Lesson 1, Topic 1
In Progress

1.18. Describe the benefits and costs of all changes accurately

ryanrori February 1, 2021

[responsivevoice_button rate=”0.9″ voice=”UK English Female” buttontext=”Listen to Post”]

Many organisations believe that a project is finished after it has successfully gone live and the users are happy. Nothing could be further from the truth. A project is only complete once the reason for its existence has been achieved and it has been handed over to the business in such a way that the business can now sustain the project outcomes.

Why is a project brought into existence in the first place? The business case should tell you. It should contain the business value or benefits that are expected to be achieved at the completion of the project.

Business value doesn’t just ‘drop out’ of projects with no effort. Benefits need to be planned, owned and worked for in order for them to emerge. The realisation of this business value, demonstrated in the following diagram, rarely happens immediately after the project implementation.

Image from book

Realise value phase

The following figure shows there can be a delay from three to six months.

Image from book
Project cost/benefits payback period.

There is often a transition period where operational costs actually increase for a short period of time after implementation, and then the benefits start to be realised and the operational costs decrease.

There is also an overlap in the project costs and the start of the business value realisation, because some part of the project must continue until the benefits begin to be realised and it is handed over to the business as an on-going activity.

The generally accepted term for the control, management and realisation of business value is ‘benefits management’. Benefits management translates business objectives into benefits that can be measured, tracked and realised.

If an organisation chooses not to execute benefits management diligently, the risk of projects not meeting stakeholder expectations is increased.  

Benefits management can also act as a catalyst for further change if the project is not realising the expected benefits. This can force the project and organisation to complete a review that can lead to changes in the approach to the project, and thus to subsequent realisation of the expected value.