Benefits Management

There is only one measurable parameter for projects to be considered successful – the realisation of the project benefits. Organisations must ensure that the desired benefits come from the final deliverables or the outcomes of the project. It is crucial for client organisations to identify, define, plan, track, monitor, and realise the different benefits that they can derive from the project. These elements also lay the foundation for the different parameters for measuring project success.

Project Success Criteria

Projects are goal-oriented. They produce benefits that will be advantageous to the client requiring the project. A certain project is deemed successful if and only if it can realise the benefits that the client expects.

The project requires a system that will allow the client, stakeholders, and end-users to evaluate whether the project outcomes are commensurate with the expected project benefits. This is the main objective of creating a project success criteria (PSC).

The statement criterion should be well-defined, specific, and concise. The PSC specifies the method of measuring the criteria, the frequency of measurements, and the person responsible for measuring the criteria.

The success of the project is dependent on three important factors. These include:

1. Time, cost, and scope constraints; also known as the Iron Triangle
2. Realised benefits
3. Satisfaction by the stakeholders

Well-documented project success criteria are important in guiding project managers in the planning and the management of the overall project to produce the deliverables and provide the expected benefits.

Key Performance Indicators

Organisations that engage in projects can also use key performance indicators in measuring project success. It is important to note that KPIs evolve from project success criteria. One can think of KPIs as a more detailed measurement plan that stems from PSC.

Key performance indicators contain a predetermined set of values which serve as a baseline for measuring success. The value sets are the indicators and they can be either quantitative or qualitative.

• Quantitative indicators are objective and measurable data sets.
• Qualitative indicators are more subjective and assigned numerical values to allow for easier measurement.

The indicators are measures of an event or performance. The performance component of the KPI focuses more on the measurement of an activity’s elements. These elements of an activity include the following:

• Input
• Output
• Mechanism
• Control

These elements must be measured within a specific time frame. The KPIs should also reflect whether the activity-enabling mechanism is a system type of mechanism or is a human mechanism.

Some of the most important characteristics of key performance indicators as used in project management include the following:

• Quantifiable, analysable, and shareable measurements
• Frequent, periodic, and regular measurements
• Project benefits-oriented
• Project goals- and objectives- aligned
• Reflects the success factors of the organisation
• Cost-effective, realistic, and customised to the organisation’s culture and project constraints
• Serves as a basis for critical project management decision-making

Success Factors and Project Management

Success factors are critical to the effective implementation of any project. These parameters for success that get set out even before the project gets underway can provide project managers with a clear idea of what they need to do. If the project’s goals and objectives provide a general direction for the project, the success factors are the bull’s eye that project managers must hit.

Some of the most important success factors include the following:

• Degree of stakeholder satisfaction
• Achievement of project objectives
• Project efficiency with respect to the agreed budget
• Project efficiency with respect to the time constraint
• Value-added worth
• Degree of compliance with quality requirements

One of the most important success factors in any project is the level of satisfaction that stakeholders have about the project. If all stakeholders are fully satisfied with the final deliverables, then one can safely say that the project is successful. If some of the stakeholders are not 100% satisfied with both the deliverables and the benefits, then there must be something wrong with the project.

The other success factors are also important. However, they are easier to measure. The data derived from the project that addresses these success factors are quantitative or objective in nature. Stakeholder satisfaction, while you can assign a value to represent the level of satisfaction, will still be a very subjective parameter.

Benefits Management

The successful management of change and project delivery depends on the effectiveness of benefits management. Benefits management requires the identification, planning, measurement, and tracking of project benefits. It encompasses the different activities from the initiation of the project until the realisation of the project’s last predetermined benefit.

The aim of benefits management is to ensure the specificity, accuracy, and measurability of time-bound, agreed-upon project benefits.

Benefits management is also known as benefits realisation. The only way an organisation can say that its project’s benefits are realised is when there are observable changes in the organisation. These changes can be in the form of behavioural change or a change in people’s attitudes.

Unfortunately, many of these benefits can only become evident several months after completion of the project. That is why the benefits manager should be able to keep track of the execution of the benefits management plan so that benefits milestones can be accurately identified and documented.

Benefits Management Process

The business management process starts with a very clear definition of the project’s baseline benefit requirements. The organisation can then go through the different stages of the benefits management process.

1. Planning

This stage involves the creation of policies that relate to benefit management roles and responsibilities, measurements, KPIs, and priorities. It lays the foundation for the effective management of the benefits.

• Initiation

The initiation phase involves the mobilisation of the resources necessary for benefits management.

• Quantification

The benefits of the project need to be quantified to facilitate more efficient and more accurate measurement. Quantification may require the use of Delphi, pilot studies, workshops, and other techniques of quantification.

• Valuing

Organisations can express the value of a benefit in terms of its financial and nonfinancial benefits. Financial benefits often require different estimation techniques. This is necessary to provide a more effective comparison between financial cost and financial benefits.

• Realisation

Noticeable changes in the organisation are the effects of the realisation of benefits. These changes can be in the form of behavioural or attitudinal changes or even physical changes.

The success of a project depends on how accurate the final deliverables are to the agreed-upon requirements. More importantly, the project should be able to provide the expected benefits to the stakeholders, end-users, and the client.