Benefits Management: it works, so why isn’t everybody doing it?

Dr Richard Breese Senior Lecturer Sheffield Business School Sheffield Hallam University r.breese@shu.ac.uk John Thorp, President The Thorp Network Victoria, BC, Canada john_thorp@thorpnet.com Both Committee Members of the APM Benefits Management SIG

Outline of the session

Definitions

25 years of the development of Benefits Management

Evidence that BM works

Benchmarking the current position

Barriers to the adoption and embedding of BM, and possible solutions

Your questions

Terminology

Disbenefit

Capability

Critical success factors

Impact

Definitions

Benefit ‘positive and measurable impact of change', (APM Body of

Knowledge 6th Edition, 2012 p124)

Benefits Management ‘the identification, definition, planning, tracking and realisation of business benefits'. (APM Body of Knowledge 6th

Edition, 2012 p124)

Benefits Realisation Management ‘the process of organising and managing, so that potential benefits, arising from investment in change, are actually achieved’, (Bradley, 2010, ‘Benefit Realisation Management’, 2nd

Ed. p29)

Benefits Realisation Approach ‘A business oriented framework, supported by a set of processes, techniques and instruments which enables organisations to select and manage a portfolio of programs such that benefits are clearly defined, optimised and harvested'. (Thorp, 1998 & 2003, The Information Paradox)

Translation of benefits management as a ‘management idea’

The theoretical lens of translation is a way of examining and attempting to explain the spread of benefits management and the barriers to its adoption and embedding Translation focuses on the processes through which management ideas spread and influence management practice (Czarniawska and Sevon, 2005, Global Ideas: How Ideas, Objects

and Practices Travel in a Global Economy).

Translation emphasises the changes which occur to management ideas as they are spread, involving both actors (people) and objects (guidance and other forms of documentation)

Breese, R., Jenner, S., Serra, C., Thorp, J. (2015). Benefits management : Lost or found in

translation. International Journal of Project Management, 33 (7) pp1438-1451.

Stages 1 2 3 4

1980

1990

2000

2010

Consultancy, Training,

Research Key Players -

consultancies and universities

Incorporation into project

management and IS/IT

guidance Key Players - gov'ts

and professional bodies

Networks and maturity

models Key Players - diverse

Accreditation in BM Key Players – trainers and

educators

The layers and stages model of the

development of BM (Breese et al., 2015 (see previous slide))

Evidence that 'it works‘ (Recent studies)

‘Our results show BRM practices being positive predictors to project success on the creation of strategic value for the business ‘ Serra, C. E. M. and

Kunc, M., 2015, Benefits Realisation Management and its influence on project success and on the execution of

business strategies, International Journal of Project Management.

‘most organizations are missing major opportunities to add strategic value because they lack a formal and focused approach to benefits management’. PMI, 2016, ‘Pulse of the Profession’ report, The strategic impact of projects: identify benefits

to drive business results.

[organisations mature in benefits realisation] ...’are in a position to truly manage business value, even in the face of significant internal and external change and uncertainty’. Gartner, 2011. Benefits Realization: The Gift That Keeps On

Giving

BM helps organisations achieve their goals, gives a better chance of success

Evidence that 'it works‘ (Earlier studies)

“Managing IT from an investment perspective — with a continuing focus on

value, risk, cost, and benefits — has helped businesses reduce IT costs by up

to 30%, with a 2x-3x increase in value.” Source : Meta Group White Paper: The Business of IT

Portfolio Management: Balancing Risk, Innovation, and ROI. 2002

‘......organizations which are more successful at delivering benefits from their

IS/IT investment projects are more likely to have a comprehensive approach to

managing benefits from them’. Ward, J., De Hertogh, S., Viane, S., 2007. Managing the benefits from

IS/IT investments: an empirical investigation into current practice. Proceedings of the 40th Hawaii International

Conference on Systems Science.

“Companies with a business process-centric approach to delivering and

measuring value succeed - 73% realize value on time or early” Source: ASUG/SAP

Best Practices Survey, SAP Analysis, February 2008

BM helps organisations achieve their goals, gives a better chance of success

Poll – ‘where are you at’ in BM

Which one of the descriptions below most closely describes the overall state of benefits management (BM) in your enterprise? 1. Limited - focus on cost & delivery of investments 2. Awareness - ad hoc with no formal approach 3. Understanding - BM reqt’s documented for all investments 4. Commitment - roles, responsibilities and accountability accepted 5. Institutionalized - benefits management is part of the culture

APM Benefits Management SIG

Response 2014

(%)

n = 44

2015

(%)

n = 57

Benefits management is very relevant to the key challenges facing

my organisation in using P3M to achieve its goals

66% 69%

Benefits management fits quite easily or very easily into the way

that my organisation undertakes P3M.

47% 31%

There is a consensus throughout or in most parts of my

organisation that benefits management should be an integral part

of P3M.

43% 38%

My organisation finds benefits management to be very useful or of

some use in practice in improving the contribution of P3M to

organisational goals

65% 56%

There is a strong or very strong benefits focus in the wider

approach to management in my organisation, from strategy to

operations

36% 24%

Surveys, 2014 and 2015 https://www.apm.org.uk/news/bm-survey-2015

Poll –’ what is working’ for you

Which of following have been effective in your organisation in moving BM forward? (Tick all that apply) 1. Senior management “walk the talk” 2. Workshops or other stakeholder engagement processes 3. Benefits modelling/mapping 4. Complete and comparable business cases 5. Taking a portfolio view

What issues would facilitate adoption and implementation of benefits management of IT investments in Norwegian municipalities?

Factors were identified as

1. ease of use, 2. straightforward results, 3. clarity of goals, 4. clear responsibilities to conduct benefits management 5. inter-professional co-operation for realizing benefits in municipalities. The main issues were perceived to be cultivating an organisational culture towards BM, organising the BM process how to choose appropriate methods and tools.

Paivarinta, T., Dertz, W., Flak, L.S., 2007. Issues of Adopting Benefits Management Practices of It Investments in

Municipalities: A Delphi Study in Norway. Proceedings of the 40th Hawaii International Conference on System

Sciences

Factors influencing the adoption and effectiveness of BM

Factors which influence the adoption of BM, industry sector, company size, the scope of IT investments.

Factors which will influence the effectiveness of BM, clear roles and responsibilities, governance structures for cross-boundary collaboration an organisational culture conducive to BM

Hesselmann, F., Mohan, K., 2014. Where are we headed with benefits management research?

Current shortcomings and avenues for future research. 22nd European Conference on

Information Systems, Tel Aviv.

Poll – ‘what are the constraints’ for you?

Which of the following factors have constrained adoption of BM in your organisation? (Tick all that apply) 1. Leadership commitment 2. Business planning & budgeting processes 3. Lack of acceptance of accountability for benefits 4. Lack of knowledge of methods and tools 5. Varying commitment across departmental boundaries

“After all is said and done, more is said than done” Aesop

Challenges of achieving change

“Coming up with the ideas is the easy part, but getting things done is the tough part. The place where these reforms are going to die is…down in the trenches” Michael Hammer, 1993 http://www.nytimes.com/1993/09/08/us/washington-takes-

leaf-from-business-manuals.html

“Faced with the choice between changing one’s mind and proving that here is no need to do so, almost everybody gets busy on the proof” Kenneth Galbraith, Economics, Peace and Laughter (1971), p. 50

People

We need to evolve from a Technology Delivery Mindset to a Business Value

Mindset

Why isn’t BM common practice?

• NOT a lack of books, articles, frameworks, methods, techniques or tools

• The challenge is adoption and sustainment – bridging the “Knowing-Doing Gap”1

• Human behaviour – or rather our inability to

change it - from a delivery mindset to a value mindset - from the Boardroom to the front line - is at the core of the challenge

• Technology creates greater expectations while at the same time requiring increasingly significant changes to behavioural habits, or norms if those expectations are to be met – all this within an increasingly complex and interdependent “ecosystem”.

©2016 The Thorp Network Inc. 1Source: Pfeffer & Sutton, 2000. HBS Press

Keys to Success with BM

Benefits management goes beyond project management - & beyond programme & portfolio management - it is an organisational mindset shift focus towards value creation & sustainment - it can dramatically threaten and disrupt the power structure of the organisation - it is essential:

• Before starting, to: – Enlist senior executive sponsorship - CXO active

involvement is essential & the #1 CSF! – Recognise that introducing benefits management is about

behavioural change - it is a significant change management programme!

• In Managing the Journey, to:

– Chart the destination & decide where to begin. – Take an incremental approach - start “Lite” with small steps. – Avoid excessive bureaucracy.

• .

Source : Adapted from Peter Harrison and Sarah Harries article “Five Critical Success Factors for Introducing Val IT” – ISACA journal Volume 3, 2009

“Be prepared for a long journey and don’t embark alone”

Peter Senge et al., The Dance of Change, 1999

Further research

how do organisations first find out about BM, and how is knowledge about BM spread within that organisation? what are the key factors which determine whether and how BM is explicitly used in an organisation and who makes the decisions? how easily does BM fit within the approach to project, programme and portfolio management in organisations? how easy do organisations find it to build commitment to BM over time, and embed it in their processes? what is the relationship between organisational culture, specifically one orientated towards value, and the use of BM methods and practices?

Forthcoming APM Benefits Management SIG events

14 June Benefits Management : a core theme in management research and education?

Sheffield

https://www.apm.org.uk/event/benefits-management-core-theme-management-research-and-

education

23 June APM Benefits Summit 2016 and SIG Annual General Meeting

London https://www.apm.org.uk/event/apm-benefits-summit-2016

Your questions

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