Are you and your organisation realising and understanding project benefits as a matter of course? I suspect that one of the reasons that project benefits are sometimes hard to come by may be that we’re not really clear about what they are.
Developing a better understanding of project benefits
One simple way of identifying and measuring the maturity of a science or discipline is the degree to which its relevant components are recognised and classified. If I see a plant or animal, I can be pretty confident that its like has been seen before. Someone has taken the trouble to enter it in the relevant taxonomy, and describe it so that it can be confidently distinguished from similar, but different, plants or animals.
So, how are we doing understanding project benefits?
One reason that project benefits are hard to come by is that we’re not really clear about what they are? Pretty well, I think, except for one glaring exception – benefits. The definitions of other concepts (risks, assumptions, constraints, stakeholders, etc.) permit the practitioner to analyse confidently and respond with an effective management action. But benefits? “An improvement [some qualification typically mentioning stakeholders and/ or organisational objectives]”. Let’s say I see a barred grass snake. My liking for, and interest in, snakes is irrelevant to its being a barred grass snake.
This lack of a really good definition of what a benefit is seems to me both understandable and highly culpable. Understandable, because benefits are generally realised in operational areas and not within projects. So, to some extent not the project manager’s most important problem. But also highly culpable, because the only reason for running many projects is to realise benefits. It appears, in some cases, that any improvement will do as long as someone likes it. Beauty (or in this case benefits) being in the eye of the beholder strikes me as being the perfect justification for white elephant / sacred cow projects. Everyone except the beholder knows these are just wrong and a waste of time, effort, money and a lost opportunity.
So, why aren't improvements necessarily benefits (given that benefits are definitely improvements)?
The answer is that improvement must be apparent (and measured) at the end of an organisational end-to-end process. This can’t be during an intermediate stage. Let’s say I save £5 per unit on step four of a nine-step manufacturing process. However, each of the subsequent steps costs £1 more as a consequence. There’s no benefit, despite the improvement in step four.
For ease of understanding project benefits (and, indeed, measurement), I used a financial example in the previous paragraph. Which brings me to another thing about some definitions of benefits that makes me uncomfortable. “…normally have a tangible value, expressed in monetary terms…” I have a suspicion that this tends to emphasise financial benefits (of course there’s nothing wrong with financial benefits – reasonably easy to measure and very easily compared) over non-financial improvements which are often more difficult to measure and almost impossible to compare.
That last part is where, I think, the mention of stakeholders in the definition of understanding project benefits comes in. Given a choice of more opportunities (programmes, projects and line initiatives) than available resources can address, management will have to decide which one(s) it values most. In selecting between a cost-reduction project and a new product project for which the costs and benefits are numerically identical, the fact that the economy as a whole is expanding rapidly might make us choose the new product (which will increase income). Whereas if a recession seems to be looming, the cost-reduction project might seem much more attractive.
So, it turns out, there remain three species of snake indigenous to the UK (but one has a new name). How many species of benefit are there.