Overview of Benefits Management

Benefits Management (BM) can be described as the process of organizing and managing such that the potential benefits arising from the use of IS/IT are realized (Ward and Daniel, 2012). In another source, BM deals with the systematic planning, realization, and controlling of the intended benefits of I/IT projects, beyond the traditional success measures of staying within project time frame and budget limits (Braun et al., 2009). The term was first used in the late 1980s (Farbey et al., 1999), when concerns were raised that major investments in business changes shaped and enabled by Information and Communications Technology (ICT) were not achieving the expected benefits (Ward and Daniel, 2006). The interest in benefits and the linked concept of 'business value' have been associated with the introduction of program and portfolio management levels (Jenner and Kilford, 2011), as part of what Morris (2011) has called 'enterprise-wide' project management. BM has therefore been an important part of the development of project management in the late 20th and early 21st centuries, as efforts have been made to link individual projects, together with the management of change, more closely to organizational strategies and the focus has moved from product creation to value creation (Winter et al., 2006).

There is a growing body of evidence that the use of BM practices enhances the likelihood of projects achieving organizational goals, both concerning IT investments (Ashurst, 2012) and Business Strategies more generally (Serra and Kunc, 2015). Despite this, the uptake of BM practices has been low, with few organizations taking a comprehensive, full life-cycle approach to BM. A greater focus on BM could therefore help to address the persistently high failure rate of projects, particularly those involving IT-enabled change (Standish Group, 2013).

Several factors might explain the low take-up of BM. There are problems with the concepts of 'benefits' and 'business value' which are partly due to the multiple meanings of the terms themselves (Winter et al., 2006) and the lack of consistency in the definitions developed by different professional groups, such as economists, accountants, and project managers, which means that there is a lack of agreement on how to classify and measure benefits (Jenner, 2009). Furthermore, focusing attention on the creation of value and the realization of benefits has implications for the organization as a whole, affecting strategies at corporate, business, and operational levels (Johnson et al., 2014) and diverse management domains, such as asset management and performance management. This means it challenges the wider mindset in an organization (Jenner, 2009) and hence may struggle to gain acceptance. Ward and Daniel (2012) provided a diagram showing the implications of poor BM, as illustrated in Figure 1 below.

                                                 Figure 1. The implications of poor BM

Benefits Management Approach

The BM approach is based on a life-cycle process: a set of linked steps to guide the identification, scoping, justification, planning, and implementation of IS projects, such that the available benefits from those projects are achieved. The key steps of the process are formulated as interrelated tools or frameworks that can be used to guide and structure the activities and actions needed to implement a project successfully (Ward and Daniel, 2012).

                    Figure 2. Comparison of BM with traditional IS project approaches (Ward and Daniel, 2012).

The purpose of any IS/IT project is to deliver improvements to organizational performance. It means that the key process around which others should fit is benefits management rather than project management, investment appraisal, or systems development approaches. These should be adapted to match the types of change involved in the investment and the nature and range of benefits expected to be achieved. How the benefits management process relates to the other processes and approaches is therefore depicted in Figure 3.

Figure 3. BM context (Ward and Daniel, 2012)

Pettigrew and Whipp (1991) developed the BM process model by recognizing that the process by which a major change is managed needs to be relevant to the content of the change involved – in this case primarily IT-enabled change – and must be appropriate to the prevailing organizational context – both internal and external (see Figure 4). This BM model has been widely adopted by scholars and practitioners in project management and is considered a best practice.

Figure 4. A process model for BM (the figure has been adopted from Ward and Daniel (2012))

The main purpose of each stage is described as follows:

1. Identify and structure benefits – to establish agreed objectives for the investment, identify all the potential benefits, understand how a combination of IS/IT functionality and business changes can cause the benefits to be realized, establish ownership of the benefits and determine whether they can be measured, identify any organizational issues or implications for particular stakeholder groups, and produce an outline business case.

2. Plan benefits realization - to develop a full benefits plan and a business case for the investment, which will be submitted to management for approval.

3. Execute benefits plan - to carry it out and adjust it as necessary as issues and events affecting its viability occur.

4. Review and evaluate results - to assess the investment itself and to gain organizational learning.

5. Establish potential for further benefits - to consider what further improvement is now possible following the implementation of the system and associated changes and in light of the new levels of business performance that have been achieved.

References:

Ashurst, C., 2012. Benefits realization from information technology. Palgrave Macmillan, Basingstoke, UK.

Braun, J., Ahlemann, F. and Riempp, G., 2009. Benefits management–A literature review and elements of a research agenda. Wirtschaftsinformatik Proceedings 2009. 54. Available in: https://aisel.aisnet.org/wi2009/54/ (accessed 25.3.2023).

Farbey, B., Land, F. and Targett, D., 1999. The moving staircase–problems of appraisal and evaluation in a turbulent environment. Information Technology & People, 12(3), pp.238-252.

Jenner, S., 2009. Realising Benefits from Government ICT Investment: A Fool's Errand?. Academic Conferences Limited.

Jenner, S. and Kilford, C., 2011. Management of portfolios. The Stationery Office.

Johnson, G., Whittington, R., Regnér, P., Angwin, D. and Scholes, K., 2020. Exploring strategy. Pearson UK.

Morris, P.W., 2011. A brief history of project management, The Oxford Handbook of Project Management. Morris, P.W., Pinto, J., Söderlund, J. (ed.), Oxford University, UK.

Pettigrew, A. and Whipp, R. (1991) Managing Change for Corporate Success, Oxford: Blackwell.

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, 33(1), pp.53-66.

Standish Group, The CHAOS Manifesto — Think Big, Act Small, Available at http://www.versionone.com/assets/img/files/CHAOSManifesto2013.pdf (accessed 27.3.2023).

Ward, J. and Daniel, E., 2012. Benefits management: how to increase the business value of your IT projects. John Wiley & Sons.

Winter, M., Smith, C., Morris, P. and Cicmil, S., 2006. Directions for future research in project management: The main findings of a UK government-funded research network. International journal of project management, 24(8), pp.638-649.