PRINCE2 Business Benefits
Confirming PRINCE2 Business Benefits
Business benefits are recorded in two places within a PRINCE2 project – the Business Case and the Benefits Management Approach. It is the senior user role who is responsible for identifying all of the business benefits that can be realized from the project.
The executive of the project board has the main responsibility for ensuring that the business case represents value for money and that the project is worthwhile.
It is highly likely that actual measurement the business benefits may be by stakeholders outside of the project; for example operational staff who will be using the project product.
All of the business benefits must be measurable in some way and how you plan to measure the business benefits must also be stated. Some business benefits may be realized during the life of the project, and others may not be fully realized until after the project has finished.
As part of the closing the project process, the project manager and will update the benefits review plan to reflect those business benefits that have yet to be realized.
The executive of the project board owns the business case but it is usually a project manager fact as much total work in creating it and updating it at regular points during the project.
Once the project has finished the senior user is held to account by corporate or programme management to ensure that the business benefits are advised by the senior user are fully realized from the products of the project.
For the above reason, the senior user would be advised to include an assessment of how reliable for their business benefits estimates are so that the executive and taken such advice into consideration when drafting the business case.
A useful technique to be used when estimating business benefits that have some unknowns or dependencies on other factors, is to use a best case, the worst case, and like most likely case. This technique is called ‘three point estimating’, and a simple averaging formula can be used to calculate the mean of the business benefits which is then used within the business case and the benefits review plan.
Of course, dis-benefits must also be captured as these are the negative outcome or disadvantage of running the project, and should be factored into the business case.
Sensitivity analysis is another technique that can be used to determine how sensitive the business case is to certain scenarios. ‘What if’ calculations can be used here to see how sensitive the costs and business benefits are to uncertain situations – such as currency exchange rates for example.
In this way, the project can determine at what point such scenarios would cause the project and the reduced business benefits to become non-viable.
PRINCE2 Business Benefit Reviews
Benefit reviews should be held throughout the project particularly at the end of each stage to ensure that the project continues to deliver what you expect or otherwise. If the business benefits are significantly less than predicted, then the question needs to be asked as to why that is and some corrective action be taken.
When identifying business benefits in the first place, it may not be immediately obvious what such benefits are, and best practice suggests that pre-project data needs to be collected so that the business benefits can use post-project data to confirm that the end-product has indeed delivered the benefits.
Remember that the business benefits verses the costs are the driving force behind a project, and it is important in the early enthusiasm for the project does not encourage the benefits being overstated as this may cause approval of a project that should really not go ahead in the first place.
Another danger here is that the project is seen has a success providing that the end-product meets the acceptance criteria of the users, but that is due to over optimistic benefit statements, that such business benefits do not meet the organizations’ expectations, then the project may be seen as less successful (which is not true!)
Measuring Business Benefits
In terms of the cost of measuring business benefits during a project, it is important that the project manager includes such activities and resources within the project plan and stage plans.
For any benefit reviews that need to occur after the project (because the benefits have yet to be realized), such activities and resources needed to be passed back to the organization in the form of ‘follow-on action recommendations’ when carrying out the ‘closing the project’ process.
In a typical organization there may be many operational managers who will use the projects end-product, and therefore there should be taken to isolate benefits from non-project factors to ensure that you can prove that the stated business benefits were related directly to your project.
The business case includes information on how business benefits will be measured, but the benefits review plan describes when the business benefits will come on stream, and when they can be measured (which may be a considerable time after the business benefits have been realized.
This time gap of waiting until the business benefits are realized can be caused by factors such as training to use the new system resulting in a settling down time until the system can be used at its maximum efficiency and hence deliver the project products benefits.
Benefits Management Approach
Finally, we are the typical contents of a Benefits Management Approach:
Scope. What business benefits are to be measured
Accountability. Who is accountable for the business benefits (this is usually the senior user)
How and when business benefits will be measured
Resources needed for business benefits reviews
Baseline measures. The pre-project business benefits measurements.
How will the projects product will be reviewed. This measures the success of the project end-product (usually in terms of its acceptance criteria), and not the business benefits.
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