Feb 16 / Anna Bromley

Managing Benefits: Ensuring Transformation Programmes Deliver Value

Introduction

In this article, I will be taking best practice guidance from the book, The Effective Change Manager's Handbook: Essential Guidance to the Change Management Body of Knowledge and detailing what good benefits management looks like for large companies that carry out transformation programmes.
I will also be sharing several visuals, models and templates to add clarity to the theory written here on benefits management. These include: 

  1. The Benefits Management Model
  2. The Service Profit Chain  
  3. The Benefits Dependency Network 
  4. An Example Benefits Map
  5. A Benefits Profile Template 
  6. A Multi Criteria Analysis Template 
  7. A Benefits Realisation Plan Template 
  8. The Transition and Benefits Realisation Model
  9. A Reporting Template  
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In this article I will cover the following topics:

  1. What is a benefit?
  2. What is benefits management?
  3. Benefit management principles
  4. Common mistakes
  5. Keys to success
  6. Benefits identification mapping and analysis
  7. Example benefits
  8. Cognitive bias
  9. Organisational pressures affecting benefits and forecasting
  10. How to get more reliable benefits forecasting
  11. What a benefits profile is
  12. How to plan benefits realisation
  13. Financial analysis of non financial benefits 
  14. Benefits validation
  15. Benefits prioritisation baselining 
  16. Identifying threats to benefits optimisation
  17. The benefits realisation plan
  18. Measuring and reporting on benefits
  19. Identifying emerging benefits and dis-benefits
  20. Reporting and benefits realisation
  21. Identifying when intervention action is required
  22. Key Questions for Businesses to Reflect on 

Let's dive in... 
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What is a Benefit?

Benefits are defined as measurable improvements perceived as positive. They can encompass:

  1. Increasing revenue
  2. Reducing costs
  3. Meeting legal or regulatory requirements
  4. Maintaining current systems
  5. Contributing to achieving strategic objectives
  6. Reducing risks to achieving strategic objectives

Additionally, there are emergent benefits, which are unplanned but arise during the initiative.

Many change initiatives struggle to deliver the benefits they were designed to achieve, with 70% of such initiatives failing. A key reason for the focus on benefits management is the consistently poor track record of change initiatives in realising their intended benefits.

What is Benefits Management?

Quite simply, benefits management involves the identification, quantification, analysis, planning, tracking, realisation, and optimisation of benefits.

Benefit Management Principles

These principles guide effective benefits management:

  1. Align benefits with strategy – Understand how change initiatives contribute to organisational objectives.
  2. Start with the end in mind – Define the scope of the initiative based on the benefits required.
  3. Utilise successful delivery methods – Adopt agile, iterative approaches (think dolphins, not whales) with rigorous start gates, regular reviews, and incorporating customer feedback.
  4. Integrate benefits with performance management – Link benefits to both operational and HR performance systems.
  5. Manage benefits from a portfolio perspective – Ensure alignment with organisational objectives, promote good practice, and avoid double counting.
  6. Effective governance – Clearly define roles, responsibilities, and accountability.
  7. Develop a value culture – Shift from a delivery-focused mindset to one that prioritises value creation.
  8. Identify all Benefits – All potential sources of value are identified.
  9. Implement enabling changes – The necessary enabling, business, and behavioural changes are implemented.
  10. Capture emergent benefits – Emergent benefits are captured, and dis-benefits are minimised.
  11. Realise benefits early – Benefits are realised early and sustained for as long as possible.

Benefits Management Model (Jenner 2013). 

Service Profit Chain - Principle 1, align benefits with strategy. 

Common Mistakes

These are some of the common mistakes made in benefits management:

  1. Overfocus on tracking forecast benefits while ignoring emergent benefits.
  2. Treating benefits management as a box-ticking exercise.
  3. Assigning blame if things don’t work out as planned.

Keys to Success

These are the key elements for successful benefits management:

  1. Active – Ongoing participative stakeholder engagement ensures alignment and commitment.
  2. Evidence-based – Decisions and actions should be driven by evidence rather than assumptions or advocacy.
  3. Transparent – Maintain a clear line of sight from objectives to benefit forecasts and their realisation.
  4. Benefit-Led – Focus on the tangible difference the initiative is making.

Benefits Identification, Mapping, and Analysis

Effective benefits management begins with identifying, mapping, and analysing potential benefits. Here are key techniques to achieve this:

  1. Process Mapping – Visualise current processes to identify inefficiencies and areas where improvements can deliver benefits. For example, mapping a customer onboarding process might reveal delays that, if addressed, could enhance customer satisfaction.
  2. Value Stream Analysis – Analyse the flow of materials and information to pinpoint non-value-adding activities. This helps focus on changes that deliver the most significant benefits, such as reducing waste in a production line.
  3. Benefits Discovery Workshop – Engage stakeholders in collaborative sessions to uncover potential benefits. For instance, a workshop with cross-functional teams might reveal unexpected opportunities for cost savings or revenue growth.
  4. Benefits Map – Create a visual representation of how specific changes lead to desired benefits. This helps clarify the cause-and-effect relationship, such as linking a new IT system to improved operational efficiency.
  5. Benefits Dependency Network – Map out the dependencies between changes and benefits to ensure all necessary actions are taken. For example, a new training program might be required to realise the benefits of a technology upgrade.
  6. Benefits Logic Map – Develop a logical framework that connects activities, outputs, and outcomes to benefits. This ensures a clear understanding of how initiatives contribute to strategic goals, such as linking process improvements to increased profitability.

These techniques provide a structured approach to identifying and analysing benefits, ensuring they are clearly defined and aligned with organisational objectives.

Example Benefits

When managing change, it’s important to identify both intermediate benefits (short-term gains) and end benefits (long-term outcomes). Here are some examples to look out for:

  1. Time savings – Faster processes or reduced delays.
  2. Cost savings – Lower operational or production costs.
  3. User experience – Enhanced satisfaction for customers or employees.
  4. Reduced re-work – Fewer errors and corrections needed.
  5. Reduced workload – Less effort required for tasks.
  6. Reduced admin – Streamlined administrative processes.
  7. Improved staff satisfaction – Higher employee engagement and morale.
  8. Increased referrals – More recommendations from satisfied customers.
  9. Earlier payments – Faster receipt of customer payments.
  10. Improved compliance – Better adherence to regulations.
  11. Earlier invoicing – Quicker issuance of invoices.
  12. Earlier receipt of income – Faster revenue generation.
  13. Reduced working capital – Lower funds tied up in operations.
  14. Improved employee morale – Happier, more motivated staff.
  15. More accurate management information – Better data for decision-making.
  16. Space/accommodation savings – Reduced need for physical resources.

A Benefits Dependency Network for a new CRM System at a European Paper Manufacturer (Ward and Daniel, 2006).

Tell Us Once Benefits Logic Map, Change Managers Handbook, pg. 147. 

Cognitive Bias 

Cognitive biases can significantly impact benefits management by distorting judgment and decision-making. Being aware of these biases helps ensure more accurate benefit forecasts and realistic planning.

Common Biases:

  1. Delusional Optimism – Overstating potential benefits and underestimating likely costs.
  2. Confirmation Bias – Selecting evidence that confirms existing beliefs or assumptions.
  3. Planning Fallacy – Believing failure won’t happen to you, only to others.
  4. Loss Aversion – Valuing losses more heavily than equivalent gains.
  5. Anchoring – Relying too heavily on the first estimate or piece of information.


Organisational Pressures Affecting Benefits Forecasting 

Organisational pressures can distort benefits forecasting, often leading to unrealistic expectations or misaligned priorities. These pressures can amplify cognitive biases, such as delusional optimism or confirmation bias, further skewing forecasts.

Benefits should be identified to manage their realisation effectively, not merely to justify investment costs. Be cautious of:

  1. Ignoring risks and assumptions – Overlooking potential challenges or uncertainties.
  2. Deliberate double counting – Counting the same benefit more than once.
  3. Not validating benefits with key stakeholders – Failing to gain alignment or input from those affected.
  4. Claiming staff time savings in full – Assuming all saved time can be reallocated productively.
  5. Overvaluing benefits – Exaggerating the impact or value of expected benefits.
  6. Failing to account for dis-benefits – Neglecting negative outcomes or trade-offs.
  7. Ignoring some of the costs required to realise benefits – Underestimating the resources needed to achieve benefits.

Awareness of these pressures ensures more accurate and realistic benefits forecasting


More Reliable Benefits Forecasting

Being aware of cognitive biases and organisation pressures is one thing, but accurate benefits forecasting is also critical for successful change initiatives. Here are some key strategies to improve reliability:

  1. Strong leadership encouraging honesty – Foster a culture where realistic assessments are valued over overly optimistic projections.
  2. Effective accountability frameworks – Ensure clear ownership and responsibility for benefit delivery.
  3. Benefits validated before investment – Confirm the feasibility and value of benefits before committing resources.
  4. Regular and robust reviews – Continuously assess progress and adjust forecasts as needed.
  5. Reference class forecasting – Use data from similar projects to inform estimates rather than relying solely on detailed, speculative plans.
  6. Using probabilities – Incorporate likelihoods to account for uncertainty in benefit realisation.
  7. The wisdom of crowds – Leverage group input, as collective estimates are often more accurate than individual predictions.

What is a Benefits Profile?

Now we are aware of the common mistakes, benefits process, principles, cognitive bias, organisational pressures, and how we can forecast benefits more accurately, it’s time to profile our benefits! A benefits profile is a structured record that captures key details for each identified benefit, ensuring clarity and accountability throughout the change process.

It typically includes the following fields:

  1. Benefit category type – Classifies the benefit (e.g., financial, operational, strategic).
  2. Benefit description – A clear explanation of the benefit and its impact.
  3. Stakeholders – Identifies those affected by or responsible for the benefit.
  4. Costs – Outlines the resources required to realise the benefit.

This information can be summarised into a single document, with columns for the key details and rows for each benefit, providing a clear and concise overview.

Benefits Profile Template 

Planning Benefits Realisation and Financial Analysis of Non-Financial Benefits

Planning benefits realisation and assigning monetary values to non-financial benefits can be challenging but is essential for effective decision-making. To address this complexity, several techniques can help ensure accuracy and clarity.

Techniques for Assigning Monetary Values to Non-Financial Benefits:

  1. Revealed Preferences – Compare values based on observed behaviour in similar situations (e.g., property prices near and away from a flight path).
  2. Stated Preferences – Use questionnaires or surveys to gather estimates directly from stakeholders.
  3. Cost-Benefit Analysis – Best suited for objectives tied to increasing revenue or reducing costs.
  4. Cost-Effectiveness Analysis – Compare different approaches to achieving the same outcome, typically choosing the option with the lowest Net Present Value (NPV). This is particularly useful for legal, compliance, or business-as-usual (BAU) scenarios.
  5. Multi-Criteria Analysis – List decision factors under categories like attractiveness and achievability, assign weights to these factors, and score the options to determine the best choice.

These techniques provide structured ways to evaluate and plan for both financial and non-financial benefits, ensuring a more robust benefits realisation process.

Multi-criteria analysis template

Benefits Validation: Ensuring Realised Value from Change Initiatives

Benefits validation is a critical process in change management that ensures the anticipated benefits of a change initiative are clearly defined, measurable, and aligned with organisational goals. It involves a series of checks to confirm that the benefits are realistic, achievable, and properly tracked. Here’s how the process typically works:

  1. Checks for consistency with benefit eligibility rules: Ensures that the claimed benefits align with predefined criteria and rules for what qualifies as a valid benefit.
  2. Check for dependencies with initiatives elsewhere: Identifies whether the benefits rely on other projects or changes within the organisation, ensuring a holistic view of their achievability.
  3. Checks with the benefit owner - usually the operations managers: Confirms accountability by verifying the benefits with the individuals responsible for delivering them.
  4. ‘Booking Benefits’ wherever possible: This step involves formally recording benefits to ensure they are tracked and realised. It includes:

    Cashable efficiency savings:     Recorded in unit budgets, costs, or headcount reductions.

    Non-cashable efficiency improvements: Documented as planned performance improvements.

    Non-financial strategic contributions and performance improvements: Updated in strategic or business delivery plans.

    Benefits generally: Incorporated into individuals' performance targets to ensure accountability and alignment with organisational objectives.

By rigorously validating benefits, organisations can ensure that their change initiatives deliver tangible value and contribute to long-term success.

Benefits Prioritisation: Aligning Change Initiatives with Strategic Goals

Benefits prioritisation is a structured process that helps organisations focus their resources and efforts on the change initiatives that deliver the greatest value. By assessing and ranking benefits based on their alignment with strategic objectives, organisations can ensure that the most impactful initiatives are prioritised. Here’s how the process works:

Allocate percentage ratings to each investment objective (so they total to 100%): Assign weightings to reflect the relative importance of each objective, ensuring that the prioritisation reflects organisational priorities.

This approach ensures that change initiatives are aligned with what matters most to the organisation, enabling smarter decision-making and resource allocation.

Baselining Benefits: Establishing a Foundation for Measuring Success

Baselining benefits is a crucial step in change management that involves setting a clear starting point against which future performance and benefits can be measured. By capturing the current state of key metrics, organisations can accurately track progress and demonstrate the impact of change initiatives. Here’s how the process works:

  1. Relate baseline measures to existing data from an organisation’s Management Information: Use current data sources to establish a reliable and consistent starting point for measuring benefits.
  2. Start benefit tracking early: Begin monitoring benefits as soon as possible to ensure a comprehensive understanding of the change’s impact over time.

Baselining provides the foundation for effective benefit measurement, enabling organisations to make informed decisions and demonstrate the value of their change initiatives.

Identifying Threats to Benefits Optimisation: Safeguarding the Value of Change Initiatives

Identifying threats to benefits optimisation is a critical step in ensuring that the anticipated value of change initiatives is fully realised. By proactively recognising potential risks, organisations can take steps to mitigate them and protect the success of their projects. Here are the key threats to watch for:

  1. Forecasting failure: Benefits are either not identified or are overestimated, leading to unrealistic expectations.
  2. Delivery failure: Delays or issues in project delivery impact the timing and scale of benefits realisation.
  3. Business and behavioural change failure: Dependencies on which the change relies cause delays or hinder progress.
  4. Benefits management failure: Failure to capture emergent benefits or dis-benefits, resulting in incomplete tracking of outcomes.
  5. Value for money failure: Benefits are realised but at an excessive cost, reducing overall value.

By identifying and addressing these threats, organisations can enhance their ability to optimise benefits and achieve the intended outcomes of their change initiatives.

Benefits Realisation Plan

The benefits realisation plan summarises the information included on the benefit profiles and will include and will include an analysis of the benefits o be realise over the coming planning period, which is usually one year. 

The benefits realisation plan should be reviewed regularly, and in particular, at key stages in the delivery such as stage gate reviews. 

Benefit Realisation Plan Template 

Measuring and Reporting on Benefits Realisation: Tracking Success and Informing Decisions

Measuring and reporting on benefits realisation is essential for understanding the impact of change initiatives and ensuring they deliver the intended value. By establishing clear metrics and reporting mechanisms, organisations can track progress, demonstrate accountability, and make informed decisions. Here’s how the process works:

  1. At least one measure should be identified for each benefit: Ensures that every benefit is quantifiable and progress can be monitored.
  2. There are different types of measures:

    Leading measures of enabling changes:     Track early indicators that enable benefits to be realised.

    Lagging measures of end benefits:     Assess the final outcomes and impact of the change.

    Proxy indicators:     Use indirect measures, such as GDP as a proxy for standard of living, when direct measurement is challenging.

    Evidence events:     Specific milestones, such as a sponsor speaking to front-of-house staff about observed improvements.

    Case studies and stories:     Capture good or bad news and lessons learned to provide qualitative insights.

    Surveys:     Gather feedback from users, staff, and management to assess perceptions and experiences.

By employing a mix of measures and reporting methods, organisations can gain a comprehensive understanding of benefits realisation and ensure their change initiatives deliver lasting value.

Optimise benefits realisation by actively managing planned benefits, capturing and leveraging emergent beenfits, and minimising and mitigating any dis-benefits.

Identifying Emergent Benefits and Dis-benefits: Capturing Unexpected Outcomes

Identifying emergent benefits and dis-benefits is a vital part of change management, as it allows organisations to recognise and respond to unexpected outcomes—both positive and negative—that arise during the change process. By staying alert to these possibilities, organisations can adapt and maximise the value of their initiatives. 

Here’s how to approach this:

  1. Lessons learned and opportunities should be assessed at each delivery stage gate: Regularly review progress to identify new benefits or potential dis-benefits at key milestones.
  2. Apply a scout and beacon approach: Scouts actively scan the environment for emerging opportunities, while beacons create a visible and welcoming environment for sharing ideas.
  3. A real and ongoing dialogue with users: Maintain open communication with users to gather insights and feedback, ensuring that emergent benefits and dis-benefits are identified and addressed promptly.

By proactively identifying and managing emergent outcomes, organisations can enhance the success of their change initiatives and ensure they deliver maximum value.

Scouts: your eyes and ears

Reporting and Benefits Realisation: Communicating Progress and Outcomes

Reporting and benefits realisation are essential for tracking the success of change initiatives and ensuring stakeholders are informed about progress and outcomes. Effective reporting provides clarity, accountability, and a basis for decision-making. 

Here’s how to approach it:

  1. Dashboard reporting: Use a consistent format and KPIs at the portfolio level, enabling easy drill-down into specific details.
  2. Using a normalised scale: For benefits with different types of measures, assign a value of 1 where realisation matches the plan, >1 where it exceeds the plan, and <1 where it falls short. This approach is particularly useful for non-financial benefits and can also be expressed as a percentage for easier understanding. Weighting can be applied to reflect the significance of specific benefits.
  3. Utilise the benefits map for reporting: Apply RAG (Red, Amber, Green) ratings to enabling and business changes to provide a clear visual representation of progress and risks.

By adopting these reporting practices, organisations can effectively communicate the status of benefits realisation and ensure alignment with strategic objectives.

Reporting using a normalised scale, Dellar Limited, Change Managers Handbook, pg. 168

Identifying When Intervention Action is Required: Proactively Managing Risks and Issues

Identifying when intervention action is required is a critical aspect of change management, ensuring that potential risks and deviations from the plan are addressed promptly to keep initiatives on track. By establishing clear monitoring and escalation processes, organisations can take timely action to safeguard benefits realisation. Here’s how to approach this:

  1. Have one version of the truth: Use an authoritative source of information for reporting to ensure consistency and accuracy.
  2. Clear line of sight reporting: Ensure that reporting clearly demonstrates the strategic contribution of an initiative, aligning progress with organisational goals.
  3. The Pareto 80:20 rule: Focus on the benefits that deliver the greatest contribution, prioritising efforts where they will have the most impact.
  4. Management by exception: Only escalate variances from the plan that exceed a preset control limit, allowing for efficient and targeted intervention.

Key Questions for Businesses to Reflect on 

Here are some key questions to help businesses reflect upon their approach to benefits management: 

  1. Ownership: Should the benefits be owned by the appropriate business managers?
  2. Data Collection: Are we expecting business managers to provide inputs and support in capturing measurement data for tracking benefit achievement?
  3. Portfolio Perspective: Should we be managing benefits from a portfolio perspective?
  4. Cause-and-Effect Relationships: What is the cause-and-effect relationship between elements in our business model (e.g., internal service quality > employee satisfaction > customer value > increased revenue)?
  5. Benefits Eligibility Rules: What are our benefits eligibility rules—how are benefits categorised, quantified, valued, and validated?
  6. Benefit Categories: What are our defined benefit categories?
  7. Strategic Objectives: What are our strategic objectives, and are they sufficiently granular to measure the contribution of a change initiative?
  8. Embedding Accountability: How will the benefits management approach be embedded into current change/project activities to ensure accountability?

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