Having trained individuals and companies on strategic project management as well as certification prep for PMP exams, one question that I always repeatedly have to emphasize is the differences between benefit and value. Even experienced professionals don't articulate these things clearly differentiating how a business case differs from project charter and why it is the foundation for any project or program. I normally try to give examples from the various industries connecting these thoughts. Interestingly, I found a simple and more effective example when I took my son for the orthodontic dental exam.
As most orthodontic exams do, these exams focused on oral health focusing on teeth alignment using dental braces and retainers. Having gone through a few sessions, the dental assistant asked if my son was using retainers and brushing after heavy meals. My son was responding that he was occasionally doing them and not always using the retainers. The dental assistant replied, "You can only get the value of the retainer if you use it for its intended benefit!" Wow, two words, "Value" and "Benefit" used in the same sentence and made me connect how simple these concepts are. The dental office is providing the benefit by giving the retainers. Only when the retainer is used as required, the benefit is realized! That extent of timely benefit realization is the value for the customer!
- So, in projects or programs, the deliverables (requirements, design, user stories, etc.) as part of the release, phase, iteration or sprint is just giving the output.
- But, when these outputs are integrated towards a minimum viable product (MVP) or minimum business increment (MBI), then, these are providing capabilities. That means functionally they are available but operationally they are not ready.
- When all these capabilities are integrated and transitioned, the combined capabilities become the outcome. Note that transitioned means, the outcome is in an operational state. If the project is not dependent on other project capabilities, then, these capabilities become the outcome. If there are multiple projects working coherently, then, all these capabilities from multiple projects have to be integrated further to generate the outcome.
- When these outcomes are utilized, then they serve as the benefit. Nevertheless, the benefit is what the performing organization is delivering to the customers.
- Only when the customers use the benefit appropriately or realize an improvement over time, the value is recognized.
Sometimes, the simpler examples bubble up to the top to illustrate these concept. Different projects may have been involved in creating the various retainers based on various conditions. These projects may have to be working with other suppliers and vendors, who may have their own projects, to integrate these products, manufacture, and ship them to the dental offices. The manufacture may have realized some benefit because the dental offices paid for the retainers. But, has the dental office realized the benefit? Not until the patients come for regular orthodontic exams and use them. As the people play different persona in the value chain, the concepts of output, capability, outcome, benefit, and value also change. Nevertheless, value is realization of benefit delivered, benefit is the integration of multiple outcomes from one or more projects, and outcomes are the systemic integration of various outputs identified to be delivered at different points in time!
I guess, when we are ready, we see the explanations in daily life!
What do you think? Thoughts? Please share.
