out the basis of an investment or change. Business cases must show the value that the owning organisation will achieve by the proposition in the business case, by identifying specific benefits that will be achieved. This is very different from simply having summary statements about planned or targeted financial savings that might be achieved. Traditionally, many business cases go no further than identifying outcomes of potential interest to stakeholders (such as capabilities), with little or no identification of specific improvements that will be delivered. This is a very common issue. It is no surprise that in many of these examples, few measurable improvements are achieved, or sometimes the reality is even far worse.

The core of any business case should never require volumes of text, and should be summarised (preferably on one page) using simple language using the following structure:

Delivering Strategic Goals and Objectives

Most organisations have current strategic goals and objectives and they must be central to benefits identification and planning. Following this, every proposed business case must be evaluated thoroughly to ensure that it will make real contribution towards strategic goals. During the realisation phase, the realisation plan(s) provide a control mechanism to provide continual feedback against progress towards strategic goals, through the measures in the realisation plan.

Benefits Realisation Structure

Maintaining the Focus

During the life of a project it may be necessary to modify the objectives, change priorities or redefine the desired outcomes in light of changing circumstances. It is important that this process continues through and beyond the life of the project and beyond, to ensure that the benefits of most value are realised at an affordable cost and on schedule.

Ownership and Implementation of the Benefits Realisation Plan

Many of the anticipated benefits will not start to materialise until after the project has been delivered. It is therefore essential that the ownership of the realisation plan is maintained beyond project delivery through to complete realisation. The process should also include a post-implementation review, allowing time for analysis and a proper evaluation against the original business case.

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