If you joined my live chat, entitled ‘The Changing Project Management Landscape’, you would’ve heard me share that a massive bugbear of mine is benefit realization and management.
I’ve always believed that the way in which organizations typically manage benefit realization isn’t effective, often resulting in lost revenue and missed opportunities. If the last year has taught us anything it is that optimization of benefit realization has never been more important, and yet a huge number of organizations are still passive in their management of benefits.
Organizations need to demonstrate a financial and/or non-financial benefit for every project. Taken together, it’s this continual stream of business value that will enable us to test why we are spending time and effort on an idea or project, as opposed to something else that might offer a more immediate and obvious benefit.
By taking an active approach to benefit management, you can increase business efficiency, drive new levels of productivity, and in doing so transform organizational agility. Exciting, right? The question is how do we do it?
Let’s take it step-by-step:
There’s an entire discussion to be had about how we capture, manage and evaluate ideas at the front end of innovation, but my purpose here is to look at what happens after a great idea (at least on the first evaluation) leaves the ideas factory and goes out into the big wide world of evaluation and delivery.
A formal business case is an excellent tool for any organization, but I have seen time and time and again that many organizations are still not using them properly. They allow you to cost evaluate and justify an idea into a project, predicting when and where benefits will be realized and highlighting any potential delays.
The single most important thing about a business case is that they need to be revisited on a regular basis even after the project has started. That means turning the business case into a living breathing document; not just filing it away in a cabinet (digital or otherwise) so it can gather real or virtual dust.
Many organizations go through the process of creating a business case using a paper-based process and, as such, it is very rarely re-evaluated during the course of the project. This makes it increasingly difficult for project managers to confirm if they’re on track or not when it comes to the realization of the anticipated benefits.
What’s equally frustrating is that very few organizations stop projects because they have diverged from the intentions captured in the original business case. This goes back to my point about making the business case a live document/system.
It’s vital that project managers refer to the business case and monitor whether the project is on track. This gives the organization the opportunity to identify issues causing divergence from the initial business case and this will ensure that the expected benefits are more fully realized. It will also give project managers the confidence to know that they’re on the right track throughout the execution of a project.
With all of this in mind, what does a good business case actually look like?
There are many methodologies for what a business case should look like, but the commercial reality is that there is no such thing as a standard business for every organization and every type of idea or project.
It is, however, important to adopt a set of common standards, with the aim of democratizing, socializing and optimizing the process to make it easier for everyone involved. You might end up with multiple business case formats, but there should be standardization of data sets, types and metrics across all of them. When everyone is looking at the same data in the same formats, it is much easier to have a common view of progress against benefits realization across the entire portfolio of business cases.
Once a business case(s) has been approved, project managers should be able to translate them into project plans with greater ease, efficiency and transparency.
Let’s consider project and portfolio management benefit realization next.
Project managers need sight of business cases so they can align their plans to them and execute all the benefits proposed effectively.
Assigning ownership to specific benefits in the business case in a way that is constructive and in keeping with the organizational culture is vital here. In recent years, and especially during the pandemic, we’ve seen a move away from a blame culture, but there’s still fear of failure and some will not want to take accountability for their part in the delivery of innovation. So senior leaders need to create a framework for innovation management and delivery governance that allows people to raise their hands when projects are in danger of going off track without fingers being pointed.
By connecting your project management processes to the wider organization, you can obtain an earlier indication of what’s coming downstream and the resources that will be needed for the successful delivery of a project. This is enough time to get people acclimatized to their role within the project as well as taking ownership of the necessary tasks.
Alongside this, if you have got a business case in place that states Marketing or Sales, Service or Support are essential to the success of a project, you are going to check in with those teams to ensure they are delivering their part of the anticipated benefits.
Organizations need effective methods for managing, monitoring, and measuring benefits to ensure that they’re only allocating resources and funding to the projects that will generate true organizational value.
Effective benefit management can transform your entire innovation and delivery pipeline, which in turn can play a crucial role in steering the strategic direction of the business. If you don’t have an end-to-end perspective on your innovation to project portfolio, your organization will be missing out on crucial benefit realization opportunities, and if you’ll forgive the blatant product push (it’s the first one in the entire blog!), that’s why I’m so deeply passionate about the value that we bring to our customers.
What we give you is a complete, connected view of every idea captured in our ideation platform (edison365ideas) that can then be business case evaluated (if the project scale warrants the extra step – not every project does) and finally turned into robust, transparent, and manageable projects that once delivered provide the full anticipated benefits outlined in the original business case.