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Benefits Management Policy

What is the Benefits Management Policy?

The Benefits Management Policy (BMP) defines how benefits must be managed for digital and ICT-enabled investments. The Policy: 

  • ensures that agencies understand the requirements to successfully deliver the outcomes that Australians need  
  • enables effective oversight and reporting of investment outcomes across the Government's digital and ICT investment portfolio.

The Secretaries' Digital and Data Committee (SDDC) has endorsed the voluntary adoption of the BMP for digital and ICT proposals coming forward for Cabinet consideration under the Digital and ICT Investment Oversight Framework in the 2023-24 MYEFO process.

Unless formally excepted, the Investment Oversight Framework applies to all Government digital and ICT-enabled investments that meet the following definition and eligibility criteria.

Note: The BMP is endorsed by the SDDC for application to digital investments in-scope of the Investment Oversight Framework for Digital and ICT Investments.

Applicability

The Investment Oversight Framework and therefore BMP applies where digital and ICT investment: 

  • is brought forward by a non-corporate Commonwealth entity and, where specifically requested by the Minister responsible for the Digital Transformation Agency, a Corporate Commonwealth entity 
  • involves digital or ICT costs
  • is being brought forward for government consideration as a new policy proposal.

Note: Digital Investment Definition 

A digital and ICT-enabled investment is an investment which uses technology as the primary lever for achieving expected outcomes and benefits. This includes investments which are: 

  • transforming the way people and businesses interact with the Australian Government 
  • improving the efficiency and effectiveness of Australian Government operations, including through automation. 

Policy Requirements

The Policy currently includes eight core benefits management best practice statements that support agencies in the delivery of investment outcomes and the realisation of investment objectives.

Future Policy iterations will further integrate benefits management across all states of the Investment Oversight Framework and will likely include more detailed processes, guidelines, templates, a classification structure, and reporting requirements.  

The BMP is comprised of eight policy statements that define successful benefits management practice. The policy statements are informed by the experience and research of globally recognised leaders, Australian federal, state and territory government agencies, and the DTA.

  • 1. Benefits are aligned to strategic objectives

    A key component of the definition of benefits is that they are measurable improvements from projects 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 project benefits (and vice versa). Benefits from projects should be expressed in consistent terms that demonstrate their strategic contribution. Only projects 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 project 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 Investment Oversight Framework 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. 
  • 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 Accountable Executive and Benefit Owners. This ensures that individual responsibilities and accountabilities for benefits realisation are clearly defined, including the implementation of business change.
    • 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 other key stakeholders.
  • 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 other 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.
  • 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, and agreed (SMARTA).
    • 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 confidence levels for each benefit are clearly defined and documented.
    • Potential project disbenefits are documented.
  • 5. Benefits are owned by business units, and not by the project

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

    The Benefit Owner is the individual accountable for the realisation of specified benefits within the project. 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 project delivery stakeholders such as the Accountable Executive and the Business Change Manager to reflect that benefits realisation requires a joint effort between project delivery and business owners. 
  • 6. Benefit dependencies are explicitly understood and recorded

    Projects do not lead to automatic realisation of benefits. Benefits realisation depends on business change or some other management intervention. Identifying the enabling products/services/outputs and dependant business changes is a critical first step to ensure that someone is accountable for these management actions. 

    This means

    • A benefits map is developed collaboratively with stakeholders to identify the benefits of the project and how 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.
    • Change management functions are integrated with benefits planning so that appropriate change management activities are planned for.
  • 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.
    • Projects clearly articulate 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 project should inform valuable lessons learned and determine the starting point for similar future projects.
    • There is an emphasis on looking for emergent benefits throughout the project lifecycle. 
  • 8. Benefits management activities are integrated into project management activities 

    Benefits management must be fully integrated into other 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. 
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