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So where do benefits come from?

SERIES ARTICLE

Advances in Project Management

By Prof Darren Dalcher

Director, National Centre for Project Management
University of Hertfordshire

United Kingdom


Benefits are increasingly discussed in the context of project delivery. The sixth edition of the APM Body of Knowledge lists benefits management as one of the core areas addressed under the heading of scope management, thus reflecting the assertion that the planned objectives of projects can ‘be defined in terms of outputs, outcomes or benefits’ (p. 12).

The APM Body of Knowledge asserts that delivering benefits is the primary reason for organisations to undertake change. Benefits management is therefore defined as ‘the identification, definition, planning, tracking and realisation of business benefits’ (p. 124). The benefits may be expressed as tangible quantities, often measured in monetary terms, or as intangible qualities (for example, corporate reputation, or capability for rapid change).

However, if project delivery is focused on the handover of outputs, there is a need to identify the interface with the realisation of benefits required to make the change meaningful and attain the business benefits identified at the outset.

The information paradox and the emergence of benefits

The very concept of benefits has emerged from the information systems domain in an effort to quantify the impact and scale of proposed investment in Information Technology (IT) projects. IT spending is often the largest capital investment for many enterprises. In the 1980s, there was a rush to increase IT spending, however, the ability to justify such investments in terms of real value was seriously lacking.

The inability to prove the value of IT investments galvanised John Thorp and a team of IT consultants and practitioners within Fujitsu to define a set of methods, tools and techniques to improve the effectiveness of IT investment projects. The result was the publication of the Information paradox in 1998 (and subsequent revision and enhancement in 2003).

The key finding was that new IT, by itself, delivers no discernible value. Value can only be created and sustained through the actual use of the new IT systems. Selection and management of IT-enabled investments in organisational change becomes critical to performance. Realising value from the investment requires action beyond the mere delivery of IT systems; it necessitates real change within the organisation to enable the new systems to be utilised. The change would often impact many other aspects including: the nature of the business itself; business processes; skills and competencies; and the organisation. Such change, which is not IT-specific, or even project related, could often account for up to 80% of the total investment.

In order to advance an approach capable of identifying and delivering clear and significant business results, Thorp identified the need for three fundamental shifts (see Table1):

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Editor’s note: The PMWJ Advances in Project Management series includes articles by authors of program and project management books published by Gower and other publishers in the Routledge family. Each month an introduction to the current article is provided by series editor Prof Darren Dalcher, who is also the editor of the Gower/Routledge Advances in Project Management series of books on new and emerging concepts in PM. Prof Dalcher’s article is an introduction to the invited paper this month in the PMWJ.

 


 

About the Author


Darren Dalcher, PhD

Series Editor
Director, National Centre for Project Management
University of Hertfordshire, UK

 


Darren Dalcher
, Ph.D. HonFAPM, FRSA, FBCS, CITP, FCMI, SFHEA is Professor of Project Management at the University of Hertfordshire, and founder and Director of the National Centre for Project Management (NCPM) in the UK. He has been named by the Association for Project Management (APM) as one of the top 10 “movers and shapers” in project management in 2008 and was voted Project Magazine’s “Academic of the Year” for his contribution in “integrating and weaving academic work with practice”. Following industrial and consultancy experience in managing IT projects, Professor Dalcher gained his PhD in Software Engineering from King’s College, University of London.

Professor Dalcher has written over 150 papers and book chapters on project management and software engineering. He is Editor-in-Chief of Software Process Improvement and Practice, an international journal focusing on capability, maturity, growth and improvement. He is the editor of the book series, Advances in Project Management, published by Gower Publishing of a new companion series Fundamentals of Project Management. Heavily involved in a variety of research projects and subjects, Professor Dalcher has built a reputation as leader and innovator in the areas of practice-based education and reflection in project management. He works with many major industrial and commercial organisations and government bodies in the UK and beyond.

Darren is an Honorary Fellow of the APM, a Chartered Fellow of the British Computer Society, a Fellow of the Chartered Management Institute, and the Royal Society of Arts, and a Member of the Project Management Institute (PMI), the Academy of Management, the Institute for Electrical and Electronics Engineers, and the Association for Computing Machinery. He is a Chartered IT Practitioner. He is a Member of the PMI Advisory Board responsible for the prestigious David I. Cleland project management award and of the APM Professional Development Board. Prof Dalcher is an academic advisor for the PM World Journal. He can be contacted at [email protected]

To see other works by Prof Darren Dalcher, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/darren-dalcher/