Anyone who has managed a top-secret project will appreciate the sense of frustration with developing a product, service or result without having any idea what the deliverable was ever used for. Even in more open environments, Project Managers often have only the vaguest idea of how their deliverables contribute to the bigger picture.

On this page:

• Introducing the Benefits Breakdown Structure
• Unveiling the Components of the Benefits Breakdown Structure
• A Worked Example of the Benefits Breakdown Structure
• Identifying the Necessary Deliverables
• Conclusion and Further Learning

Introducing the Benefits Breakdown Structure

It is interesting then to understand how the organization’s overall strategy relates to the deliverables from all the projects it has commissioned. The concept connecting the two is that of the “benefit” and the way to see the connection is to study a useful technique called the Benefits Breakdown Structure. In the same way as the Work Breakdown Structure and the Resource Breakdown Structure work, this has one of the organization’s strategic objectives at the top and it breaks this down into a set of benefits that it expects from the work it will carry out to achieve the objective.

Unveiling the Components of the Benefits Breakdown Structure

Benefits, in turn, are composed of project “outcomes”. This is a more abstract concept than a deliverable. For instance, your project might be to introduce a CRM system to the company and ensure all client details are added to the system. The deliverables are a fully populated database and a trained sales team, but the outcome is better management of the sales process.

The below outcomes are the “actions” that are needed to realize the benefits. These are essentially the work that needs to be done to obtain the outcome. In other words, they are the programs, projects and other work that are needed to produce the outcome.

Finally, these actions break down into “deliverables”. If you are unaware of the high-level outcome of your project, then this perspective means that your projects only contribute to level five of the Benefits Breakdown Structure – no wonder it is so hard to see the big picture! Speaking of pictures, the generic Benefits Breakdown Structure looks like this:

A Worked Example of the Benefits Breakdown Structure

Abstract concepts are all very well, but a worked example is really needed to put these ideas on a tangible footing. Suppose we have a manufacturing facility that is not performing well and we decide to do something about it. So the overall vision for our efforts is to bring Facility X back into profitability. Our mission – how we intend to realize the vision – is to develop new products, increase marketing efforts and cut costs.

However, one of the ways we plan to cut costs is by automating some of the production steps, which will lead to layoffs. So a strategic objective is to achieve these layoffs without causing a union dispute. It is easy to see the benefits of such a strategy: lower costs and no industrial unrest. So, what outcomes do we need to provide the benefit of no industrial unrest? Clearly, some sort of agreement needs to be put in place with the union, that is acceptable to its members. If we cannot get this agreement, we will likely see strikes and other industrial action.

Now we need to determine the actions needed to achieve the outcome of an agreement with the union. We need to engage with the union before we start implementing any other improvements to Facility X.

Identifying the Necessary Deliverables

What deliverable does our engagement project need to produce now to help achieve an agreement with the unions? The obvious one is an attractive redundancy package. Often older workers are the most resistant to change, so a programme of voluntary redundancies could also contribute to other strategic objectives, such as overcoming resistance to change when new work practices are introduced.

Conclusion and Further Learning

This example becomes a lot clearer when presented as a Benefits Breakdown Structure:

To understand how to create such a breakdown structure, it is useful to remember the following: Items at the lower level should answer a “how” question of the upper level and items at an upper level should answer a “why” question of the lower level. For example: how will we obtain a union agreement: By engaging with the unions early. Why do we need an agreed redundancy package: To have something to negotiate with at the union meetings.

If you are interested in learning more about benefits management, Velopi provides two courses in program management: Program Management Essentials and  Program Management Professional (PgMP)® Exam Preparation. To learn more please get in touch.