Benefits Management

Projects are done to achieve benefits. Benefits are planned and managed by the portfolio office to achieve the organization’s strategy. It should be noted that this practice does not concern benefits from individual change initiatives but the project as a whole.

This practice is part of the Portfolio Delivery Cycle.

Purpose

All change initiatives are done to generate benefits. Benefits that are realised from projects and programmes contribute to the achievement of organizational strategy.

Implementing

The following activities form the portfolio benefits management practice:

• Creating benefits eligibility rules and categorization criteria:
  • Each project and programme may result in more than one benefit Benefits should be categorized across all projects in the same way, so that every project or programme uses the same criteria to assess benefits. And at the end, the portfolio office can consolidate all of them in to one, for presenting a portfolio-level view.
  • Benefits eligibility rules are created to define the way benefits are documented and managed. Categorization is one part of benefits eligibility rules. Benefits eligibility rules must be in place to quantify the value of the benefits and validating them, after the project or the programme starts accumulating benefits.
• Creating a benefits realization plan at the portfolio-level:
  • Every project or programme manager will need to plan the benefits realization of their own change initiative. The portfolio office will put it all together and create a forecast of benefits for the future planning periods. It is important to note that this is not merely putting all the benefits together.
• Forecasting benefits:
  • The portfolio office also has the capability of making reliable estimates of future benefits, based on how the organization has been performing in the past. The portfolio office can use reference-class forecasting to create a forecast based on past-performance.
• Reviewing benefits at each stage:
  • The portfolio office will have a consolidated list of benefits. They should be regularly reviewed. This is to understand whether the accrued and future benefits are in line with the strategic goals. This review is carried out with the executives and can be used as an opportunity to renew the commitments of the senior management, to the portfolio.
• Reporting and Tracking benefits:
  • Our main aim is to enable the organization to reach its strategic goals. Projects and programmes create benefits. Benefits are the building blocks to reach the organization’s strategy. A uniform mechanism to track and report benefits will ensure nothing is slipped. When reporting information, it is also important to stick to a planned route and a reporting schedule. This will ensure stakeholders receive “one version of the truth”.

Keys to Success

Reference class forecasting enables benefits to be estimated using information from past projects and programmes. When reporting, it is essential that the audience should only receive one version of the truth. A pre-planned route and a schedule for sending updates will be helpful to achieve this.

Written by Inham Hassen

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