How does Managing Benefits help you improve what value you get our of your projects and programmes of your organisation.
Projects only bring value to an organisation if they lead to benefits. That is in a nutshell the only (and true) reason for spending time and money creating products. Earning benefits.
Analysing how well you deal with managing benefits is part of a method called Management of Portfolio.
Those identified benefits must therefore be clear to all involved. Define them first in order for the project to create the right product(s). This in turn enables to gain the right benefits by using them appropriately.
A new sales system installed has no value if its use does not lead to a 15% increase in sales within the next 2 years (for example).
The first question to ask is WHY we need this project and not WHAT are we to produce during the project.
What are benefits anyway?
First, let us not confuse benefits with profits. Whereas profits can be a form of benefits, benefits are not always profits.
Benefits can be tangible or intangible, financial or non-financial, when financial they can be cashable or non-cashable.
Let me explain by giving a simple example.
Expecting a 10% increase of the profit margin by the introduction of a new sales approach is related to profit obviously. It is because the new sales approach (output) is introduced and followed by the sales team that we will obtain new expected results (outcomes) which will in turn enable the 10% increase of the profit margin (benefits).
In Management of Portfolio we look further how benefits help to achieve the strategic objectives of an organisation.