9. Benefits & Change Management Flashcards
Where in the process do we think about the benefits of a project?
In te first phases of idea management and business case. When we talk about ideas for improvements, we focus on the benefits. And then in the next phase of business case, we focus on formalising the benefits, but now also focus on cost.
In the two last phases: project portfolio mngmt and application portfolio mngmt there is only focus on quality, costs, risks, etc. Once the decision is made to go forward with the project, no one talks about benefits anymore. Shift focus to other things, often because benefits are hard to measure.
What is the problem of benefits management in practice?
That we only put emphasis on them in the beginning, so we lack a proper assessments of the promised benefits, have they been realized? We don’t know. This leads to not achieving all potential benefits.
Definition of Benefits Management:
“The process of organizing and managing such that the potential benefits arising from the use of IS/IT are actually realized.”
Generic sources of benefit for the different quadrants in the application portfolio:
Support: business efficiency, process elimination and cost reduction.
Key Op: Business effectiveness, business rationalisation and integration.
Strategic: Business innovation and change, business process restructuring.
HP: R&D projects - understanding the benefits and costs something.
What are the steps of the Benefit Management process. Five steps.
- Identify and structure benefits.
- Plan benefits realization
- Execute benefits plan.
- Review and evaluate results
- Potential for further benefits.
First step of Benefits Management: Identify and structure benefits
The basis is to have the IS/IT strategy to understand what we want to do. Then discuss what the objectives means for the organizations and partners –> benefits. Benefits for who? Once you understand the benefits, try to quantify them AND identify dependencies relating benefits to objectives.
From IT to business benefits. How do we get there? Can we just have a new good tech solution to something?
No, tech does not do anything itself, we must have sensible usage of it.
To get there, we need business change - ex train employees. But since it is often met with resistance, before that we must have something that enables the changes, build up incentives!
So from an IT solution, we go via change enablers to business change, and with the business change and IT together, we can achieve the benefits.
Second step of Benefits Management: Plan benefits realization
Here we start analyzing the dependency network (stakeholders). What’s in it for them? How do they benefit and what does it depend on? Should also prepare for presenting the benefits for the management.
How does the stakeholder analysis work?
You identify the key stakeholders and see what potential benefits this project have for each of them. Then look into the needed changes in each group and assess whether they would be resistant or not (relation between the benefits and change required). From this, we can identify which stakeholders we have to manage - those with the largest gap between where they stand today and where we need them to stay in terms of commitment.
When we measure benefits, what types of measures are the best?
The best are those that can be stated in financial terms. But this is often hard. The second best is those that can at least be quantifiable, this is where we hold try to get as a minimum. Th other two: measurable and observable are not as good.
How can we try to measure benefits? 5 ways
- Do a pilot and measure the data from this
- Reference sites
- External benchmarking - looking at how others do and compare
- Modelling or simulation
- Detailed evidence (internal)
Third step of Benefits Management: Execute benefits plan
First, in the execution, we need a baseline measure so that we have something to compare with in the non-supported case.
Then during execution we should continuously monitor interim targets - how far have we come?
Also, always search for other benefits (it is not controlling, it is managing!). Further, we modify benefits plan if the intended benefits are no loner feasible. If very large environment changes –> adapt the whole benefit plan.
Fourth step of Benefits Management: Review and evaluate results
The objectives:
- Maximize the benefits of the particular investment
- Learn how to improve benefits delivery from future investments: identify non-deliveries and why they occured. Review which benefits were achieved (both intended and non-int) and think about causal factors to learn.
- No witch-hunt!!
Fifth (last) step of Benefits Management: Potential for further benefits
Continue thinking about what this new investment can deliver in the future. To maximise the benefit/investment ratio.
Mention some rational resistance in change processes
- Cost-benefit calculation - sometimes some projects are unachievable.
- Insecurities and land of info - current state feels more safe so you need to provide sufficient information
- Falling apart of expenses and benefits - for ex groupware, knowledge management etc. Some people do the job but others get the benefits from it.
- Transaction costs
- Pressure group theory - the loser is often easier to identify than the winner
