Benefits Realisation

Management Framework
Part 1: Principles

V2 | October 2015
Table of contents

1. Benefits Realisation Management Framework 3

2. Principles 4

3. Expanded principles 5

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State of New South Wales through Department of Finance, Services and Innovation 2015.

Benefits Realisation Management Framework | PART 1 | October 2015 Page 2 of 14

1. Benefits Realisation Management Framework

This document is part of the NSW Government The purpose of the Benefits Realisation
Benefits Realisation Management framework. Management Framework is to provide:
The structure of the framework is as follows:
a framework of best practice principles and
concepts drawn from latest experiences and
proven practice in setting up and managing
Part 1: Principles
programs that is transferable across NSW
agencies
Part 2: Process
a standard approach for benefits realisation
management for anyone not familiar with the
Part 3: Guidelines subject matter, including program directors
and managers, change managers project
managers, business analysts and program
Part 4: Tailoring
management office (PMO) staff across NSW
Government
Part 5: Glossary
consistent terminology and benefits
categorisation
introduction and guidance for program
sponsors and business benefit owners.

The framework:

is aimed at those who are interested in

benefits realisation within agencies, enabling
them to adapt and tailor the guidance to
their specific needs
must be accessible by strategy groups,
operational business areas and program/
project teams as well as by individual
practitioners and business benefit owners
should help PMO practitioners improve
their decision making and become better
at implementing beneficial change.

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2. Principles

Principles about how we Think aBouT intermediate outcomes are needed to

9
benefits realisation realise end benefits (and are just as
important). Achievement of and reporting
1 Benefits need to be first understood
on intermediate benefits are just as
as outcomes. Benefits are the reason
important as the benefits associated with
the investment is made.
final strategic outcomes.

2 The benefits must be aligned to the

organisations strategic goals. The 10 Benefits must be measurable. Benefits must
be measurable and evidence based in order
outcomes and benefits realisation delivered
to demonstrate that an investment provides
by the change helps achieve strategic goals.
value.

3 Benefits realisation is an end-to-end

process during the full lifecycle of the Principles about how we Manage
investment. Benefit measurement, reporting benefits realisation
and evaluation will occur during and after
the project / program has delivered its The Business needs to own the benefits.
11
capabilities and change. Benefits must be owned by appropriate
sponsors and managers, not by the project /
4 Benefit Management is the cornerstone program manager.
of a successful business case. Identification
and understanding of benefits will provide
12 keep the number of benefits to a sensible,
evidence that the proposal will be effective manageable number. Priority should be
and represents value for money. given to those benefits with the greatest
potential value whether they are financial
Principles about how we aPPRoaCh or non financial.
benefits realisation

5 Change programs deliver benefits. It is 13 Benefits management needs to linked to

critical that change initiatives are successfully Project/Program management. The new
embedded in order to deliver the benefits. capabilities delivered by project and program
management need to be understood in
terms of their bringing about change and
6 Benefits are not automatic. In addition to
therefore benefits.
effective project management, delivery of
desired benefits requires active monitoring
of project/program progress and the 14 Benefit Realisation needs to be integrated.
outcomes and benefits to be realised. Effective benefits management will
have integration with the other relevant
management. It is therefore necessary that
7 Benefits are dynamic; they need to be
throughout the benefits management cycle
regularly reviewed and updated. Benefits
that there be integration with other relevant
identified at the commencement of the
management frameworks.
project/programs life cycle will almost certainly
change over the life of the investment.
15 Benefits need to be communicated. Benefits
need to be communicated to demonstrate
8 Benefits are both financial and non-financial.
how the project/program is performing in
A benefit is the measurable improvement
its progress towards the outcomes
resulting from an outcome which is
perceived as an advantage by a stakeholder.

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3. Expanded principles

Principle 1 Principle 2

Benefits need to be first understood The benefits must be aligned to the

as outcomes. organisations strategic goals.

Rationale Rationale

Benefits are the reason the investment is made. The outcomes and benefits realisation delivered
by the change helps achieve strategic goals.
Benefit Management starts with defining the
business change needed and the business Strategic goals describe how an organisation
outcomes required. wishes to evolve and change in order to survive
and grow, whether through reduced costs,
Ultimately it is the realisation of benefits which increased revenues, or improved delivery.
helps achieve one or more program/project
outcomes. The benefits management cycle
implications
should start as early as possible by identifying
likely outcomes and benefits and mapping them. a) If benefits are not aligned with strategic goals
It is preferable to do this in a systematic way then their overall corporate value must be
by working from the program/project objectives questioned. Investment decisions must be
back to the enabling project outputs (objective based upon realisation of benefits supporting
> benefits > outcomes > capabilities > project the delivery of corporate objectives. Projects
outputs). and programs which are not properly aligned
with the right corporate strategies and
implications objectives should not proceed (unless they
are compliance related).
a) In order to identify the outcomes required and
the benefits that result from a program/project
- benefits mapping may be used as a tool.

b) Benefits mapping (starting by defining

program/project objectives) are highly useful
because benefits typically dont happen in
isolation, and there are cause and effect
relationship between the elements.

c) Failure to deliver a specific output or capability

may appear to have a minor effect from a
project perspective, however, may have a great
effect on the desired business outcome and
the extent of benefits being realised.

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3. Expanded principles (cont.)

Principle 3 Principle 4

Benefits realisation is an end-to-end Benefit Management is the cornerstone

process during the full lifecycle of the of a successful business case.
investment.

Rationale Rationale

Benefit measurement, reporting and evaluation Benefit realisation and achieving the business
will occur during and after the project / program outcomes are a key focus of a business case.
has delivered its capabilities and change. Identification and understanding of benefits
will provide evidence that the proposal will
implications be effective and represents value for money.
Identifying and understanding the business
a) In order for benefits to be tracked after outcomes also provides insight into how the
a program has ended there needs to be benefits can be measured, when they are likely
clear identification of the owners of benefits to be realised, and what risks are associated with
within the business, and effective handover them.
of benefits measurement and reporting
to the business owner. implications
b) Any unexpected benefits or negative impacts a) Failure to fully identify and understand
should be captured, evaluated and reported benefits will result in a weakened business
to ensure the full value of the program is case which in turn may not be supported
recognised or remediation steps are put (not funded), or otherwise may only be
in place. partially supported (partial funding).

b) If benefits are not identified or valued in

the business case then this could result in
incorrect prioritisation of the project/program.

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Principle 5 Principle 6

Change programs deliver benefits. Benefits are not automatic.

Rationale Rationale

It is critical that change initiatives are successfully In addition to effective project management,
embedded in order to deliver the benefits. delivery of desired benefits requires active
Change may span any (or all) of the areas of monitoring of program progress and the
people, processes, technology, and organisational outcomes and benefits to be realised.
(i.e. re-structuring), and needs to be successful
across all spheres from a benefits realisation implications
viewpoint.
a) Without active monitoring of benefits, senior
implications management and other stakeholders cannot
assure themselves that business benefits
a) Failure to successfully undertake change will be delivered in full, or in a timely manner.
management activities, including ensuring
the change is properly embedded, greatly b) Unless benefits are progressively tracked
increases the risk that benefits will not be and reported, there is no opportunity for
realised in full, or in a timely manner. management to implement corrective
measures (if need be) to ensure benefits
b) Failure to broadly consider change impacts will be delivered in full, or in a timely manner.
(across the areas of people, processes,
technology, & organisational) may lead to
points of failure in terms of embedding new
capability in the business, and hence not
realise expected benefits.

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3. Expanded principles (cont.)

Principle 7 Principle 8

Benefits are dynamic; they need Benefits are both financial and
to be regularly reviewed and updated. non-financial.

Rationale Rationale

Benefits identified at the commencement of A benefit is the measurable improvement

the investments life cycle will almost certainly resulting from an outcome which is perceived
change over the life of the investment. They as an advantage by a stakeholder.
need to be regularly reviewed and updated,
in response to changes in program scope, Financial benefits are readily quantifiable.
objectives and delivery. Examples are cost savings or increased revenues.

Non-financial benefits are also readily quantifiable

implications and will often be related to the measurable effect
on the business key performance indicators.
a) Failure to regularly review and update benefits
Examples are reduction in hospital emergency
may result in non-capture of new or changed
wait times, educational outcomes improved
benefits.
or compliance with government legislation
This would result in the reporting of benefits requirements.
to be overstated or understated and could
For service oriented benefits, the level of client
result in adverse senior management
satisfaction could be measured via the use of
decisions.
surveys at regular intervals.
b) In a changing program environment any
Intermediate outcomes are often non-financial
reduction in the overall value of benefits
indicators of benefits realisation.
forecast needs to be clearly understood and
communicated to senior management, as may
impact on the overall viability of the program. implications

a) A broad approach to the identification and

categorisation of benefits is highly desirable
in terms of fully supporting the business case.

b) If a benefit is not measurable it cannot be

formally recognised as a benefit as there will
be insufficient evidence of the realisation
of the actual benefit.

c) Non-financial benefits are not always seen

to be easily quantifiable; however, there can
often be ways of turning them into measurable
benefits. Workshopping with relevant subject
matter experts can often assist in identification
of appropriate measures.

d) Care should be taken if trying to give financial

values to non-financial benefits as this can
be misleading if the value is used as part of
an investment justification, but will not be able
to be realised and measured.

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Principle 9 Principle 10

Intermediate outcomes are needed Benefits must be measurable.

to realise end benefits (and are just
as important).

Rationale Rationale

Reporting intermediate benefits are just as Benefits must be measurable and evidence based
important as the benefits associated with final in order to demonstrate that an investment
strategic outcomes. provides value, therefore supporting the business
case.
implications
It is critical that baseline measures and target
a) There can often be critical dependencies values are established. This will enable the extent
between intermediate outcomes and other of success (or otherwise) of the initiative.
subsequent outcomes (and their associated
Both benefits and disbenefits need to be
benefits), hence failure to materialise
measured. Business cases and benefit registers
intermediate outcomes is an indicator of
should list both.
a risk to the overall benefits realisation.

b) Unless intermediate outcomes and their implications

associated benefits are progressively tracked
and reported then there is no opportunity a) If initial baseline measures are not established
for management to implement corrective then the extent of benefits realisation cannot
measures (if need be). Failure to implement be demonstrated.
necessary corrective actions could result b) If benefits are not measured, or are not
in end benefits not being delivered in full, measureable, then insufficient evidence exists
or otherwise in a timely manner. to justify the investment in the initiative.

c) Informed and accurate decisions around

business cases cannot be made unless
disbenefits are identified and measured.

d) Projects or programs should not be claiming

the same benefits. Double counting of benefits
impacts the ability of senior management to
make an informed decision.

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3. Expanded principles (cont.)

Principle 11 Principle 12

The Business needs to own the benefits. Keep the number of benefits
to a sensible, manageable number.

Rationale Rationale

Accountability and responsibility for benefit Priority should be given to those benefits with
realisation is key for successful benefits the greatest potential value whether that be
management. Benefits must be owned by financial or non financial.
appropriate sponsors and managers, not by the
project / program manager. It is important that The business / benefits owners in consultation
responsibility for benefit realisation remains with with project / program team need to reconfirm
those business units affected. what benefits to measure with a focus on
the benefit measures identified as part of
the business case submission as they were
implications
used in successfully valuing the business case
a) Failure to formally assign accountability and submission.
responsibility for benefits creates a significant
risk that benefits will not be fully realised, implications
measured or tracked throughout the full
lifecycle of the benefits. If this risk is realised a) The use of a Benefits Profile is good way
then the success or otherwise of the original of reconfirming the measurable benefits that
investment decision cannot be properly a project may have against each outcome.
ascertained. b) Failure to adequately highlight those benefits
b) Failure to assign benefit owners will most likely measures that provide best business value
impede benefit realisation. may lead to an over complicated and timely
approach to reporting on the ongoing
c) Benefit profiles assist benefit owners in achievement of each benefit measure. This
confirming and endorsing a specific benefit may ultimately limit the amount of benefit
reporting occurring and limit the amount of
d) Incorporating a confidence level for each assurance that a program has on delivering
identified benefit which can be monitored business outcomes and benefit realised.
and updated over time.

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Principle 13 Principle 14

Benefits management needs to linked Benefit Realisation needs to be

to Project/Program management. integrated.

Rationale Rationale

The new capabilities delivered by project and Benefits realisation is the end product of the
program management need to be understood implementation of change initiatives. It is
in terms of their bringing about change and therefore necessary that throughout the benefits
therefore benefits. management cycle that there be integration
with other relevant management frameworks
implications such as Financial, Value Governance, Delivery
Governance, Portfolio Management and Change
a) Without active monitoring of benefits, senior Management Frameworks where relevant.
management and other stakeholders cannot
assure themselves that business benefits will implications
be delivered in full, or in a timely manner.
a) Failure to align with Financial management
b) Unless benefits are progressively tracked frameworks may prevent the business case
and reported, there is no opportunity for from attracting funding, or continued funding.
management to implement corrective It may also not allow for appropriate validation
measures (if need be) to ensure benefits of return on investment.
will be delivered in full, or in a timely manner.
Benefits management is at the heart of b) Failure to align with Change management
Program management. Program management frameworks may not allow for successful
frameworks should be driven by the need embedding of new capability into the business,
to deliver the program benefits and the thus preventing delivery of the required
organisations strategic outcomes. It is outcomes and hence benefits. Strategic
essential that the Program management objectives in turn may not be realised.
frameworks are focused on benefits and the
threats to them. Without realising benefits,
programs should not exist.

c) Benefits realisation should be a standing

agenda item at each Program Board meeting.

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3. Expanded principles (cont.)

Principle 15

Benefits need to be communicated.

Rationale

Benefits need to be communicated to

demonstrate how projects and programs are
performing on their progress towards the
strategic outcomes.

Benefits should be communicated to senior

management, project teams, the wider audience
and any external to the organisation stakeholders.

Communications should include rationale for the

initiative, capabilities delivered and the extent
of benefits being realised or remediation activities
required. Senior management will act
on this information to make informed decisions
on progress (or viability) and will also inform
future decision making.

implications

a) Failure to communicate benefits will result

in insufficient clarity on the progress of the
project or program and may impact the
support for the investment. This may lead
to adverse senior management decisions,
or decisions being made based upon
insufficient evidence.

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More information

Department of Finance, Services and Innovation

McKell Building, 2-24 Rawson Place
Sydney NSW 2000

[email protected]

www.nsw.gov.au