Benefits Management Approach – and its Application
Although an initial version (called the outline project business case) is created Pre-project within the starting up a project process, and the detailed business case contents are made within the initiating a project process where the business case is refined, the benefits management approach is not created until the detailed business case is created.
The benefits management approach works closely with the project business case within a PRINCE2 project. It defines how and when a regiment of the project benefits can be realized.
It is the activity ‘refine the business case’ used to create the detailed business case and write the benefits review plan.
Before the benefits management approach can be created, the business case should be reviewed, mainly to ensure that the benefits expected from the delivery of the project end-product are clearly stated. For this reason, the project product description and the acceptance criteria, in particular, should be used as input to creating the benefits management approach.
Benefits should only be claimed once it is clear that they have been realized, and so it is important here to clearly states how the realization of each benefit is to be measured. The exact metrics, as well as the method for measuring benefits, must be noted within the benefits review plan, and once agreed upon, these will form the current baseline measures of such benefits.
Where benefit reviews will be held throughout and after the project has closed must be clear. However, such reviews during the project likely coincide with each stage boundary.
If the project forms part of a programme, the benefits review plan will likely be created, maintained and executed at the programme level. In such a case, the senior user role on the project board will need to agree with this and take ownership of the benefits review plan for the remainder of the project life.
As the project proceeds through its various stages, one or more products are passed into the business-as-usual or operational areas of the customer’s organization. Such aspects are reviewed as part of Managing a Stage Boundary. In such a case, some benefits may be realized during the project’s life.
Another factor to consider is that as a result of project progress or otherwise, the expected benefits may need to change, either in the form of new or enhanced benefits or as a reduction or modification of existing benefits.
This should be done via the Change Control Management approach of PRINCE2. If such a situation arises, the benefits management approach should be updated to reflect this, and other documents should be examined to see if they also need updating.
Projects do not occur in a static environment; most deliver end products in a dynamic business environment. Industry changes, technological changes, financial situations at global, country, or organizational levels, or competitive forces influence this dynamic environment.
As a result of any or all of the three paragraphs above, the benefits review plan should be seen as a dynamic document updated and reviewed regularly. Again, this would often occur at each stage boundary.
So who should be responsible for identifying benefits within the benefits review plan in the first place? The answer is the senior user role, as it is their role that represents the needs and wishes of the user community.
Once the project has been completed and the project team is disbanded, the individual or individuals that filled the senior user role are held to account by corporate or programme management that the benefits laid down within the project business case and the benefits management approach are ultimately realized.
The benefits management approach is presented and reviewed by the executive of the project board during the initiation of a project process; it is updated at each stage boundary and is also updated and reviewed as part of the closing of a project process.
Benefits Management Approach composition
The benefits management approach should include the following sections:
Scope. This must be laid out exactly what benefits are to be measured. Remember that the benefits can be broadly categorized as anything that improves or minimizes a problem. Since these can give rise to an infinite category of benefits, so too must an endless variety of ways and methods to measure benefits within the benefits management approach.
Included within the business case and the benefits management approach are dis-benefits, which must also be measured. A dis-benefit can be any outcome perceived as a negative by one or more stakeholders and are an expected consequence of an activity.
Accountability. This should name who is accountable for the expected benefits, and such an individual may be the senior user or those who report to the role. It’s may, for example, by an operational manager.
Measurements. These clarify precisely how each benefit will be measured and when it can be measured.
Resources. For the realization of benefits to be acknowledged, some activity usually needs to be carried out to review their progress towards full realization. It is these resources (both human or otherwise) that should be documented here.
One of the sections within the business case is called timescale, and this covers not just the time frame of the project but also the period over which the benefits will be realized. The costs section of the business case also includes the ongoing operations and maintenance costs along with their funding arrangements in addition to the budget required for project funding.
The benefits management approach must remain harmonized with the business case throughout the project for the above two reasons.
Baseline. If a project is to bring about change and hence realize new benefits, measurements should be made of the ‘before the state’ so that acknowledgements of benefits can be made. This section of the benefits management approach must detail such measures and be recorded as a baseline reference.
Performance. This documents how the performance of the project product will be reviewed.
Before the benefits management approach is put before the project board executive for the first time, it should be reviewed for accuracy and completeness by project assurance.
In addition to the above sections within the benefits management approach, care should be taken to ensure that the work effort and costs to carry out the benefits reviews are realistic and that some form of cost-benefit analysis be undertaken to compare such costs to the expected benefits.
As part of the activity handover products’ during the closing of a project process, it should be confirmed that the project has delivered what was described in terms of the end product within the project product description document and, in particular, that the acceptance criteria have all been met.
At the same time, the benefits management approach should be checked to ensure that it is updated and includes any post-project activities that are required to confirm such benefits that have yet to be realized and cannot be measured until after the project’s products have been in the operational use for a while.
The benefits management approach is the only PRINCE2 management product usually used after project closure for the above reason. The project board should pass on the benefits management approach ownership, and corporate/programme management will ensure that the individuals that held the Senior User roles are accountable.
The benefits management approach
During the PRINCE2 initiation stage, the project manager will create the project initiation documentation. In addition, the project manager will be creating the benefits management approach.
The benefits management approach specifies how and when the project will be reviewed concerning whether it achieves the stated benefits.
It is usual for many of these reviews to be planned for some time after the project has finished; nevertheless, planning for these reviews should start at this point in the project.
Confirming the benefits
These activities are there to see if the benefits were achieved. It is natural for most of the benefits to be realized after the project is finished. However, there are circumstances when benefits happen before the end of the project.
The benefits management approach is used to plan a review of the benefits, and it contains a series of activities to see if the project benefits have been realized, as well as who is responsible for carrying out those activities and when those activities must occur.
The benefits management approach is first created during the PRINCE2 initiation stage and then updated with any new relevant information at the end of each delivery stage.
As part of closing a project, the benefits management approach gets updated to ensure that all of the post-project reviews of the benefits are included.
Benefits management approach roles
The senior user has a leading role in confirming the benefits and forms part of the project board that makes the major decisions within a project.
More than one person may fill the senior user role. However, they will all represent some form of use of the project’s products within the appropriate operational area.
For example, the senior user role may be represented by a manager from the marketing department, the product information department, or simply the users operating and using the project’s end product to realize the business benefits.
The project business case
The senior user role also has responsibilities concerning benefits. The senior user is there to forecast the project’s benefits and, ultimately, to demonstrate that the benefits have happened such that the benefits have been realized.
The executive of the PRINCE2 project board is responsible for managing benefit reviews during the project. Still, after the project has been completed, corporate or programme management is accountable for managing post-project benefits reviews.
The benefits management approach composition
The PRINCE2 benefits management approach plans the activities required to see whether the expected benefits from the project are realized and includes activities to see how the products have performed in their operational life.
The benefits management approach should contain the following information:
- Scope of the plan showing what benefits will be measured
- Who is accountable for the expected benefits
- How to measure expected benefits
- Went to measure expected benefits
- What resources are needed to review the benefits
- Baseline measures from which improvement can be calculated
- How to review the performance of the project’s products
Determining whether or not a benefit has occurred will often require specialist expertise, for example, using company accountants to calculate financial benefits such as profits and sales, human resources experts designing and employee surveys to measure subjective benefits such as increased morale objectively.
All of the above activities need to be scheduled within the benefits review plan, and care needs to be taken to ensure that such benefits were the direct result of the project’s end product and not some other cause.
For this reason, any pre-project benefits should be first measured and used as a baseline against which to calculate and identify project-related benefits.
The project manager and the project board executive must also plan how to review the operation of the project products so that it can be understood exactly how they contributed to the realize Asian of additional benefits.
The controlling a stage process
The last activity within the controlling a stage process is called ‘review stage status’, and it is here in which the project manager reviews the whole situation of the stage and then decides what to do next.
One of the most important activities the project manager does at the end of each stage is to review the benefits management approach to check whether or not any benefit reviews are now due. Most projects related benefits usually occur after the project has finished.
However, in some projects, benefits might be realized during the project’s timeframe, so the project manager should ensure that these benefit reviews are executed.
For this reason, the project manager and the project board executive should review the benefits management approach to check that it has been updated with the result of any benefit reviews that took place during this stage and compare these results with the expected results. They should also ensure that any new plan benefit reviews and project plans are in the stage.
The closing of a project process
The project manager reviews the benefits management approach to ensure that post-project benefit reviews have been planned. As well as reviewing the benefits derived directly from the products, these reviews should also focus on how they performed in their operational life.
The end project report
This focuses on the project’s performance against planned time, cost, quality, scope, benefits, and risk targets. Only some of the benefits might likely have been achieved since many benefits occur after completing the project.
However, so that this can be done is essential to review any benefits that have occurred during the project and to ensure that post-project benefit reviews are described in the benefits management approach.
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