PRINCE2 templates – benefits management approach

My AXELOS has created a series of templates covering the breadth of activities the PRINCE2 practitioners will encounter. Here, change manager Mark Sutton highlights what’s important in the benefits management approach.

In PRINCE2, the benefits management approach defines the management actions and reviews you need to ensure that the project’s outcomes are achieved and benefits realized.

Having access to a template is a useful reminder of what we want to achieve, what’s important and provides a tried and tested method.

Above all, I believe the most valuable element is the thinking it stimulates for project managers. So, what are the various elements we should consider for benefits management?

1. Scope
This contains the benefits outlined in the business case and will be those the user community believe will be delivered by the project. You also need to know what benefits the organizational decision makers prioritize for investment. Anybody working on a project must know which benefits the organization prizes the most and the scope of user benefits must match.

The project manager should work with users to determine the benefits that users can realize if the project product has the correct characteristics to enable them to. This can involve a benefits discovery workshop, mapping benefits for users and giving them a voice in the project; the senior user will have the last word on what’s realistic.

2. Accountability
The senior user is held to account for realizing benefits among users while the executive needs to ensure benefits represent good value for money and are strategically aligned.

So, we define roles and responsibilities for who will track realization and report achievements and forecast benefits to project board members to illustrate if expectations are being met or not. Also, we need to consider what happens about performance tracking when the project finishes and the product’s use continues.

Whilst the project manager tracks overall project health, someone in business as usual (BAU) should be nominated to track the beneficial effect of using the project product. The project manager may deliver a product with all the characteristics requested by the users, but benefits are only realized if the users actually use it (often a factor of how well the BAU leadership is overseeing the user community’s response to the project product).

3. Management actions
Change management will help BAU using a new product to relinquish old ways of working and migrate to the “new world”. The senior user needs to plan this otherwise people won’t use the product and improvements won’t happen.

The project should summarize for the project board the progress reported by BAU in completing these change management activities and realizing benefits. Responsibility should also be allocated to manage any threat to benefits realization as part of the project’s risk management.

4. Measuring achievement
Is there existing performance measurement you can use to evaluate benefits and will it tell you whether the new product (rather than something else) has effected change?

Having a new product means there is a lag between its arrival and people using it willingly. Only then can you measure people’s unconscious competence with it and the resulting benefits.

If there are intermediate product releases, you can measure benefits before the project ends and also at the end of stages. Leading measures will show you whether you’re on track for improvements while “evidence events”, such as cutting the first sod on a new building project, are another option.

5. Resource requirements
BAU budgets and headcount are set based upon BAU’s estimate of what it needs to achieve its everyday objectives. Any disruption to BAU resources caused by a project needs to be funded by the project. This means funding or allocating resources to measure existing BAU performance and track changed performance and benefits realization once the project hands over to the users. It also means ensuring BAU has enough resource to minimize any dip in performance as it prepares for and migrates to the new ways of working and embeds the new product.

6. Baseline measures
What is the current performance? Sometimes the benefit represents an adjustment in an existing performance indicator, sometimes not. Whether you need to set up a new measurement or not, you need to measure current performance first. If you know that another project/programme will touch BAU before your product does, you need to adjust your baseline measure to account for that.

7. Arrangements for project product performance review
You need to agree what will happen among users once the project team has moved on.

The project board should ensure the “baton” for monitoring the benefits reported by BAU is passed elsewhere within corporate or programme management.

Beyond working with the PRINCE2 benefits management approach template, it’s worth considering that people tend to be optimistic about benefits and you might need to adjust the benefits forecast to account for over-optimism; clarify the need to apply this technique in the scope section.

Simplistically, if you see initiatives repeatedly achieving an outturn of only 80% of their benefits forecasts, encourage planners to offer a more realistic figure by adjusting initial estimates down by 20%.

PRINCE2 2017 templates are available to My AXELOS subscribers. Visit MyAxelos for more information.

Read Mark Sutton's previous AXELOS Blog Posts

7 essentials for a project, programme or portfolio dashboard

Starting a project with PRINCE2^®

Achieving the endgame: product-based planning in PRINCE2®

When Managing Successful Programmes (MSP®) goes back to school