“I am aware that the financial benefits we are receiving from $700,000,000
investment in our project portfolio are not measured effectively”
Group CFO, 2016
It would be a concern if this statement from the CFO of a large financial organisation was the exception, but unfortunately, this situation is the norm, a far too common practice. While many C-level executives are increasingly concerned about the return they receive from their investment in projects and change, there are great difficulties and challenges putting in place an effective, open and transparent Benefits Management Framework. From Seven Consulting’s own experience in assisting organisations in this area, we have found that unless the following challenges are confronted, the process of Benefits Management will be compromised and failure a high probability.
Challenge 1: Business Case focus
Many project managers and sponsors see the role of a Business Case primarily as a means to get their project approved and funded. Once the project has been approved, the Business Case is neglected and replaced by Project Management Plans, backlogs and other detailed artefacts. Changes to scope, objectives, backlog priorities, etc, which really impact benefit assumptions are managed independently to the approved Business Case and this results in a more complex and less transparent benefits model.
Challenge 2: Un-balanced Project Monitoring and Reporting
While most organisations have PMO’s and similar groups in Finance, for example, that monitor and integrate project and portfolio reporting standards, it is our experience that these tend to focus on cost, time and risks. The prevailing focus on costs and schedules often allows project managers to use “de-scoping” and other techniques to maintain “Green” status while the impact of these behaviours on the status of benefits and benefit assumptions are not tracked at all. This all too often leads to a compromise of expected benefits.
Challenge 3: No training or coaching in benefits management
Too many organisations assume that by developing a standard, framework or approach to benefits planning, monitoring, tracking and realisation, and simply making sponsors and project managers aware of the new standard is sufficient. Our experience overwhelmingly is that sponsors, finance experts and project managers require coaching, support and education in the key processes of modelling benefits, linking benefits to objectives, the engagement of benefit owners and other critical stakeholders and, perhaps most importantly, the realisation of actual benefits.
Challenge 4: Change and more change
Benefit and cost assumptions made at the beginning of projects are being subjected to increasing rates of “normal” change. High turnover rates of critical benefit stakeholders e.g. sponsors, benefit owners, etc lead to confusion around transition of responsibility for benefits realisation. In addition, the sheer rate of change delivered to the front-line individuals who are expected to realise the proposed benefits is another serious problem. This can lead to “change fatigue” meaning that the change management effort required to enable realisation of one benefits stream was “over-written” by the change requirements from another change.
Challenge 5: Lack of consequences
Aubrey Daniels, in his wonderful book Bringing out the Best in People, describes his concept of ABC – Antecedents, Behaviours, and Consequences. His argument is that altering Consequences are the key to altering Behaviours. Given the challenges above, it is often too easy for sponsors and benefit owners to avoid the consequences of failing to deliver the benefits they proposed to justify the project investment. The “baking-in” of benefits into sponsor business plans, the use of attestations to the accuracy of benefits during the project development cycle are examples of actions that can strengthen the consequences around benefits realisation.
There are many other factors that can impact the honest and accurate measurement of project costs, support costs and benefits. The use of complex and long benefit value chains, the shifting of benefits into 3+ year horizons, the non-measurement of unpaid hard work by the team, poor baseline data available to effectively measure the added value from benefits and the time spent by part-time stakeholders on projects, all contribute to the current poor state of benefits measurement and realisation.
Read more, continue on to Benefits Management Framework.
If you would like to discuss Benefits Management with us, please Contact Us.