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Benefits Realisation

Projects have objectives and achieving these objectives requires a number of project outputs. However, the completion of project outputs does not always guarantee that the benefits will be realised.

For example, a large manufacturing organisation with several factories based on different sites, decides to introduce an intranet with the objective of improving internal communications.

Following a hefty investment, the new intranet is installed, however six months later there is little sign that internal communications have improved.

Further investigation reveals that despite being widely accessible, few employees are actually using the system. Despite achieving the objective of installing the intranet, the project failed to deliver the benefits - actually getting staff to use the new system to improve internal communications.

Benefits Realisation Management (BRM) is the process of defining the benefits sought from a project and actively ensuring they are delivered through the implementation of the project.

Had the manufacturing organisation in the example above effectively managed their benefits realisation, they would have ensured they set up a programme for raising awareness and training their staff to use the intranet effectively.

Managing Benefits Realisation

The process for managing benefits realisation consists of five stages. A review session takes place between each stage to ensure that the project is still on course to deliver the benefits and objectives that it originally set out to achieve.

Stage 1 - Establishing the Vision and Setting Objectives

For a project to be successful there must be a clearly defined vision and set of objectives. It is very important that the vision is shared and understood by all stakeholders affected, including managers, employees and shareholders.

Workshops held with representatives of the key stakeholders are recommended to understand their views and for larger projects a steering group should be established to ensure the project remains on track and fits strategically with other projects taking place within the organisation.

A clearly defined vision will enable the development of project objectives, which should ideally be measurable.

Stage 2 - Identify Benefits and Changes

A number of project changes and outputs will need to take place to achieve the objectives set out. However, simply making the project changes does not guarantee that the benefits sought by the project objectives will be realised. At this point the team will need to identify the benefits sought from the project and ensure the appropriate changes take place to properly realise them.

Again using workshops, the project team should work with the key stakeholders to identify the benefits for each objective. Once identified the benefits should be mapped. This will enable them to be grouped and begin to show a path of changes that will allow the benefits to be realised.

It is likely that a number of smaller benefits will need to be achieved before larger benefits are realised. These smaller benefits are often known as 'enablers'.

Stage 3 - Define Initiatives

With the benefits and changes identified, mapped and grouped, it is possible to determine and prioritise the initiatives to be used to implement the changes.

'Benefit profiles' - concise documents of no more than one side of A4 should be created for each benefit, to explain why it is part of the project, the changes required to enable it, the changes that it will enable and the initiative to be used to make the change.

Stage 4 - Implement and Manage Initiatives

As the initiatives are implemented it is important to ensure they remain consistent with the overall project objectives and vision. They may also need to respond to 'project drift'. This is where the direction of projects, especially those taking place over longer durations can change, often due to political or economical factors. Consultation with the steering group is an important part of managing this.

Other aspects of management include contracts, overcoming resistance to change and resolving any problems or issues that may occur.

Stage 5 - Managing Performance

The final stage in the process concerns performance management - measuring the extent to which the benefits are realised. In addition to measurement it is also important to carry out a PIR (post implementation review) and document any lessons learned, before formally closing the project.

Often benefits are only realised after a project has being completed. It may take months or even years for before they are fully realised and appropriate provisions should be made in the project budget to ensure measurement can take place during this time period.

For More Information

Purchase Gerald Bradley's book on benefits realisation from Amazon

Dealing With Your Difficult People

For leaders managing constant change, conflict is built into the very fabric of their organizations. When conflict is not dealt with well, it can create strained relationships and grow to sap the time, energy, and productivity of even the best teams. Dealt with positively, conflict can also be a catalyst that sets the stage for needed changes. You will never deal with conflict perfectly, but here are a few tips worth using in dealing with your most difficult people:

1. Talk to people instead of about them. Dealing with conflict directly may be uncomfortable and lead to some disappointment, but it cuts down the mindreading and the resentment that can occur when problems are not dealt with directly. Timing, tact, and taking distance will always have their place, but make sure you still keep conflict eyeball to eyeball.

2. Be a problem solver not a problem evader. We are taught from childhood to avoid conflict and often vacillate between the pain of dealing with unresolved problems and the guilt over not dealing with them. Such vacillation saps energy and time; it can affect morale and turnover. Problem solvers avoid avoidance; they learn to deal with conflict as soon as it even begins to get in the way.

3. Develop a communication style that focuses on future problem solving rather than getting stuck in proving a conviction for past mistakes. You want change, not just an admission of guilt. Winners of arguments never always win, because consistent losers never forget. You want results, not enemies seeking revenge. By focusing on future problem solving, both can save face.

4. Problem solvers deal with issues, not personalities. It's all too easy to abuse the other party instead of dealing with issues. Be assertive but affirm the rights of others to have different positions, values and priorities. When you personalize disagreements and attack back, you invite escalation. Keep the focus on mutual problem solving not name-calling.

5. Honor, surface and use resistance. Attempts at threatening, silencing or otherwise avoiding criticism of change will only force resistance underground and increase the sabotaging of even necessary changes. Explored resistance helps build clarity of focus and action. Push for specific suggestions. If criticism is extensive and continues even after facing it, it may not be resistance-know when to admit that you are wrong!

6. Redefine caring to include caring enough to confront on a timely and consistent basis. Avoid labels that give you or others excuses for not confronting a problem-They are too sensitive or too nice, scene makers or people who have contacts, too old or too young, or the wrong race or gender. If you believe people cannot change or benefit from feedback, you will tend not to confront them. Instead, treat all equally by caring enough to be firm, fair, and consistent.

7. Avoid forming "enemy" relationships. The subtle art of influence is often lost in the heat of organizational battle. When interaction becomes strained or bias exists, the negative interaction coupled with the distance that often results invites selective scanning and projection. We see what we want to see to keep our enemies "the enemy." If a relationship is limited to polite indifference and significant negative interaction, expect polarization and an "enemy" relationship. In such relationships everyone loses. Take seriously the words of Confucius, "Before you embark on a journey of revenge, dig two graves." Even your most difficult people usually have some people they work well with. Make one of those people you. Don't look for the worst; learn to look for the best in even difficult people.

8. Invest time building positive bridges to your difficult people. Abraham Lincoln reportedly said, "I don't like that man. I must get to know him better." Don't be insincere; look for ways to be sincere. It takes a history of positive contact to build trust. Try building a four-to-one positive to negative contact history. Give specific recognition and ask for assistance in the areas you respect their opinions. Work together on a common cause and search for areas of common ground. By being a positive bridge builder, you build a reputation all will see and come to respect even if a few difficult people never respond.

Finally, don't forget to spend some time looking in a mirror. Ron Zemke put it well when he said, "If you find that everywhere you go you're always surrounded by jerks and you're constantly being forced to strike back at them or correct their behavior, guess what? You're a jerk." Influencing others starts by making sure that you're not being difficult yourself.

Copyright 2006 by Terry Paulson, All Rights Reserved

About the Author

Dr. Paulson is a psychologist, speaker and author of "They Shoot Managers Don't They?" He helps people make change work. Visit http://www.terrypaulson.com or contact him at 818-991-5110. Add comments to his blog at http://www.leaderline.net/.

Project Management – How To Do Cost Benefit Analysis – To Go Ahead Or Not?

With each project we have a desired end point, a definition of success. We spend time, and energy, creating solutions and plans to solve a problem or get to a desired end point; however we may not go ahead with plans because they are not simply financially viable or just too expensive.

Cost Benefit Analysis is a simple and widely used technique for deciding whether to make a change or to go ahead with a project.

As the name suggests, simply add up the value of the benefits of a course of action, and subtract all the costs associated with it. This calculation may be dollar focussed or undertaken on a more qualitative variation.

Costs are either one-off, i.e. a single expense, or may be incurred over a period of time eg weekly monthly etc. or perhaps could be a combination of both.

The benefits of a course of action are most often received over a period of time.

We build this effect of time into our analysis by calculating a pay-back period. This is the time it takes for the benefits of a project to repay, to the investor or business, the full cost of implementing the project.

In business, companies usually look for pay-back over a specified period of time - e.g. three years being quite normal. This payback period is usually calculated using complicated mathematical and financial formulae, using interest rates and CPI etc and is often described as a percentage return on investment per year.

Simplistically for our purposes let’s say it takes 3 years to pay back the cost of implementation of a project, at zero interest rate, and CPI is also zero. (What a stagnant world that would be) The percentage return per year is therefore 100 divided by 3years equalling 33.33%.

Some businesses have a project hurdle rate of 30%. That means they will not invest in the project unless it returns a better rate then 30%. I.e. The project must pay for itself in less than 3 years.

In its simple form, cost/benefit analysis is carried out using only financial costs and financial benefits.

For example, a simple cost/benefit analysis of a new shopping centre would measure the cost of building the centre, and subtract this from the economic benefit to the developer of increased rental income. It would not measure either the cost of any environmental damage or the benefit to local consumers of convenient and easier travel to the shops.

A more sophisticated approach to cost/benefit analysis is to try to put a financial value on these intangible costs and benefits. This can be highly subjective.

For example; Is an historic building is worth only its material cost if it is in disrepair? Is it worth the value of the land it is sitting on? Or is it worth millions due to the history located with the building, who lived there, what decisions were made, and who was born/died there?

Alternatively what is the $ value of putting fresh plants in an air-conditioned office?

These are questions that managers and business/political leaders have to answer, and be able to justify their answers to others.

The version of cost/benefit analysis we covered here is simple. As noted though, where large sums of money are involved, eg mining projects, oil refineries, and large property developments etc project evaluation is a specialisation on its own.

About the Author

Liz Cassidy, founder of Third Sigma International is an author, Speaker, Trainer and Executive Coach and is passionate about facilitating results in the businesses, professional and personal lives of her clients. For more information http://www.thirdsigma.com.au