Benefits Management: Bridging the gap between strategy design and value delivery
Organisations that fail to bridge the gap between strategy design and value delivery are wasting eye-watering amounts of money because of poor project performance. It’s as though executives don’t recognise that strategy is delivered through initiatives; some seem to miss the importance of effective project and programme management as the gearbox for delivering organisational strategy.
In a recent study (2018), PMI identified a group of ‘Champion Organisations’ that buck this trend. These typically complete 80% or more of projects on time and on budget whilst meeting business intent. PMI characterize them as ‘having a steady focus on benefits management, which is required to execute strategy.’ They waste far less money (21x) than ‘underperformers.’ However, the same study notes that just 1 in 3 organisations have a high level of benefits management maturity.
Non-Champions – some benefits management
Where benefits management maturity is low, projects may start well with benefits identification and planning activities carried out diligently, producing an assortment of products such as; benefit dependency maps, profiles and benefits realisation plans. However, as pressure mounts to get the project over the line, good intentions waver and may disappear altogether.
It’s partly cultural: project and programme managers are experts in delivering to a specification: outputs, capabilities – such as new or improved products, services and infrastructure (assets). But once these are completed the project manager’s involvement ceases. Assets and capabilities are handed over to the business, but nobody works with users to create value.
Project failure is often blamed on the project team, but this isn’t correct – it’s really a business problem. Project managers can contribute to a reduction in the value of an initiative, e.g. by allowing a schedule to slip or costs to overrun, but they cannot create value, especially if it was never there in the first place. To put it bluntly, no project manager, no matter how heroic, can save a project that is ill-conceived, mis-conceived or just plain dumb!
It is therefore essential that other stakeholders in the change process are engaged to ensure that benefits are realised, and strategic goals achieved e.g. CxO and Directors, Financial Managers, Business Change and Benefits Managers.
If organisations are to successfully bridge the gap between strategy design and value delivery, they need to embed and sustain benefits management from top to bottom, and especially at a strategic-level – for example the Enterprise PMO – and they need to be able to manage their investments as a coherent portfolio of change initiatives.
Benefits Management – Integrated Value Delivery
All change initiatives should be treated as investments. This means asking the right questions: How investible is a particular initiative? Does it represent value for money and what is the return on investment (ROI)? Will it contribute to achieving one or more investment objectives, e.g. a reduction in the cost of existing services (economy), improved throughput of an existing service whilst reducing unit costs (efficiency) or to meet some form of statutory, regulatory, or organisational requirement (compliance)?
Benefits management works across a portfolio of initiatives, providing the assurance that we are spending money on the right projects, change or BAU activities. Everybody has constraints, whether they are budget limits or competition for scarce resources; the right planning (and of course the right focus) needs to be applied to ensure that initiatives are worth doing, and affordable, and are the best combination given the constraints.
This means that every part of the project and programme life cycle needs benefits management tightly integrated. At each stage or phase-gate in the life cycle, benefits management activities and knowledge products provide a key input into decisions about the viability and value of an initiative.
Going back to the PMI study, Champion organisations understand that high benefits management maturity won’t happen overnight and won’t happen by itself. It will require know-how and concerted effort, necessary to embed and sustain it as a well-honed and repeatable internal capability. It is worthwhile, though, as it provides organisations with the ability to compare investment opportunities, make consistent decisions and improve overall value delivery.
About Merv Wyeth, FAPM
Merv is UK Service Delivery Partner of Amplify™ Industry-leading Strategy Execution Management software which helps customers, including Fortune 500-listed global companies and corporations, to create business value from strategic change.
An experienced programme manager, Merv is a subject matter expert in Managing Benefits, Better Business Cases and Open Strategies.
Merv is Secretary of APM Benefits and Value Specific Interest Group and co-facilitator of the Benefits Management Specialist Group on the UK Government Product Delivery Community Network (GovPDC)