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Sunday

New project

Starting a new project this week around defining a business case template for a client - this includes defining a benefits management framework. Thorough this process I will hopefully find a lot of public information, which I will post on this blog. If you know of any please let me know.

It's interesting, I always here the classic - I cannot define my benefits because they are too intangible or regulatory! Well, if you cannot define the benefit, at least define a KPI to know you will achieve it! I also really think that all projects can define some tangible benefits. The problem is getting senior management stakeholders/sponsors to be accountable for these benefits.

Thursday

Gartner - Building Great Business Cases

Found a great document on the web which talks about building great business cases from a benefits perspective. It is Gartner's Business case development article. Definitely worth a read. It is attached below - let me know your thoughts on it and happy reading!

Note - if you are having problems accessing the document or cannot see it, drop me a comment with your email and I will send it to you.

Cost-Benefit Analysis

Saw a good article on Cost/benefit analysis at Solution matrix. You can even download a free spreadsheet if you subscribe to their news letter.

Here are some highlights from the article.

- The term Cost benefit analysis is used frequently in business planning and decision support. However, the term itself has no precise definition beyond the idea that both positive and negative impacts are going to be summarized and then weighed against each other.

The term covers several varieties of business case analysis, such as:

Return on investment (ROI analysis)
Financial justification
Cost of ownership analysis
All of these approaches to cost benefit analysis attempt to predict the financial impacts and other business consequences of an action. All these approaches have the same structural and procedural requirements for building a strong, successful business case. They differ primarily in terms of:

Wednesday

An interesting post..

Saw an interesting post from by Terry Doerscher on September 13, 2007 that talked about Benefits Management

Some interesting items of note:

- I (Terry) have to admit that at first I didn't key in on its true significance, but have since come to really appreciate Benefit Management as an essential ingredient to achieving high levels of business performance, but one that is too often missing from the process repertoire. If you can employ this function with some degree of competence, it will drive the improvement and integration of many other main-line processes such as strategic planning, portfolio analysis, scope control, and product and service management.

So, what exactly is Benefit Management, or Benefit Realization as it is sometimes referred to? It is a formal mechanism for making sure that someone is keeping a watchful eye on business value versus cost and risk as a program or initiative is proposed, analyzed, approved, developed and deployed, and the methods applied to accomplish those functions.

The Benefit Owner is the central figure to employ Benefit Realization techniques, working in conjunction with portfolio, program and project managers, sponsors and other common roles. Uniquely, the benefit owner is responsible for maintaining a consistent and detailed long term line-of-sight focus on results relative to risk and cost. They ensure benefits are defined, cataloged and quantified as programs or initiatives are created and developed, and challenge ROI, NPV, or IRR assumptions for accuracy. The benefit owner also ensures that benefit metrics are established integral to program approval.

During execution, the benefit owner is responsible for monitoring underlying projects to ensure they stay on track to deliver program objectives at defined cost-benefit values as they face scope changes, delays and technical challenges. If at any time it becomes apparent that achievement of benefit is compromised or in serious jeopardy, the benefit owner has the authority to recommend replacing under-achieving projects or killing the overall effort.

Post-deployment, and long after the project managers are on to other assignments, the benefit owner stays on point to measure how actual program results track to initial projections, recommend adjustments and communicate lessons learned. In some cases, they may remain engaged over the life of the product or service, assisting in continued evaluation of benefit and making end-of-life assessments.

The role of the PMO in benefit realization

The PMO's role in all this is to help sponsor the program and establish processes, train participants, assist the benefit owners with information gathering and analysis, and facilitate reporting. They are also a natural liaison between benefit owners and project managers to help develop a collaborative partnership.

While there are a lot of underlying details that go into this process, I think you
can begin to appreciate how Benefit Management acts as a magnetic force to couple strategic intent with actual results. It fosters methodical analysis of investment portfolios relative to business need, and goes a long way towards countering a fire-and-forget mentality that sometimes takes root after the funding decision is made. By providing active value-based management oversight of deliverables as they are designed and developed, it mitigates the potential for a program or project to go on needlessly, or inadvertently lose the essential elements that deliver true business benefit when stresses arise.

Finally, it addresses the age-old problem of who will measure the value that a new
product or service actually delivers compared to those fantastical promises of 4-digit ROI on the front-end. In business management, like most skill sports, a seamless follow-through is frequently the hallmark of proper form.

Great post Terry!

The information paradox - great book for understanding the benefits process

One book I have on my reference list, is
The information paradox. This is a great resource I recommend you get.

The book discusses the following mindset underlying the Benefits Realization Approach and is based on the following premises:

Benefits do not just happen - They don’t just automatically appear when a new technology is delivered. A benefits stream flows and evolves over time as people learn to use it.

Benefits rarely happen according to plan. A forecast of benefits to support the business case for an investment is just an early estimate. It is unlikely to turn out as expected, much like corporate earnings forecasts. You have to keep checking, just as you would with a financial investment that fluctuates in value on the securities market.

Benefits realization is a continuous process of envisioning results, implementing, checking intermediate results and dynamically adjusting the path leading from investments to business results. Benefits realization is a process that can and must be managed, just like any other business process.

Purpose of this blog

Hi - this is my first post on this blog. I have been in the technology industry for over 10 years as a consultant, business analyst and projects manager. I moved into the IT Strategy and Governance (ITSG) space after about 5 years ago, where I was more in the delivery space. The ITSG area exposed me to the business case development process and the topic of benefits management. Most organizations struggle to define good benefits and that is why business case value propositions are some times very subjective. If you can't define and then quantify benefits, all the financial calculations (like NPV, IRR) will be pretty meaningless. Also, poor benefits definition will make the whole benefits management process redundant and hence no way of objectively saying that beenfits were realized.

This is a blog for professionals to share their views, questions and ideas around the Benefits Management process, in terms of defining benefits during the investment or business case process, managing and measuring benefits to eventually realizing the benefits when the solution is delivered. We will touch on various related topics and good resources. My focus, per my background, will be on benefits from technology or process solutions, however there is no reason other types of projects cannot use the same rationale.

If you know of any good links, resources or information you would like to share please share it with me and I will put it on this site.