Benefits Management – An ‘Idiot’s Guide’
Benefits are the rationale behind investments in change,
“The fundamental reason for beginning a programme is to realise
benefits through change. The change may be to do things differently,
to do different things, or to do things that will influence others to
change.” Office of Government Commerce (OGC)
“It is only possible to be sure that change has worked if we can
measure the delivery of benefits it is supposed to bring.” Cabinet
Office
and benefits are,
“The quantifiable and measurable improvement resulting from an
outcome which is perceived as positive by a stakeholder and which will
normally have a tangible value expressed in monetary or resource
terms. Benefits are expected when a change is conceived. Benefits
are realised as a result of activities undertaken to effect the
change.” OGC
The aims of Benefits Management are,
“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.” OGC
The Benefits Management process is built on:





Articulation and quantification of
the benefits in a Business Case.
The use of cost-benefit appraisal
– all costs and benefits should be
valued wherever possible and
NPV is the preferred decision
criterion.
Identification of benefits in
Benefits Maps, Benefit Profiles
and a Benefits Realisation Plan.
Tracking and reporting of benefits
realised against forecast.
Post-implementation review of
benefits realisation.
Enablers
Source: Stephen.Jenner5@btinternet.com
Business
Changes
Impacts
Business
Benefits
Strategic
alignment
Reduced period
from arrest to
sentence
Courts have a
quicker change
over between
cases due to the
increased
immediacy of
prisoner
availability
Agree which
hearings can be
heard via video
link
Implement
Pilots
Distribute Best
Guidance
documentation
Increased
Bandwidth
Best Guidance
documentation
The only problem with this approach is…
…it doesn’t work!
Enabling
Changes
Tailor the best
guidance
documentation to
become local best
guidance
Increased number
of hearings via
video link
Negotiation of
replacement
Martin Dawes
Contract
Develop a national
monitoring regime
to monitor actual
usage compared
to potential usage
Monitor usage
locally
Identify Local
barriers to use
Reduced number
of late arrivals at
court
Reduced number
of adjourned
hearings
Reduced need to
transport
prisoners between
prison and court
Reduced security
risk in prison –
civilians don’t
need to go into
prisons (e.g.
defence interviews
PSA 24 (Deliver a
more effective,
transparent and
responsive
Criminal Justice
System for victims
and the public) –
Indicator 1 –
Increase the
efficiency and
effectiveness of the
CJS in bringing
offences to Justice
Reduced number
of delayed
hearings
Potential to
reduce the cost of
the PECS contract
Reduced admin
effort to book
prisoners in/out of
prison
Environmental:
Reducing
movement of
prisoners means:
i) less vans on the
road
Ii )Reduces Carbon
Footprint of CJS
Reduced time
spent by prisoners
in transport
Reduced admin
effort to book
defence solicitors
into prison
Less disruption to
a remand
prisoners regime,
including the
provision of health
and education
services
Supports Prison service
Decency agenda Less time in
cramped prison vans
Less disruption to ongoing
programmes (drugs rehab,
education, skills training, etc)
Less disruption to prison life
(moving property, keep own
cell, etc)
These issues are exacerbated
for female and youth prisoners.
Investment Objectives
Benefits Dependency Network
Prison to Court Video Links
Improve the efficiency and effectiveness of the CJS by
reducing the need to transport prisoners from prison to court,
reducing prisoner transport costs, reducing the number of
adjourned hearings due to late arrival at court and
contributing to the prisoner Decency Agenda.
“Deficiencies in benefits capture bedevils nearly 50% of government
projects.” And “30-40% of systems to support business change deliver
no benefits whatsoever.” OGC
“Most large capital investments come in late and over budget, never
living up to expectations. More than 70% of new manufacturing plants
in North America, for example, close within their first decade of
operation. Approximately three-quarters of mergers and acquisitions
never pay-off…And efforts to enter new markets fare no better”
Lovallo and Kahneman
“project success appears to equate to achieving an acceptable level of
failure or minimising lost benefits.” KPMG
“a large proportion of recent mega-projects fail any reasonable benefitcost test.” Altshuler and Luberoff
The problems identified above are partly due to non-compliance with
recommended practice, but the roots of the problem run deeper, far deeper,
“There is a demonstrated, systemic tendency for project appraisers to
be overly optimistic. This is a worldwide phenomenon that affects
both the private and public sectors…appraisers tend to overstate
benefits, and underestimate timings and costs.” HM Treasury
and Nobel prize winning Daniel Kahneman refers to,
“Delusional optimism: we overemphasise projects’ potential benefits and
underestimate likely costs, spinning success scenarios while ignoring
the possibility of mistakes.” Lovallo & Kahneman
and Bent Flyvbjerg, Chair of Major Programme Management at Oxford
University, and co-author of the largest ever study of public sector
infrastructure projects worldwide, concluded that estimates were,
“highly, systematically, and significantly misleading (inflated). The result
is large benefit shortfalls.” And the cause is, “the planned, systematic,
deliberate misstatement of costs and benefits to get projects
approved.” In short, “that is lying”.
So…more than an ‘Idiot’s Guide’, we need a ‘Fool’s
Guide’*…
* as with the medieval jester – someone independent, objective and brave enough to
challenge the ‘assumptions that masquerade as facts’ in our business cases.
Source: Stephen.Jenner5@btinternet.com
Benefits Management – A ‘Fool’s Guide’
There are three challenges if we are to optimise the return from our
investment of taxpayers’ money.
Challenge 1 – Fight ‘benefits fraud’, ensuring benefits
claimed are robust and realisable by:





Ensuring business cases treat benefits consistently by using a
Benefits Eligibility Framework.
Use evidence-based/reference class forecasting.
Validation of the benefits with the recipients.
Ensuring you understand ‘the benefits you are buying’ – use
Investment Logic Mapping
Independent review – benefits management is truly a ‘fool’s’ errand!
Investment Logic Map: Improving Business Cases
Strategic
Drivers
Economic climate
reflected in the
Operational Efficiency
Programme – need to
deliver significant
efficiency savings
Need to improve
prioritisation of
available resources
We produce
credible, evidencebased Business
Cases that provide
a clear line of sight
from strategic
intent through to
benefits realisation.
This will enable:

Improved
prioritisation and
allocation of
MoJ's available
investment (of £,
people and
management
attention) in
change;

 Poorly defined
business cases
Better delivery of
MoJ's DSO's; and

Demonstrably
better use of
taxpayer's money.

Intermediate
Benefits
Increased benefits
realisation in terms of
delivered efficiency
savings
Policy into Delivery
findings include:
 Lack of corporate
guidance/process
 Benefits not defined,
documented or properly
tested/agreed
End Benefits
Vision
Quicker
production of
project
documentation
in consistent
formats
Savings in
production of
business cases
Increased benefits
realisation in terms of
strategic impact
A more balanced
portfolio
Improved on time
delivery of change
initiatives
Improved delivery of
change initiatives
within agreed
budgetary envelope
More reliable,
evidencebased
forecasting
Improved
management
decisionmaking
Shared
understanding
of what good
looks like
A level playing
field for
investment
appraisal and
portfolio
prioritisation
Reliable
baselines for
monitoring
delivery and
taking
corrective
action where
required
Solution /
Initiatives
5 workstreams –
Culture, Benefits,
Challenge & Review,
Compliance, Training
& Development.
• Change Strategy
• Clear Business
Change Lifecycle
from start up to
evaluation
• Consistent Benefits
Guidance
• Training &
Development,
Stakeholder
engagement plan
• Clear standards for
review and appraisal
• Std measures of
Atrractiveness and
Achievability
• Investment
Summary Template
• Consistent
approaches to project
costing and financial
planning
• Templates
And support this analysis with a suite of metrics to evidence and
influence benefits realisation – measures, indicators, case studies
and evidence events.
Source: Stephen.Jenner5@btinternet.com
Challenge 2 - Going beyond the hurdle rate of return
to plan for the realisation of all potential forms of
value.
Political
8
2 Develop
2 Develop
Community-based
Community-based
solution
solution
1 Re-engineer
1 Re-engineer
Project
Selection
Selection
&Project
Development
& Development
6 Improved
6 Improved
collaboration
collaboration
with
with
stakeholders
stakeholders
8
3
6
4
4 More integrated
4 More
integrated
state
direction
state direction
7 Reduced time
7 Reduced
time
for service
delivery
for service delivery
1
3 Transportation
3 Transportation
balanced
with
balanced
with
other
liveability
other
liveability
factors
factors
11 More
11 More
effective
effective
leadership
leadership
8
10 Better
10 Better
skilled
skilled
& equipped
&
equipped
people
people
2
5 Human
5 Human
Resources
Resources
organisation
organisation
development
development
4
8
4 Oregon
4 Oregon
Transportation
Transportation
Initiative
Initiative
1 Improved
1 Improved
community
community
liveability
liveability
2 Improved total
2 Improved total
transportation
transportation
experience
experience
8 More effective
8 More
effective
public
investment
public investment
3
3
2
6
0
4
1
8 Higher
8 Higher
quality
quality
solutions
solutions
4
2
1 Balanced with
1 Balanced
with
growth,
revenue
growth,
revenue
base
& needs
base & needs
3 Enhanced
3 Enhanced
economic
economic
opportunity
opportunity
Foundation
Identi
Effectiveness
9
9
3 Deploy
3 Deploy
maintenance
maintenance
strategy
strategy
Efficiency
2 Community
2 Community
Prepared
to
Prepared
to
adapt
behaviour
adapt behaviour
5 Established state
5 point
Established
of view state
point of view
9
7
Social
fy
Project
X
Project
K
Project
O
Project
Z
Project
Y
Qualif
y
Project
H
Project
M
Project
N
Value
Invest
igate
Project
J
Project
P
Comm
it
Project
F
Project
A
Live Projects
Project
D
Project
C
Project
E
Project
B
Project
Q
Project
L
Opportunity domain
Cross department
Cross CJS
Intra CJO
Categories of Value
Challenge 3 - Realising benefits and creating value,
exploiting the capability created by:







Tracking benefits with a ‘clear line of sight’ from forecast to
realisation – to ensure that ‘performance matches the promise’.
Utilising metrics that influence behaviour.
Realigning the reward and recognition strategies to focus on value
creation.
Continuous Participative Engagement – as Benko and McFarlan
say, people walk, “into the future backward, viewing the future
through the lens of their past experiences.”
Managing benefits from a Portfolio or Enterprise, rather than a
project, perspective.
Real post-implementation reviews with a hunger for learning.
And so…
Shifting the emphasis from:
- Optimism in planning and Pessimism after
implementation
To
- Realism in planning and Enthusiasm after
implementation.
Source: Stephen.Jenner5@btinternet.com
But does this work?
"'Realising Benefits from ICT - a Fool's Errand?' should be read by anyone
interested in understanding the follies of major ICT programmes and in
learning how better management of benefits realisation is key to getting ICT
investments back on track. Stephen Jenner's focus on causes and cures of
'benefits fraud' is highly original.”
Bent Flyvbjerg, principal author of 'Megaprojects and Risk: An Anatomy
of Ambition' and Chair of Major Programme Management at Oxford
University.
"Jenner provides very credible guidance and methods on ICT project value
realization in the public sector. This book is timely, practical and a very
good primer on contemporary "best practice" thinking in both the public and
for-profit sectors. The big question is: will public sector managers and
executives have the "will" to put the book's prescriptions and methods into
everyday practice with ICT Projects? The value of taxpayer services and
contributions depends on their response."
Donald Marchand, Professor of Strategy Execution and Information
Management, IMD
“Rich in case studies and research from industry and academia, this highly
accessible text makes a significant, practical and authoritative contribution to
portfolio management at a period when the Government’s focus on effective
realisation of appropriate benefits places PPM professionalism at the heart of
its agenda.”
Andrew Bragg, Chief Executive, Association for Project Management
“Stephen’s book demonstrates a much broader understanding of the power of
value-led portfolio management than the project label implies – in today's
world of IT-enabled change he recognizes the need to continually manage the
relationship between investments, programmes of change and “traditional”
projects. Implementing effective value-driven portfolio management is a
journey – realizing value from programmes of change is also a journey – this
book provides a rich and practical guide for both journeys. Don’t set out
without it!”
John Thorp, author of ‘The Information Paradox’
The real question is are you, as Shakespeare says in Twelfth
Night,
"wise enough to play the fool“?
Source: Stephen.Jenner5@btinternet.com
Active Benefits Realisation Management – 10 Key Steps
1. Spend more time doing your homework - be clear about what benefits
you are buying. The Business Case should be preceded by an
Investment Logic Map with clarity about how benefits will be evidenced.
2. Triangulate and Validate – book the benefits in budgets, headcount
limits and performance targets.
3. Look beyond the hurdle rate for investment – capture all potential
benefits otherwise value just drifts away.
4. Track performance and use it to inform forecasts – use reference class
forecasting and formative post implementation review.
5. Use Stage/Phase ‘Gates with teeth’ with formal re-commitment to the
benefits case.
6. Joint accountability - planning for success, with a forward looking
perspective.
7. Use summary documentation – size is the enemy of understanding.
Ensure there is a ‘clear line of sight’ from strategic intent through to
benefits realisation.
8. Manage benefits from an enterprise or portfolio perspective – so there’s
a clear line of sight on what benefits the organisation will realize from
its accumulated investment in change.
9. Continuous participative engagement to capture and disseminate
emergent benefits. Employ measures that engage the user in value
creation.
10. Dare to ask ‘foolish questions’ – to identify those assumptions that
masquerade as facts.
Want to know more? See ‘Realising Benefits from Government ICT
investment – a fool’s errand?’ available from www.academic-publishing.org;
and ‘Transforming Government and Public Services: Realising Benefits
through Project Portfolio Management’ published by Gower
Or contact me at Stephen.jenner5@btinternet.com
Source: Stephen.Jenner5@btinternet.com