Why Benefits Realisation is not Return on Investment!

Why defining ‘benefits realisation’ through ‘investments’ does real damage:

Benefits Realisation is a new concept, having only come about in the last decade or so. As such its application and definition are not yet mature. It is applicable to all aspects of public and private sector activity where any form of change is being sought that is intended to achieve some form of advantage (or benefit) for the key stakeholders of that organisation.  In the private sector, Return on Investment (ROI) (¹) is often a key interest – in the public sector, efficiency and improvements in service delivery are usually key.  In the following example, ROI driven benefits realisation is very likely to lead to a poor understanding and application of this topic, as the remainder of this post shows.

Why is this important?

  • When involved in any kind of change, especially involving considerable numbers of people, language is one of the most important elements. Incorrect use of language can have very damaging consequences.
  • People do not find this task easy (²) – if we confuse the fundamentals, we make the job much harder.

A real example of major change and benefits

To demonstrate this point, we are going to use the Healthcare sector and in particular the publicly funded (and free at the point of use) NHS in the UK.  In 2013/14 NHS England had an annual budget of £95.6 Billion, to provide Healthcare for the whole population of England (Scotland, Wales and Northern Ireland all have their own budgets).  To provide an example by scale, the UK NHS is among the top 5 employers (in terms of numbers) of people in the world.

For many years, the NHS has been trying to modernise and improve its services to patients.  It has come under increasing scrutiny, for example due to waiting times for medical procedures and other factors.

In this scenario, everyone in the UK is a stakeholder of the NHS.  Even all those with private medical insurance or the means to pay directly for private (elected) medical care are still stakeholders, as the NHS is usually the provider of medical care in emergencies.  As stakeholders, everyone hopes that if the need arises, we will receive the best medical care available. One would hope that the UK population are seen as the most important stakeholder in relation to the NHS.  The population of the UK also funds the NHS through taxation.

Benefits to its key stakeholders

In the case of the NHS, the key interests of its primary stakeholders (its patients) are:

  • the speed of availability of care (i.e. waiting times for procedures etc.),
  • the way it is delivered, and
  • the medical outcomes that are achieved.

In recent years, there have been many initiatives to improve patient services and address efficiency issues, at both local and national levels.  Clearly, the majority of these initiatives are expected to deliver benefits.  There is a huge question though, in the circumstances of the NHS and all similar organisations, if proposed changes are to be judged worthwhile or otherwise, primarily on an ROI basis.

All proposed (major) changes in the NHS are expected to produce a Business Case.  Nothing wrong with that at all.  Increasingly, those Business Cases are expected to contain a clear statement of the benefits that will be delivered, along with the measures to be used to demonstrate the achievement of those benefits.  It does not take much imagination to guess that the benefits the NHS’s key stakeholders are most interested in, often have little to do with ROI. They all relate to NHS service delivery to its patients.

For example, the NHS uses the expression ‘patient journey’, when describing the route any patient will go through (for common conditions), from their first consultation with their Doctor, through to referrals, tests, investigations etc and finally to treatment.  For many non-urgent conditions, this can be months. One constant aim of the NHS in recent years has been to reduce average patient journey times, through changes in working practice and other means. Where successful, this can be hugely valuable to patients, and can also have a positive impact on medical outcomes.  Clearly, any such change will be considered a major benefit by patients. Sometimes, these can even be achieved with little or even close to zero investment. They will always, however, require some form of change within the NHS.

Impact of only using investment-driven criteria

Therefore, if the NHS applies UK APM’s financially focused definition of a benefit (¹), how would that affect their efforts around benefits realisation?  This definition is wrong, should be ignored and hopefully one day all such definitions will be abandoned. Either that or the definition seemingly implies that Benefits Realisation is not applicable to the NHS and similar organisations.

Defining benefits primarily through investment-driven criteria is simply far too narrow and hence 100% wrong.  Our other post on this topic provides further evidence of this.

Lessons learned from hundreds of projects:


  • Note 1: From APM’s definition of PM related terms, “Benefit: The quantifiable and measurable improvement resulting from the completion of deliverables that is perceived as positive by a stakeholder. It will normally have a tangible value, expressed in monetary terms that will justify the investment.”
  • Note 2: Since 2005, we have seen and analysed the actual benefits relation plans (using real projects from their business) of well over one hundred project teams, in workshops and training courses.  This demonstrates very consistently that maturity around this topic is very low, and that people (project teams and stakeholders) do not find this something that is easy to do. Click on the above video for more information.

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