Measuring benefits in a project involves a systematic process to ensure the project delivers value aligned with its objectives. This typically follows a structured approach from planning through to post-implementation.
Here's a breakdown of the key steps involved in measuring project benefits:
The Six-Step Process for Measuring Project Benefits
Measuring project benefits is not a single action but rather a continuous process embedded within the project lifecycle and beyond. Based on common project management practices, a structured approach helps ensure benefits are identified, tracked, and ultimately realized. The following steps provide a clear framework:
1. Step one: Identify your objectives and outcomes.
Before you can measure benefits, you must clearly define what the project is intended to achieve. This step focuses on establishing the high-level goals and the desired results or changes that the project aims to deliver.
- Objectives: What are the project's specific goals?
- Outcomes: What changes or results will happen if the project is successful? (e.g., increased efficiency, reduced costs, improved customer satisfaction).
- Example: An objective might be to implement new software. An outcome could be "reduce processing time by 15%."
2. Step two: Identify tangible and intangible benefits.
Once objectives and outcomes are clear, identify the specific benefits that will flow from achieving them. Benefits can be both quantifiable and qualitative.
- Tangible Benefits: These are measurable and often financial. Examples include cost savings, increased revenue, reduced errors, or faster production times.
- Intangible Benefits: These are harder to quantify in monetary terms but are still valuable. Examples include improved employee morale, enhanced brand reputation, increased customer loyalty, or better decision-making.
- Practical Insight: Be specific. Instead of "improved customer satisfaction," think about metrics like "increase Net Promoter Score (NPS) by X points."
3. Step three: Document your benefits.
Formal documentation is crucial for tracking and accountability. Create a Benefits Register or Benefits Realization Plan.
- For each identified benefit, document:
- A clear description of the benefit.
- How it aligns with project objectives and outcomes.
- How it will be measured (the metric).
- The target value for the metric.
- The owner responsible for realizing and measuring the benefit.
- The timing or period when the benefit is expected to be realized.
4. Step four: Capture your baseline measurements.
Before the project causes any change, you need to know the starting point for your metrics. This is called the baseline.
- Measure the current performance level for each benefit metric before implementing the project changes.
- This baseline provides the point of comparison to determine the extent of the benefit realized later on.
- Example: If a benefit is "reduce processing time," measure the average processing time before the new software is implemented.
5. Step five: Realise your benefits.
This step involves the successful implementation of the project's deliverables and the subsequent adoption of the resulting changes by the organization. Benefits are often realized after the project closes, as the new processes or systems are used over time.
- Focus on change management to ensure adoption.
- Ensure the conditions required for benefits to occur are in place.
6. Step six: Monitor your benefits.
Measurement doesn't stop when the project delivers its outputs. Benefits measurement and realization are typically monitored over a sustained period after project completion.
- Regularly collect data for the benefit metrics documented in Step 3.
- Compare the collected data against the baseline (Step 4) and the target values.
- Report on progress towards benefit realization to stakeholders.
- Tip: Set up a schedule for monitoring (e.g., monthly, quarterly) depending on the benefit type and realization timeframe.
By following these steps, organizations can move beyond just delivering project outputs to actively managing the realization of intended business outcomes and value.
