Qualifying Benefits in Benefits Management

As I was delivering a Program Management certification training, there were some discussions around the phrase, "Qualify Benefits" (Project Management Institute, 2024). Now, I have already blogged about what benefits mean (Rajagopalan, 2020) even within the context of strategic project management (Rajagopalan, 2021) and in a few follow-up discussions, it was clear to me that the action-oriented adjective, "Qualify," needs some explanation. 

"Qualify benefits" in the context of program benefits management refers to the process of defining, assessing, and validating the potential benefits that a project or program is expected to deliver. This involves several key steps. Let us consider an example of a company implementing a new customer relationship management (CRM) system as we identify some activities for each step listed here.

1. Identification of Benefits:

• Strategic Alignment: Ensure that the identified benefits align with the organization’s strategic goals and objectives.
• Stakeholder Input: Engage with stakeholders to gather their perspectives on potential benefits, ensuring that all relevant benefits are considered.

For the CRM system, the potential benefits include improved customer satisfaction, increased sales, and enhanced data analytics capabilities.

2. Definition of Benefits:

• Clear Description: Clearly describe each benefit, including what it is, who will benefit, and how it will be realized.
• Measurability: Define how the benefit will be measured. This often involves establishing key performance indicators (KPIs) or metrics.

The CRM system must define benefits like the a) improved customer satisfaction measured by Net Promoter Score (NPS), b) increased sales measured by revenue growth percentage, and c) enhanced data analytics capabilities measured by the reduction in time taken to generate reports.

3. Assessment of Benefits:

• Quantitative Assessment: Where possible, quantify the benefits in financial terms (e.g., cost savings, revenue growth) or other measurable units (e.g., time saved, customer satisfaction scores).
• Qualitative Assessment: For benefits that are difficult to quantify, provide a qualitative assessment (e.g., improved employee morale, enhanced brand reputation).

The CRM can perform this assessment either qualitatively or quantitatively or a combination of both approaches. The quantitative approach may assess the increased sales by 10% within the first year. The qualitative approach my assess the improved decision-making capabilities through better data insights.

4. Validation of Benefits:

• Feasibility Analysis: Assess whether the benefits are realistically achievable given the resources, timeframes, and constraints of the project or program.
• Risk Assessment: Identify and evaluate risks that might impact the realization of the benefits and develop mitigation strategies.

Validation may employ multiple approaches as well. For example, the CRM may validate feasibility (technical, operational, environmental) feasibility. An example could be validating that the CRM system integrated with existing systems and that training plans are in place.

Another validation is the ongoing risk management throughout the benefit lifecycle. Example risks may involve identifying potential resistance from sales teams and planning for change management initiatives. Quality is a function of risk (Rajagopalan, 2023b) and so it is critical for one to consider multitude of risks for risk driven development. 

5. Documentation and Communication:

• Benefits Register: Document all identified and qualified benefits in benefits register or benefits realization plan.
• Stakeholder Communication: Communicate the qualified benefits to all relevant stakeholders, ensuring transparency and buy-in.

The CRM documentation may involve creating a benefits realization plan outlining these benefits, how they will be measured, and who is responsible for them. The CRM documentation plan may also deeply engage in the transition (Rajagopalan, 2023a) and sustenance plan so that component transition can continue with benefit sustenance in operations. 

6. Establishment of Monitoring and Evaluation Framework:

• Tracking Mechanisms: Set up mechanisms to monitor the progress towards achieving the benefits throughout the lifecycle of the project or program.
• Review and Adjust: Regularly review the benefits realization progress and make necessary adjustments to ensure that the benefits are on track to be realized.

Examples of tracking systems for a CRM may involve regularly tracking NPS scores, revenue growth, and reporting times. Similarly, the review and adjust approaches may pivot around the monthly review meetings to assess progress and address any issues.

By qualifying benefits early and continuously, organizations can ensure that their projects and programs are aligned with strategic goals, have clearly defined and achievable outcomes, and provide measurable value to stakeholders.

References

Project Management Institute (2024). The Standard for Program Management. 5th Edition. Newtown Square, PA: Project Management Institute.

Rajagopalan, S. (2020, August 14). Lessons learned on Strategic Project Management from a Dental Visit. Retrieved June 16, from https://agilesriram.blogspot.com/2020/08/lessons-learned-on-strategic-project.html

Rajagopalan, S. (2021, June 14). How different is Strategic Project Management? Retrieved June 16, 2024, from https://agilesriram.blogspot.com/2021/06/how-different-is-strategic-project.html

Rajagopalan, S. (2023b, March 10). Quality is a function of Risk. Retrieved June 16, 2024, from https://agilesriram.blogspot.com/2023/03/quality-is-function-of-risk.html

Rajagopalan, S. (2023a, October 23). TREAD carefully to transition benefits. Retrieved June 16, 2024, from https://agilesriram.blogspot.com/2023/10/tread-carefully-to-transition-benefits.html