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Policy statements in practice

Policy statement 1. Benefits are aligned to strategic objectives

A key component of the definition of benefits is that they are measurable improvements from investments which are perceived as positive by stakeholders and contribute towards strategic objectives. As such, it is important to establish a clear line of sight from strategic objectives through to investment benefits (and vice versa). Benefits from investments should be expressed in consistent terms that demonstrate their strategic contribution. Only investments which are properly aligned with strategic objectives should be prioritised (unless they are compliance related).

This means:

• There is a clear link between the individual benefits the investment is designed to realise and the strategic objectives they are contributing towards. Strategic objectives include quantifiable objectives captured in an agency or department’s corporate plans. Ideally, the benefits for digital and ICT-enabled investments should also be linked to whole-of-government digital and ICT strategic objectives such as the Data and Digital Government Strategy (DDGS) and the IOF Prioritisation Criteria. 
• The line of sight between strategy and benefits is demonstrated through benefits mapping techniques that explain how benefits are derived and how they contribute towards strategic objectives. 
   

Policy statement 2. Benefits are integrated into performance management

Wherever possible, benefits (and the measures used) should be integrated into the organisation’s operational performance indicators, individuals’ performance management processes, and contractor and professional service agreements.

This means:

• Existing agency performance measurement mechanisms are used in defining benefits, baselining, and monitoring performance where they are available. Where possible, data from existing ICT systems should be used.
• Benefits are reflected in the organisation’s key performance indicators (KPIs) such as budgets, headcounts, business unit targets, strategic and business delivery plans, etc.
• Realisation of benefits is linked to the personal performance objectives of key individuals, such as the Senior Responsible Official (SRO) and Benefit Owners. This ensures that individual responsibilities and accountabilities for benefit realisation and business change are clearly defined. 
• Realisation of benefits is linked to contractor performance agreements and professional service provider contracts (e.g. through value-based contracts) where appropriate.
• Benefit Profiles are owned by Benefit Owners and agreed by all key stakeholders.

Policy statement 3. Benefits are integrated into a project’s governance approach

Ownership and accountability are critical to effective governance. This statement aims to ensure that there is clear allocation of accountabilities and transparent reporting of performance. All benefits management activities should have clearly defined roles and responsibilities with documented agreement. 

This means:

• The project has established a robust governance structure that heavily integrates benefits management.
• Benefits realisation is a standing agenda item at all governance board/committee meetings (at all levels).
• Roles and responsibilities for all benefits management activities are clearly understood and documented.
• Individual benefit profiles are owned by Benefit Owners and agreed by all key stakeholders.
• Benefit variation protocols and procedures are clearly defined and include tolerance thresholds for forecast and actual benefit variances, and appropriate escalation protocols.
• Regular reviews of benefits realisation progress occur throughout and beyond project delivery.

Policy statement 4. Benefits are measurable, and evidence based

Benefits, by definition, must be measurable (or at the very least observable). Even benefits that are considered intangible can often be measured via qualitative measures and proxy indicators.

If benefits are not expressed in measurable terms, it is not possible to effectively demonstrate improvement. This also means it is not possible to baseline performance which substantially weakens the case for change.

This means:

• Identified benefits are specific, measurable, achievable, relevant, timebound, agreed, and attributable to strategic objectives (SMARTAA).
• Improvements are described using verbs that tend to be measurable (e.g. using MEDIC: Maintain, Eliminate, Decrease, Increase, and Create) as opposed to vague language (e.g. improve).
• Baseline and target measures are documented and supported by robust assumptions.
• Target levels for each benefit are clearly defined and documented. 
• Potential investment disbenefits are documented.

Policy statement 5. Benefits are owned by business units, not by the project

Benefits management is a collaborative effort between business sponsors, who own and are accountable for benefits realisation, and project delivery teams, who are accountable for project outputs and outcomes. 

The Benefit Owner is the individual accountable for the realisation of benefits. Accountability and responsibility for benefits realisation is key for successful benefits management. It is important that responsibility for benefits realisation remains within impacted business units, as projects are temporary and business units are permanent. 

This means:

• Each benefit has a benefit profile (or equivalent) that is endorsed by an accountable Benefit Owner. Re-endorsement of the benefit profile is necessary when the Benefit Owner changes.
• Benefit Owners hold permanent roles within the accountable business areas as opposed to temporary project delivery roles (or both). 
• Ideally, benefit profiles also include sign off from key stakeholders, such as the SRO and the Business Change Manager, to reflect that benefits realisation requires a joint effort between project and business teams.

Policy statement 6. Benefit dependencies are explicitly understood and recorded

Projects do not lead to automatic realisation of benefits. Benefits realisation depends on business change, which is facilitated by enabling products and services, with accountabilities for each clearly defined in Benefit Realisation Plans.

This means:

• A benefits map is developed collaboratively with stakeholders to identify the benefits of the investment and how project outputs/deliverables combine with business changes to realise the benefits. Ideally, they also distinguish between intermediate and end benefits.
• Dependent business changes are captured as milestones and integrated into project management plans and relevant artefacts.
• Project change management functions are integrated with benefits realisation planning so that appropriate business change management activities are planned.

Policy statement 7. Agencies that deliver projects adopt a benefits-led culture and approach to change

The purpose of investment is to realise benefits and, as such, all change should be benefits-led. Additionally, there needs to be a shift from a delivery-centric culture, where the focus is on delivering capability to time, cost and quality standards, to a benefit-centric culture, where the primary focus is on delivering value from investments.

This means:

• Benefits realisation has the full commitment (not just curiosity or interest) of senior management.
• Projects are created for the purpose of realising the required benefits rather than benefits being used to justify a pre-selected solution. 
• Investments clearly articulate the strategic benefits to be realised and the drivers for change (the problem). This will inform the project scope and minimise investment in projects that do not contribute to strategic goals.
• Early realisation of benefits is a priority, even for long-term projects.
• Incremental and modular approaches to program delivery are adopted, with quick wins being used to generate enthusiasm for the project.
• Benefits are seen as a continuous activity whereby the benefits realised and reviewed by one investment should provide valuable lessons learned and determine the starting point for similar future investments. 
• There is an emphasis on looking for emergent benefits throughout the investment lifecycle.

Policy statement 8. Benefits management activities are integrated into project management activities

Benefits management must be fully integrated into project management activities to ensure project management decisions and reporting remain focussed on benefits. Benefits should not be treated as incidental to, or naturally resulting from, project management activity.

This means:

• Benefits are prominently featured in project status reporting and as a standing agenda item at all governance board/committee meetings (at all levels).
• Benefit dependencies that are identified in the benefits map are incorporated into project, risk and change management plans with accountable owners. 
• Appropriate resourcing is set aside for benefits management activities. 
• Benefits are integrated into communication and stakeholder engagement plans to ensure alignment of messaging.

Governance

Roles and Responsibilities

Clearly defined roles, responsibilities and accountabilities are fundamental to effective benefits management. 

Some of the key roles in benefits management may include:

• Senior Responsible Official (SRO): the individual who is accountable for the overall success of the project and optimising benefits realisation
• Benefit Owner: the individual responsible for the realisation of a specific benefit. The Benefit Owner must hold a business as usual role in the organisation (as opposed to a project delivery role) as projects are transient and benefit ownership extends beyond the life of a project.
• Project/Program Manager: the role responsible for day-to-day management of the project and the coordination of change activities (in collaboration with the Business Change Manager) that enable benefits realisation.
• Business Change Manager: the role responsible for benefits management activities, preparing benefits management documentation, and embedding business change. The role is the link between the project and the business.

Note: these are roles and do not necessarily reflect job titles. The roles should be scaled to the size and complexity of the investment. For example, larger investments may have multiple Business Change Managers, or Benefits Managers may be used to support benefits management activities on behalf of these key roles. Irrespective of size and complexity, there should ultimately be a single SRO that has overall accountability for the realisation of investment benefits, and a single owner for each benefit.

Benefit Change Control

A key challenge of benefits management is the ability to trace benefits realisation back to the investment decision (i.e., business case), which is critical in evaluating the success of an investment. To overcome this challenge, it is important to document a baseline, review the baseline at critical benefit milestones, and document variations to expected benefits.

Changes may occur for several reasons including changes in project scope, changes to project schedule, and emerging risks and issues.

When considering project changes, the impact on benefits must be considered. This requires benefit variations to be integrated into project governance mechanisms for appropriate consideration, buy in and approval. All benefit variations must, at a minimum, be signed off by the SRO and Benefit Owner.

References

1. Jenner, S and APMG International, 2014, Managing Benefits: Optimizing the Return from Investment, The Stationery Office.
2. DTA analysis on the performance of the whole-of-government Digital and ICT Portfolio.

Stages of the lifecycle

Identify

In the Identify stage, potential benefits are identified and prioritised. The objectives are:

• Understand the issues and opportunities that are driving the need for change. 
• Consider these drivers together with strategic objectives to guide the identification of potential benefits and disbenefits.
• Prioritise the most achievable benefits and quantify them (consider applying the 80:20 rule).
• Map the benefit dependencies that enable benefits realisation.
• Capture baseline levels of current performance.
• Identify and validate benefits with potential Benefit Owners.

Analyse

In the Analyse stage, benefit forecasts are refined, benefits are valued, and options are assessed. 

The objectives are:

• Further refine, validate and challenge benefit forecasts, and document any associated assumptions.
• Value benefits in monetary terms where possible to provide a consistent basis for assessing different options.
• Appraise the different options through techniques such as cost-benefit, cost-effectiveness, and multi-criteria analysis.
• Analyse benefit confidence and conduct sensitivity analysis.

Plan

In the Plan stage, mechanisms are put in place to document, realise and monitor benefits. 

The objectives are:

• Further refine, validate and challenge benefit forecasts. Document associated assumptions.
• Confirm Benefit Owners, finalise roles, responsibilities, and governance arrangements.
• Record benefit dependencies and milestones in project plans.
• Seek out, identify and capture emergent benefits.
• Plan stakeholder engagement and communication.
• Document benefits management planning in benefit maps, benefit profiles, and benefits realisation plans. 

Note: Benefits management documents, like business cases, capture ‘point-in-time’ requirements. However, these documents are live artefacts that must be regularly updated to reflect change throughout the investment lifecycle.

Monitor and realise

In the Monitor and Realise stage, benefits management remains central to investment delivery.

The objectives are:

• Seek out, identify and capture emergent benefits.
• Manage benefit variations via governance arrangements and change control mechanisms.
• Report periodically on benefits realisation progress and take corrective action where required.
• Implement business change management processes to ensure successful benefits realisation. This includes training and development, business process re-engineering, and/or staff redeployment. 
• Adopt behavioural change strategies to maximise benefits.
• Formally handover responsibility for benefits realisation, optimisation and monitoring to Benefit Owners at project closure.
   

Review

The Review stage assesses the degree to which benefits are, or will be realised. Review occurs before, during, and after investment completion.

The objectives are:

• Conduct internal and independent reviews at key project and benefits management lifecycle milestones, including project stage gates, to assess the progress, delivery risk and realisation of benefits.
• Capture anecdotes and success stories that demonstrate success of the investment.
• Capture lessons learned and share with future investments.
• Continue to monitor and report on benefits realisation.