Project Management: A Benefits Focus

10 July, 2014

Project Managers tend to think in terms of deliverables. The overall scope of the project involves carrying out tasks that result in a unique product, service or result. At the end of the day, the project will be deemed a success or failure based on what is delivered. The Project Manager may have come in ahead of schedule, under budget and achieved high-quality ratings but if the product, service or result does not meet the customers’ expectations, then that project will not be considered a success.

At the program-level, Program Managers agonize about benefits. So important are benefits to the program that the program lifecycle is divided into three parts – Program Definition, Program Benefits Delivery and Program Closure. Program Benefits Delivery is by far the biggest and most costly part of the program.

Project Managers can also learn from having a benefits focus. It is a useful perspective because it allows the Project Manager to consider more abstract ideas than just tangible deliverables. By focusing on the benefits accruing from the project, the project manager can better understand the stakeholder expectations that lie behind the clinical requirements.

For instance, a typical project might be to replace several, independent IT systems with a single, unified solution. If the Project Manager has a deliverables focus, then s/he will be looking at demonstrating to senior management that the new system has successfully replaced the old system and every one of the existing functions is now available on the new system.

However what are the benefits of such a project? The new IT system is incidental; the goal of the project is to reduce costs! How is that achieved? Because there is now only one system to maintain, we will only require one maintenance contract and we will only require people skilled in that particular system. But will that single maintenance contract cost more than all the others? Will the people skilled in the new system have to be of a higher skill level than before? How long will it take to train the users in the new system? Will there be resistance to the new system? Could productivity fall because of the change?

A focus on benefits will reveal more requirements, but it will also highlight more risks – the user acceptance consideration being an obvious one. This can be mitigated by proper stakeholder engagement with the user base, a consideration that might not have occurred to a deliverables-focused Project Manager.

Benefits are tricky because, unlike requirements, they might not be measureable or testable. In essence there are four broad classifications for benefits:

  1. Tangible, financial benefits: These are the most obvious ones. They relate to increased revenue (“We are adding these features to our product so that we can reposition it in the ‘prestige’ market and earn higher profits”) or reduced costs (“By automating this process, we can reduce our workforce by 20%”).
  2. Tangible, non-financial benefits: These are benefits that can be assessed through metrics, but are difficult for a Project Manager to put a financial value on. We are considering outcomes such as: a better quality of service (measured by seeing fewer customer complaints), lower staff turnover and productivity improvements.
  3. Intangible, financial benefits: These are factors that have an impact on the bottom line, but are virtually impossible to measure. Improved staff morale is one such benefit - a happier workforce will provide better customer service. An improved corporate image is another one. It is difficult to relate an increase in sales to a decision to use green energy at a facility. The media is very fond of debating the country’s competitiveness, but is being competitive about having lower costs, or is it about having better quality? Are you competitive because your country’s currency is weak or is it because import tariffs are discouraging imports?
  4. Intangible, non-financial benefits: These are really not obvious. The textbook examples are patents and trademarks.  While these are clearly tangible, their benefits are not. Owning the patent for a clever tweak to the telex machine, or for a new, improved vinyl record stylus, will certainly not be of any benefit. Similarly, a registered trademark is useless if it does not have brand recognition. In a way, these are similar to regulatory conformance – you need them to be in the marketplace but it is difficult to see what they directly contribute to the business. However, if the company is for sale, these assets may attract more interest than the business itself.

For front-line Project Managers, an awareness of benefits will help when engaging with senior stakeholders. Instead of focusing solely on how the project is tracking in terms of scope, time, cost and quality, consider how the world will be a better place when this project is finished. Remember what sales people are taught on their first day: sell the sizzle, not the steak.

Velopi is currently developing courses in program management, up to and including PgMP® (Program Management Professional) certification. If this is an area that is of interest to you, then please get in touch – we are looking forward to explaining the benefits taking such a course will bring to you.

By Velopi Seamus Collins

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