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Managing Business Benefits: Key Principles

1. What is this guidance? This guidance is designed to help Senior Management understand the key principles involved in managing and delivering business benefits and achieving desired outcomes from programmes of change. It also provides a basis to challenge programme and project teams though a set of key questions to help support embedding of good practice throughout the delivery lifecycle. 2. The role of Benefits Management Benefits Management aims to make sure that desired business change or policy outcomes have been clearly defined, are measurable, and provide a compelling case for investment - and ultimately to ensure that the change or policy outcomes are actually achieved. Outcomes may include achieving a policy goal, meeting e-service or PSA targets, improving service delivery or responding to the Efficiency Review this list is not exhaustive. Any programme of change requires a constant focus on the intended benefits if it is to deliver value and remain aligned with business goals and the OGC Gateway Reviews process reflects this focus at each stage. Delivering value begins with defining the expected high-level outcomes before a programme is approved and continues through the identification, profiling, tracking and embedding of benefits. This also involves assessing risk against the proposed outcome to confirm how value can best be achieved. Effective management of the benefits, across several programmes or projects, allows management to make strategic adjustments in resources and ensures that the programme(s) continue(s) to contribute to strategic objectives in a changing environment. This could lead to reprioritising or revising the scope of some projects, or terminating them. It can also provide an opportunity to re-deploy resources freed up through the efficiencies being delivered, to derive new benefits in flight and to minimise unwanted side effects. Because programmes are concerned with outcomes, whereas projects focus on outputs or deliverables, benefits realisation typically requires business and organisational understanding more than specific project management technical skills. Effective transition management (embedding change in operational business) requires that the anticipated benefits and measurement approach must be agreed with stakeholders from the earliest point and confirmed in the business case, while actually realising the benefits normally extends beyond the formal closure of the programme itself. Benefits Management is therefore a process that starts prior to project initiation and continues until the planned benefits are delivered to the organisation and/or its stakeholders. In this context project management becomes a key success factor within a formal end-to-end process of benefits management.

Developing business needs

Managing interdependencies & risks

Responsibilities & stakeholder mgt

Business case

Identifying benefits

Profiling, planning, & managing benefits

Optimising value

Realising benefits & achieving outcomes

End to end Benefits Management

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3. Achieving success checklist: what to look for The checklist has been designed to be used flexibly. It can be used by Senior Management or SROs to ask key questions (areas to probe) about programmes and projects and helps to characterise good practice. Alternatively, Programme Managers may wish to adapt the checklist to form the basis of a simple assessment to determine capability and identify areas for improvement. More detailed guidance sources are also highlighted for those who wish to gain further insight into the principles of Benefits Management.
Area to probe Good practice (maturity)
Outcomes from new policies or initiatives are well articulated. This includes critical success factors and organisational impact a clear view of what success will look like. Programme approval and initiation is dependent on agreed business requirements and a defined benefits management process, including the risks and costs of realising the benefits. Investment activity of all kind is approved and monitored through a rolled up corporate portfolio overseen by the Management Board. The Board regularly reviews risk and return. Failing projects are corrected or terminated, struggling projects are revised or re-prioritised and successful ones are given recognition. Refined definition of benefits updated in the business case to reflect changes and lessons learned. Risk is managed and is acceptable / tolerable. Key sensitivities are given special attention. Top-level benefits can be broken down and attributed to specific projects or groups of projects. All identified major benefits can be linked to strategic goals or targets. Intermediate benefits provide early value. Project teams see the broader strategic context. Costs and risks of the required (or dependent) changes have been assessed and communicated to ministers and operational managers. Costs and risks include organisational development, cultural change and skill development in the affected areas.

Work needed (not mature)

Programmes and projects are initiated to deliver business or policy outcomes before business needs have been fully identified and agreed. No clear view of what success will look like. The Benefits Management process lacking or weak.

OGC guidance SDT Requirements workbook MSP Ch 2 HMT Green Book

i. Developing the business needs

Are the outcomes specified in the PSA, policy or performance improvement requirements sufficiently clear and defined? Are the business needs set out in the delivery or programme plan fully aligned? Do they contribute to the benefits identified at the concept / policy development stage? Is there active management of a portfolio of programmes to attribute, track and measure benefits in a common way? Are all types of delivery activity, including policy development, grouped in programmes to ensure that each programmes Benefits Management process builds a coherent and quantifiable approach to achieving outcomes? Are all key programme decisions driven by the business case (for risks, costs and for benefits)? Has each benefit been subjected to sensitivity analysis? Is each benefit regularly assessed for risk? Are benefits clearly linked to corporate strategic aims? Is it clear how benefits, for example policy outcomes, will be delivered and how does this relate to policy trajectories, to PSA targets or other evaluation measures? Is the rationale for change and investment defined and communicated clearly? Have policy, implementation and delivery issues been subject to full and realistic impact analysis? Are organisational impacts understood and catered for within the overall programme design and planning? (See stakeholder management below).

ii. Interdependencies and risks

Lots of disparate projects, policy work or edelivery initiatives run independently; little visibility of priorities, interdependencies or overall scope of organisations change activity; reduced accountability or ownership. Fire-fighting or reactive decisions without regard to the full cost-benefit-risk mix. Little attention is paid to critical success factors. The contribution of each project to strategic value cannot be assessed. Benefits are overlapping or double-counted and there is no mechanism for evaluating the value contribution of each benefit. PSA targets are not linked to Benefits Management. Changes to processes, service delivery models, and dependencies are unclear or unknown. Overview of Portfolio Management MSP Ch 2 and 4 SDT Benefits workbook MoR MSP Ch 8 MoR HMT Green Book MSP 2.6 SDT Benefits Id and Structuring Managing Change MSP 4.2 MoR

Version 1.0 Area to probe Good practice (maturity)

Whole delivery lifecycle stakeholders are identified, consulted and mapped against benefits. Cross-cutting issues are addressed, and evaluation mutually agreed. Ownership of Benefits Profile is located in business area(s) concerned. Measurement metrics are viable. Senior accountable officials have confirmed and agreed the Benefits Realisation Plans. Business Change Managers are actively engaged. A formal governance process in place and invoked. Benefits Realisation planning involves careful preparation and application of good change management principles and is fully integrated into the governance framework of the programme. Good practice is recorded and embedded in COE or other body. Lessons are learned and applied across projects, business units and Departments. The Benefits Realisation Plan shows appropriate set review points and lead indicators against which to measure progress and either optimise benefits delivery or divest. Remedial action is taken to bring benefits back on track to revise or reprioritise scope within an agreed governance framework. Close attention is paid to benefits that deliver most and to minimise potential adverse side effects (dis-benefits). Benefits are subject to independent audit.

Work needed (not mature)

Decision-making, escalation, issue resolution and sign-off processes not in place. Views of those responsible for benefits not considered. Accountability for realising benefits has not been agreed or the methodology is unsound.

OGC guidance MSP 4.10 MSP 15.4

iii. Responsibilities and stakeholder management

Are all stakeholders, including potential losers, identified and properly engaged from the outset in defining, agreeing and working together to achieve the benefits? Are their individual requirements understood, does this create any conflicts? Have the benefit profiles been signed off by the target business owner(s)? Is there senior level sign-off for the approach and supporting plans? Does the SRO own and drive the overall set of benefits? Are Business Change Managers in place? Is there a formal checklist or framework in place to ensure effective governance? Are the people and cultural aspects of achieving benefits given sufficient weight beyond the immediate programme boundaries? Do programme plans incorporate organisational change management activities? Are the skills and processes available for learning and applying Benefits Management principles, for example, through knowledge management and skills transfer? Is the realisation of each key benefit subject to regular review and update? Is measurement aligned with project stages (e.g. OGC Gateway Reviews or trajectories) as part of established governance framework? Are leading indicators used as well as historical measurement? Is there willingness to intervene with corrective action, or, if necessary, to close down projects if benefits are not being achieved or on track? Are key benefits prioritised? Are dis-benefits identified and planned for? Do the Benefit Profiles provide sufficient and standardised detail to inform prioritisation decisions across an organisations portfolio? Is Risk Management integrated with Benefits Management? Are risks to benefits actively reviewed as part of the Risk Management and Issue Resolution process and is this aligned with corporate Risk Management? Is Benefits Realisation cost effective?

MSP 4.4.3 MSP 4.10 MSP 12.2.13

No specific attention paid to organisational or cultural change requirements.

MSP 4.5 MSP 15.2.5

Each programme starts anew and no body of knowledge is available.

SDT Skills Framework Gateway 5 SDT Benefits workbook MSP 4.4.9 MSP Ch 8 AE8 Improving performance

iv. Realising the Benefits

Measurement takes place too late in the cycle and does not enable remedial action. No actions to adjust or improve delivery of benefits and no ongoing reassessment of the Business Case and the Benefits Realisation Plan. Measurement is ad hoc. Potential dis-benefits are not recognised or mitigated.

A common approach is used with assumptions detailed and any deviations from recognised good practice recorded. The process for managing risks and resolving issues highlights risks to benefits as a major concern. Risks to critical benefits are visible as part of the corporate portfolio and business planning regime. Business Case sensitivity analysis is thorough and methodical.

The approach is inconsistent or based on a particular or proprietary methodology. Risk Management and Issues Resolution fail to treat benefits as critical concerns. The articulation of benefits is insufficiently robust and cannot reliably inform risk analysis or measurement of cost effectiveness.

MSP 15.2 MoR SDT Benefits Id and Structuring AE6 Risk & Value mgt

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Are measurements straight forward, linked to existing performance measurement systems - or is a new set or subset necessary e.g. benchmarking, surveys or balanced scorecard? Is in-flight measurement and adjustment feasible? Can benefits be directly attributed to PSA objectives or to policy trajectory tracking? Is the evidence for benefits clear and robust? Is it tracked appropriately so that the assessment can be made (including locally, departmentally and nationally)?

Good practice (maturity)

Benefits Management is part of the Evaluation Strategy with an agreed timetable and one that complements the existing performance management regime. Financial returns from benefits inform reprioritisation of the portfolio. There is clear alignment between strategic and project purpose. Evidence of benefits delivery aggregated from agreed sources as input to local, departmental or other wideranging criteria.

Work needed (not mature)

Inadequate baseline, ill-defined timescales, or over-engineered measuring systems. Lack of traceable contribution from individual project to organisational goals (e.g. PSA).

OGC guidance MSP 15.2 MSP App D HMT Green Book

Evidence of benefits delivery is not defined, identified or collected / collated. It is not robust or capable of validation.

SDT Benefits workbook Gateways

4. Key to sources of more detailed guidance MSP: Managing Successful Programmes MoR: Management of Risk SDT: Successful Delivery Toolkit AE: Achieving Excellence in Construction