The art of identifying a project benefit

Managing Benefits - Optimizing the Return from Investment by Steve Jenner guidance defines a benefit as a “measurable improvement from change [i.e. outcomes], which is perceived as positive by one or more stakeholders, and which contributes to organizational (including strategic) objectives”. The act of defining a benefit forms a crucial part in the initial “Identify and Quantify” practice of the benefits management cycle that lays a solid foundation for:

1. informed options analysis in the progressive development of the programme/project business case in terms of viability (risks), affordability (costs) and most importantly, desirability (benefits).
2. investment appraisal of the final business case to compare total whole of life costs (both capital and operational expenditure) versus return on investment through expected benefits to be realised.
3. portfolio prioritisation which ought to result in optimised benefits contribution against strategic objectives for the organisation.
4. management of benefits realisation in operational service to actualize those new strategic objectives. 

This is why benefits ought to be the primary rationale for any capital investment decision-making. As such, when initially identifying a benefit as part of a benefit mapping exercise, it’s important to consistently articulate the measurable improvement from change in a structured manner to enable progressive objective assessment of the benefits plan against the business case. The reason being is that the benefits stated in the business case used for continued business justification makes more sense if both baseline documents remain aligned and approved at the same time.

To set benefits on a solid foundation, the benefit type ought to refer to those benefits categories communicated in the organization’s portfolio benefits management framework and these benefit categories are in turn used in the portfolio management framework to categorise investments against new strategic objectives. For example, an “efficiency - cashable” benefit category would typically be written as [increased cost saving of “X”% over “Y” years]. 

That is, [measurable improvement using a verb] by [benefit type] of [amount as a percentage or data range] over [time period]. As such, the benefit sought should articulate an initial concept of what the strategy need aims to achieve (i.e. the benefits to the sponsoring organization that aim to be delivered as a result of any capital investment). The benefits sought should include the potential to deliver increased value (where possible), while successfully executing strategy. Since benefits and value management are mutually supportive disciplines concerned with delivering value for money. 

The Guide for Effective Benefits Management in Major Projects advises the following criteria that anyone can use to validate any benefit type. That is, a benefit:

1. by definition should be measurable – if not, it cannot be claimed as realised.
2. is an improvement resulting from an outcome (the end result) of the change. A benefit is not the change itself.
3. is in the eye of the beholder – stakeholders value the same benefits differently. As such, a benefit to one stakeholder may be a disbenefit (an outcome perceived as negative) to another.
4. creates an explicit link between tangible outputs, capabilities, outcomes and benefits with – new strategic goals.
5. ensures there is alignment of effort, resources and investment towards achieving organizational (including strategic) objectives.

In addition to the above, Stephen Jenner also advises confirmation of:

1. The benefit owner and their agreement to be accountable for the benefit, particularly the required enabling business changes. Noting that accountability is a personal choice, you need to want to held accountable for benefits realisation.
2. How will the sponsoring organization know if the benefit has been actually realised (i.e. what baselines and measures will be used)?
3. What's the scale of the expected benefit (i.e. how much?) and when will it be realised (i.e. the ramp up or the trajectory to full benefits realisation making allowances for familiarisation with new and improved ways of working)?
4. What part of the organization, or part thereof, does the expected benefit actually improve?
5. Which new strategic objective does the benefit contribute to and how strong is this contribution e.g. logical/empirical, direct/indirect?

Far too many organizations struggle to demonstrate actual performance improvements through emergent and forecast benefits that should be realised in practice, particularly where benefits when not properly identified and measured from the onset in a business case. It should be recognised that benefits management is not another aspect of a programme or project management but rather the rationale for options analysis, investment appraisal and portfolio prioritisation in any capital investment decision making against available organizational resources. As such, care should be taken when identifying and claiming any benefit to ensure that it describes the critical success factors that can be used by the sponsoring organization to determine successful strategy execution through programmes and projects. 

1. APMG International (2014). Managing Benefits by Steve Jenner, 2nd Edition. The Stationery Office, Norwich.
2. Infrastructure and Projects Authority (2017). Guide for Effective Benefits Management in Major Projects. Available at: https://www.gov.uk/government/publications/guide-for-effective-benefits-management-in-major-projects
3. Building Queensland (2020). Investment Logic Mapping Guide (Business Case Development Framework 3^rd Release. Available at: https://buildingqueensland.qld.gov.au/wp-content/uploads/2020/04/Investment-Logic-Mapping-Guide.pdf
4. Antonio-Nieto Rodriguez, A. & Speculand, R. (2021). Strategy Implementation Body of Knowledge. Strategy Implementation Institute, United Kingdom.