PRINCE2 7 Benefits Management
PRINCE2 7 Benefits Management: The Keystone to Project Success
Welcome to the world of PRINCE2 Benefits Management! As someone with foundational knowledge, it’s crucial to understand how PRINCE2 integrates benefits management into its framework and why this becomes necessary for successful project management.
Understanding PRINCE2 7 Benefits Management
First, let’s define what we mean by benefits. In the PRINCE2 context, benefits are the measurable improvements resulting from an outcome perceived as an advantage by one or more stakeholders. Benefits management, thus, ensures these improvements get realized.
PRINCE2 doesn’t treat benefits management as a silo. Instead, it weaves benefits management through its processes, themes, and principles. It’s not just about completing a project on time or within budget but ensuring it delivers the intended benefits.
The Significance in Project Management
The ultimate goal of any project isn’t just to “do things right” but to “do the right things.” That’s where benefits management enters the picture. It ensures we align projects with the organization’s strategic objectives.
Consider this: You can flawlessly execute a project without value to stakeholders. While the execution was perfect, the project could have been a better effort with tangible benefits.
Real-World Application of PRINCE2 7 Benefits Management
To get a complete picture and ensure the business case is complete and realistic, it should include dis-benefits. These are a measurable decline resulting from an outcome perceived as negative by one or more stakeholders, which reduces one of more of the organizational objectives.
The idea here is to capture and sum both benefits and disbenefits so that the business case (and the benefits management approach), represent an achievable and realistic benefit picture when held again the project time, costs, and risks.
Imagine a company decides to invest in a new IT system. They anticipate that the new system will streamline operations, reduce errors, and increase sales. Here’s how PRINCE2 benefits management comes into play:
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- Identify: The project team identifies these anticipated benefits in early development of an outline business case.
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- Define: They then articulate these benefits clearly, making them measurable. Instead of vaguely saying “increase sales,” they specify “increase sales by 10% over the next year.” Here, the project product description with its acceptance criteria aids this definition along with suitable realization timing.
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- Model: The team models the cause-and-effect relationship. How exactly will the new IT system lead to increased sales? What intermediate outcomes should they expect?
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- Plan: This involves laying out the steps to realize, monitor, and measure the benefits. It’s a roadmap of what needs to happen post-project to ensure the benefits materialize.
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- Realize: Post-project, the organization actively works towards achieving these benefits, which might involve training staff on the new system, marketing it to clients, or other activities.
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- Review: Periodically, stakeholders review if the benefits materialize as expected. If sales aren’t increasing, they dig deeper to understand why.
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- Refine: Based on these reviews, the organization refines its approach. They may need more training or different marketing strategies.
The Consequences of Neglecting Benefits Management
Neglecting any phase of benefits management can spell disaster. Take the company example above. They only vaguely defined benefits, and there was no plan to realize them. The result? They have a shiny new IT system a year later, but sales and operations have remained the same.
This lack of clarity and focus can seriously diminish the return on investment and even make the project seem like a failure.
PRINCE2 7’s Deep Dive into Benefits Management Planning and Delivery
PRINCE2 7 provides a systematic way to integrate benefits management:
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- Incorporate in the Business Case: The Business Case theme in PRINCE2 mandates a clear identification of benefits, making it the bedrock on which projects get justified.
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- Progressive Elaboration: As the project progresses and more becomes known, PRINCE2 suggests refining the benefits, ensuring a realistic and achievable view of benefits throughout the project lifecycle.
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- Designate a Benefits Owner: PRINCE2 recommends having a dedicated individual or team responsible for realizing benefits, usually from the user community (Senior User). This ensures someone always has an eye on the prize, even post-project.
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- Regularly Review Benefits: As part of its ‘Continual Justification’ principle, PRINCE2 promotes regular reviews of the project’s benefits, not just at the end but throughout the project lifecycle.
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- Post-Project Evaluation: Once the project concludes, PRINCE2 doesn’t stop. A post-project benefits review ensures that the project delivers on its promise and that lessons learned get documented for future endeavours.
Now, let’s dive deep into its integration within PRINCE2 processes and how the Benefits Management Approach document plays a pivotal role.
PRINCE2 7 Processes and Benefits Management
PRINCE2 structures each project into transparent processes, each with specific activities. Benefits management permeates these processes to ensure the project stays aligned with desired outcomes.
Starting up a Project (SU):
The project manager will define and draft the project brief. We can outline the benefits the project aims to deliver at this early point in the project. It’s the first draft of the Benefits Management Approach document.
Initiating a Project (IP)
The project manager develops the Project Initiation Documentation (PID).
The Benefits Management Approach gets refined and updated. This document defines the benefits, lays out the metrics to measure them, and plans how and when to review them. This becomes part of the PID and ensures stakeholders know the project’s intended benefits.
Directing a Project (DP):
They use Directing a Project (DP) Activity when authorizing project stages and providing give ongoing direction. In the “Authorize a stage or exception plan” activity, the Project Board reviews and approves the updated benefits defined in the Benefits Management Approach document. This ensures the board measures, examines and reviews any benefits they plan to realize in the following management stage.
This ensures that any benefits planned to be realized in the following management stage will be measured and reviewed. The Project Board ensures that the project remains aligned with the organization’s objectives.
Controlling a Stage (CS):
Monitoring and reporting on stage progress. Benefits Management: While this process focuses on managing the current stage daily, the team logs any deviations or risks that might impact the benefits. This ensures timely corrective action.
Managing Product Delivery (MP):
Delivering work packages. Benefits Management: As deliverables get produced, the team should always keep the defined benefits in mind, ensuring that the outputs align with the intended benefits.
Managing a Stage Boundary (SB):
Plan the next stage and review the current management stage. Benefits Management: This is a crucial time to revisit the Benefits Management Approach. Is the project still on track to deliver the anticipated benefits? If not, why, and what adjustments are needed? While the project may be over, the benefits realization process continues.
Closing a Project (CP):
The main activity here is to formalize project closure. Concerning Benefits Management, this will finalize the post-project benefits management approach. While the project may be over, the benefits realization process continues.
Benefits Reviews: During Project and Post-Project
Benefits Reviews are structured sessions where stakeholders evaluate whether the benefits, as outlined in the Benefits Management Approach, are being or have been realized.
During the Project:
Purpose: To monitor if the project remains aligned with its intended benefits.
Frequency: Conducted at critical junctures, especially during the Managing a Stage Boundary process.
Outcome: The team initiates corrective measures if they perceive the project as misaligned. They re-evaluate the project’s viability if they believe the anticipated benefits are unachievable.
Post-Project:
Purpose: To verify if the project has delivered its intended benefits.
Frequency: The team conducts reviews periodically until they fully realize all benefits, which might be months or years after the project.
Outcome: They determine if the benefits have materialized as expected. If they still need to, they gather insights on why and how future projects can improve.
Sections Within the Benefits Management Approach Document
Purpose: The Benefits Management Approach defines the benefits management actions and benefits reviews that will be established to ensure that the project’s outcomes are achieved and to confirm that the project’s benefits are realized
Scope: describes what benefits are to be managed and measured
Benefits realization procedures: describes what management actions are required to ensure
that the project’s outcomes are achieved (This should include arrangements for benefits realization
activities to be undertaken by the business layer after the project has closed. For example, preparing
and handing over a benefits realization plan.)
Benefits measurement: describes how to measure achievement of expected benefits, when they
can be measured, and the baseline measures from which the improvements will be calculated
Benefits tolerance guidance: Provides additional guidance to the benefits tolerance levels defined
for the project in the business case
Product performance: describes how the performance of the project product will be reviewed
Responsibilities: defines the responsibilities for business case activities, including who is accountable for the expected benefits
Resources: for the benefit management activities, for example, to undertake studies
Supporting tools and techniques: for the benefit management activities, for example, use of a simulator
Standards: any standards which apply to benefit measures
References: for any associated documents or products.
Benefits Management Approach – Baseline Measurement
Arguably, this is the first and most crucial activity. It describes the operation areas’ “before state” (Business As Usual) that the project will deliver. These are baseline measures for calculating the improvements (realized benefits).
Benefits management Approach scope: This defines all benefits that are to be managed and measured during and after the project
Benefits management Approach Roles: This defines who is accountable for the expected benefits from original identification to final realization. These benefit owners are the individuals or groups responsible for realizing specific benefits. These owners ensure that their respective benefits get achieved and measured post-project.
Benefits Management Approach Activities: This approach details the necessary management actions to achieve the project’s outcomes. It also provides a timeline for when they expect to realize each benefit, both during and after the project.
Any external factors or other projects that might impact the realization of benefits. Potential challenges or risks that might hinder benefit realization and strategies to mitigate them.
Benefits Management Approach Resources: This describes what resources are needed
Benefits Management Approach Measurements: This defines and describes how to measure the achievement of each expected benefit and when each can be measured.
The measurement criteria must be clear, tangible metrics to evaluate the benefits. For example, if a benefit is ‘improved customer satisfaction’, the measurement criteria is a ’10 % increase in positive customer feedback’.
Benefits Management Approach – benefit reviews: This section describes how the performance of the project’s product will be reviewed. It is a detailed plan of when benefits will be reviewed and who will review the performance of the project’s products and outcomes, ensuring periodic checks on benefit realization.
Comparison: Benefit Management Approach vs. Benefits Realisation Plan
While the overarching aim of both documents is similar—to ensure projects yield tangible benefits—the PRINCE2 Benefit Management Approach offers a structured and standardized approach.
This is especially noticeable in areas like the explicit assignment of ‘Benefit Owners’ and the detailed ‘Review Schedule’, ensuring a meticulous focus on realizing and measuring benefits.
PRINCE2 7’s Unique Value in Benefits Management
PRINCE2’s approach to benefits management is multi-faceted:
Standardization: With a consistent approach, PRINCE2 ensures that every project—regardless of size or domain—has a clear path to benefit realization.
Roles & Responsibilities: PRINCE2 explicitly defines roles, ensuring accountability and a clear division of labour in benefits management.
Roles in PRINCE2 Benefits Management
Project Board Executive
The primary role of the Executive, often a senior manager, is to ensure the project remains viable, aligning with the Company’s objectives. They authorize the Benefits Management Approach and own the Business Case, which includes the defined benefits and dis-benefits.
The Project Manager
The Project Manager ensures that benefits remain in focus during the project, aligning deliverables with the Benefits Management Approach.
Benefits Owner
Defined within the Benefits Management Approach, Benefits Owners are individuals or teams assigned to specific benefits. Their role continues post-project, ensuring their respective benefits are realized and measured. This will normally be, or include, the Senior User role.
Project Assurance
Ensures benefits realization remains on track and aligns with quality expectations.
Project Support
Provides administrative support, often organizing and assisting in benefits reviews.
Post-Project Benefit Management
After the project concludes, the Benefits Owner plays the most critical role.
They:
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- Conduct regular benefits reviews, as outlined in the Review Schedule.
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- Ensure benefits realization aligns with the defined metrics.
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- Address any issues or challenges that hinder benefit realization.
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- Report on the status of benefits realization to the organization
In Conclusion
Remember, projects don’t exist in a vacuum. They align with an organization’s broader objectives.
Benefits management isn’t a side activity within PRINCE2; it’s interwoven deeply into its fabric.
Through structured processes and the Benefits Management Approach document, PRINCE2 ensures that projects don’t just finish – but deliver tangible value.
By defining roles responsibilities, and a transparent process, PRINCE2 ensures that benefits realization remains a consistent focus, not just an afterthought.
As you prepare for your PRINCE2 Practitioner Exam, remember: it’s not just about doing projects right; it’s about doing the right projects.
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