This guidance section introduces key benefits management concepts. It explains how agencies comply with the Benefits Management Policy.
Definition
In this Policy, benefits are defined as the measurable improvement from change, which is perceived as positive by one or more stakeholders, and which contributes to organisational (including strategic) objectives.
This means:
- Benefits are measurable and observable.
- Benefits are derived from change. In the context of this policy, change is derived from Digital and ICT-enabled investments which collectively form the Digital and ICT Portfolio.
- Benefits are advantageous to various stakeholders. In the context of government-led digital and ICT investment, stakeholders include citizens, businesses, and various areas within Government.
- To be relevant, benefits need to contribute towards strategic objectives. These may include agency specific objectives as well as broader government strategic goals.
Benefits Management is the identification, quantification, analysis, planning, tracking, realisation, and optimisation of benefits. It is an important change and investment discipline that, when applied effectively, increases confidence in realising intended benefits and demonstrating the success of investments.
The need for increased adoption in the public sector is based on the relatively poor track record of many digital and ICT projects in delivering the benefits they were established and funded to realise. With this in mind, uplifting benefits management maturity is a journey that requires substantial cultural change. As such, agencies at earlier stages of their maturity journey should:
- Approach benefits management with a forward-looking mindset that seeks to plan for success and learn from previous experience, rather than approaching it with scepticism and seeking to attribute blame for past failures.
- Scale benefits management activities proportionately to the investment size and complexity. It is usually impractical to measure all identified benefits of a project. Consider applying the 80:20 rule by focusing on the 20% of the benefits that typically represent 80% of the value.
- Prioritise benefits that can easily be measured using existing processes (for example, staff/client satisfaction surveys) and ICT systems. This helps keep the cost and effort to measure and monitor benefits within reason.
- Be cognisant of and actively account for optimism bias. This means, for example, that it is usually necessary to seek evidence and validation to support benefit forecasts.
- Dedicate time and resources upfront to plan for benefits management by documenting rigorous benefit baselines, targets, and realisation plans to support a compelling business case.
- Ensure that the proposed benefits are within scope of the investment to realise and are not dependent on delivery of subsequent investments.
Governance
Clearly defined roles, responsibilities and accountabilities are fundamental to effective benefits management.
Some of the key project level roles in benefits realisation 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 typically 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 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.
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.
Benefits Management Lifecycle
The benefits management lifecycle spans the life of a digital and ICT-enabled project and beyond. The lifecycle is comprised of 5 key phases: Identify, Analyse, Plan, Monitor and Realise, and Review. While the lifecycle is represented as sequential, many activities are repeated throughout the lifecycle reflecting its iterative nature.
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 project 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 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 milestones or project stage gates to assess the progress, delivery risk and realisation of benefits.
- Capture anecdotes and success stories that demonstrate success of the project.
- Capture lessons learned and share with future projects.
- Continue to monitor and report on benefits realisation.
Glossary
Baseline: The reference levels against which a project is monitored and controlled.
Benefit: The measurable improvement from change, which is perceived as positive by one or more stakeholders, and which contributes to organisational (including strategic) objectives.
Benefit Dependencies: Enabling products/services/outputs and business changes upon which benefits realisation is dependent (may also include intermediate benefits).
Benefits Management: The identification, quantification, analysis, planning, tracking, realisation, and optimisation of benefits.
Benefit Owner: The individual responsible for the realisation of a benefit and who agrees the benefit profile.
Benefit Profile: The document used to record and reach agreement (with the Benefit Owner) on the key details about a benefit (or disbenefit) including categorisation, metrics, calculation, baseline, target, and any dependencies.
Benefits Realisation Plan: The plan that provides a consolidated view of the benefits forecast by category and which represents the baseline against which benefits realisation can be monitored and evaluated. Should also capture governance arrangements, risks to realisation, and assumptions.
Benefits Map: A pictorial representation of the business changes on which benefits realisation depends, and how these benefits contribute towards strategic objectives.
Business Changes: Business changes or other management interventions (e.g. training, staff re-allocation, process redesign, etc.).
Business as Usual: The routine, day-to-day operational activities by which an organisation pursues its mission.
Cost-Benefit Analysis: Analysis which quantifies in monetary terms as many of the costs and benefits of a proposal as feasible.
Cost-Effectiveness Analysis: Analysis that compares the cost of alternative ways of producing the same or similar outputs. Suited to compliance-based projects.
Digital & ICT Portfolio: The collection of digital and ICT-enabled investments that are subject to the Investment Oversight Framework.
Disbenefits: The measurable result of a change, perceived as negative by one or more stakeholders, which detracts from one or more organisational (including strategic) objectives.
Emergent Benefits: Benefits that emerge during the design, development, deployment, and application of the new ways of working, rather than being identified at the start of the project.
End Benefits: The benefits the project is set up to realise and which confirm achievement of the investment objectives.
Intermediate Benefits: Benefits which arise from a project, and which can in turn enable the realisation of the end benefits that the project was designed to realise.
Investment Oversight Framework: The Whole-of-Government Digital and ICT Investment Oversight Framework is a six-stage, end-to-end framework providing a way for the Government to manage digital and ICT-enabled investments across the entire project lifecycle.
Measures: One or more agreed measurable performance indicators used to demonstrate the achievement of a benefit.
Metrics: One or more agreed measurable performance indicators used to demonstrate the achievement of a benefit.
Multi-Criteria Analysis: A technique applied to the appraisal of options. It is based on assigning weights to relevant financial and non-financial criteria, and then scoring options or investments in terms of how well they perform against these criteria.
Outputs: The tangible or intangible artefacts produced, constructed, or created as a result of a planned activity.
Senior Responsible Official (SRO): The Senior Executive Service (SES) official accountable for programme/project success, who ensures that benefits are realised post investment closure.
SMARTAA Specific, measurable, achievable, realistic, timely, agreed, and attributable to strategic objectives.
Top-Level Benefits: Top-level benefits are the highest priority benefits that capture the intent of the investment and will provide the clearest evidence that an investment has achieved its stated aims.
As a guide:
Tier 1 proposals should generally articulate between 1 and 5 top-level benefits.
Tier 2 proposals should generally articulate between 1 and 3 top-level benefits.
Tier 3 proposals should generally articulate 1 to 2 top-level benefits.