Against the current backdrop of public-sector cuts and private-sector financial regulation and cost reduction, maximising delivery of benefits from programmes is as relevant as ever. Despite these pressures, research has shown that 80% of programmes fail to deliver planned benefits, a concerning finding given that the sole reason programmes are initiated in the first place is to deliver benefits.

Why does this matter?

Failure to deliver benefits results in huge sunk costs of programme delivery, but without the repayment such as increased revenue generation or profit margins proposed in business plans.

This can affect subsequent initiatives. Scepticism around proposed programme rewards increases and the cumulative effect of over-promising and under-delivering results in change fatigue; along with external loss of investor confidence.

Therefore effective benefits realisation management (BRM) is a crucial tenet of programme management. Given its relatively low success rate in comparison to other well-established methods, it is often regarded as the 'last bastion' of programme management to be addressed.

Organisations can address BRM through a structured approach that focuses on fundamental gains the programme is seeking, defining and managing benefits throughout the programme.

This article discusses five key areas within BRM.

1. Adopt a benefits-led approach to programme definition

A benefits-led approach begins with the organisation's strategic objectives, working backwards to the definition of business benefits that would be realised through the changes. The capabilities that the programme must deliver are used as the starting position to shape the programme.

If a proposed programme element, or pet project, can't demonstrate a direct and meaningful link to the organisational strategic objectives, its existence should be questioned.

Moorhouse programmes failing to deliver benefits diagram

The programme must also be defined from the capabilities and technical enablers that the business holds. In reality, shaping the programme considering both 'ends' ensures the programme operates within the 'art of the possible'.

2. Use a clear 'routemap' to track the realisation of benefits

The adoption of a clear process, structured around capturing, defining and tracking benefits throughout the programme lifecycle provides a construct which can be used to track when benefits will be delivered, and their impact to the organisation.

The illustration below is a seven stage process for developing an agreed view on the programme benefits, how to define these with business owners and drive the focus on benefits until they are realised.

Moorhosue benefits realisation routemap

3. Use tools and techniques to embed and systemise benefits realisation

There exist an array of supporting tools which programme managers can use to aid benefits definition and tracking. Three key tools are discussed:

• Benefits Maps - define the 'line of sight' from the organisation's strategic objectives through to individual programme activities, helping to ensure that the programme logic is sound and that project outputs are contributing to the realisation of planned business benefits.

• Benefits Profiles - capture benefit descriptions, owners, derivations, changes to current processes required to enable realisation benefit and the financial value of the proposed benefit. Documenting the benefit profile in this way forces a rigorous consideration of the changes required and the expected added value, per the adage 'if you can't measure it, you can't manage it'.

• Benefits Registers act as a repository for all defined benefits. The register is owned by the Business Change Manager and captures changes required to realise the benefits, timescales for realisation and consolidated benefit values into a central tool for management reporting.

There are countless examples of ERM systems introduced to organisations at considerable cost only for the customer to state that benefits have fallen woefully short of their expectation. The use of a benefits map matches expectations of users, funders and providers from the outset ensuring all parties understand their roles within the programme.

4. Appoint a Business Change Manager

Benefits are only realised once they are adopted by the organisation. The Business Change Manager role takes responsibility for the definition and realisation of the benefits delivered by a programme and requires careful transition with all areas of the business affected by the programme and across all affected stakeholders.

Communication in this role is essential to its success. 'Top-down' messaging from Board level plays a key role, but in order to create lasting change the Business Change Manager must also provide 'on the ground' delivery. Oftentimes the role of the Business Change Manager is under-utilised and Board-level engagement is not sustained throughout the life of the programme.

Research undertaken by Moorhouse Consulting identified that 37% of leaders believed their organisations regularly delivered benefits from change, compared to only 5% of middle management.

5. Recognise the importance of psychology

The use of clear approaches, supporting frameworks and proactive stakeholder engagement are critical enablers, but in themselves will not provide the means to ensure success. The human factors, beyond those discussed already, play a key role in the realisation of programme benefits.

Cultural pressure can play an important part. Where demonstration of expected gains through solid business cases is an important financial hurdle to overcome prior to programme agreement, there is an inevitable pressure on Programme Managers and Senior Responsible Owners to over-sell the benefits of the programme they are responsible for, creating an uphill battle from day one.

On one programme a 'change champion's' network was significantly larger than the programme team itself. The programme impacted the entire business and transformed its culture. By adopting the Business Change Manager and Change Champion approach it was hugely successful.

Summary

In today's climate of cost-reduction and fiscal economising, driving the maximum tangible benefits from change initiatives is as salient as ever, yet the vast majority of businesses still fail to deliver even close to the expected benefits.

Organisations taking a concerted benefits-led approach to the delivery of change initiatives stand a better chance of succeeding.

The approach starts as simply as 'beginning with the end in mind' - understanding the tangible business value a programme will develop before commencing.

Define a clear and agreed approach to quantifying and tracking benefits and appoint a Business Change Manager, to provide the focus and accountability to drive material, sustainable business benefits from the outset.