Benefits and Outcomes

Here is another part of the article from  Larry Cooper talking about Benefit Realization:

First let's define the key terms in Benefits Realization:
- Outcomes: the results sought, including either intermediate outcomes in the chain, those outcomes that are necessary but not sufficient to achieve the end benefit, or ultimate outcomes, the end benefits to be harvested.
- Initiatives: actions that contribute to one or more outcomes.
- Contributions: the roles played by elements of the Results Chain, either initiatives or intermediate outcomes, in contributing to other initiatives or outcomes.
- Assumptions: hypotheses regarding conditions necessary to the realization of outcomes or initiatives, but over which the organization has little or no control. Assumptions represent risks that you may not achieve desired outcomes. Any change to an assumption during the course of the benefits realization process should force you to revise your map.
- Results Chain Technique: used to build simple yet rigorous models of the linkages among the four core elements of the benefits realization process: outcomes, initiatives, contributions and assumptions.

Benefits realization is used at the beginning of a project to determine what benefits will accrue to an organization should they choose to execute the project. As all of the potential benefits from a project do not accrue at the same time, or may do so without going through intermediate steps or outcomes, it becomes critical to understand what will be achieved at each project stage, and especially whether any benefits will accrue if a project is cancelled either partially or in its entirety.

The genesis of the benefits realization approach was due to the large number of IT projects that were getting cancelled without delivering any real value (or benefit) to the sponsoring organization. Benefits realization helps you to identify the benefits of doing something and the initiatives that would be needed to be executed to achieve them.

As the initiatives that are needed to be carried out on a project get structured as discrete entities that deliver either a direct benefit or an intermediate outcome, it thus becomes possible to determine, in later project stages, the effects of the cancellation of a specific initiative - i.e. what benefits will we not get if we cancel it. This is a powerful business tool for protecting project investments.

An important point to note with benefits realization is the recognition that not all benefits are accrued upon project completion – many may take years before they can be fully reaped by the organization. To track the benefits accrual, a 'benefits register' is set up which usually contains the following kinds of information about each outcome:

- Description of outcome
- Contribution – what/to whom does it contribute
- Metric/Frequency – how do measure its realization
- Measurement method
- Baseline value
- Target value/date
- Tolerance limits
- Action if outside tolerance limits
- Accountability
- Benefits profile – i.e. increase, decrease, ratio, etc.

This register then becomes like a dashboard that can be used to determine if the results of having conducted the project are in line with the expectations that were established at its inception.