Benefits realization is an essential part of the implementation process for any project or change in an organization - and a crucial factor in achieving success. It is a process that ensures that the expected benefits of an implementation are actually realized. Benefits realization is therefore about identifying, measuring and realizing the benefits that the given implementation or project can bring. It is an important process that must be closely monitored to ensure that the desired benefits are actually realized. Benefit realization is closely related to the organization's strategies, projects, changes and thus also to change management and project management.
What is benefit realization?
Benefits realization is a method of identifying and measuring the financial and non-financial benefits that can be achieved from a given implementation. In other words, benefits realization helps to ensure that goals and benefits are actually realized. It's about identifying the expected goals, creating a plan to achieve them and then measuring the results to ensure that the organization gets the benefits it expects from implementing the given change or project.
How is benefit realization used in practice?
In practice, benefit realization is used to ensure that the expected benefits are achieved. This is done by identifying, measuring and realizing the benefits during the implementation. The method is an integral part of the implementation process, and it is important to focus on benefits realization from the start - it is not something that should be done at the end of a project or change.
How to apply benefits realization to a project or change
Benefit realization involves a number of steps or processes, including:
Identification of benefits:
Identifying benefits starts with an analysis of the company's needs and desires for implementing the change. Start with the goals you have already developed when identifying the general objectives of the project or change - they are closely related and can often be the same. This could be an analysis of financial, strategic or operational benefits, for example.
It is important to involve all relevant stakeholders in the identification process, including managers, employees and customers, so that all aspects are included in the analysis. It's a good idea to use the project or change's stakeholder analysis so that you don't miss any stakeholders.
Benefit realization plans:
Once the benefit opportunities have been identified, a benefit realization plan must be prepared that describes how you will realize the benefits of the project or change. This plan should be the starting point for your work with benefit realization. The plan must be able to be reassessed and adjusted throughout the implementation process - and afterwards.
The benefits realization plan must include a description of measurable indicators to measure the benefits and a timeline for realizing the benefits. The plan should also include a description of the resources and activities needed to achieve the benefits. Remember to assess whether the benefit is worth including as a goal in the project: i.e. how much you will gain from the potential benefit compared to what it will cost in time, resources and money to measure it.
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Measuring gains:
Measuring results is an important part of the benefit realization process. This can be done by measuring financial and non-financial benefits such as savings, efficiency improvements and increased customer satisfaction. Measurements should be done on an ongoing basis to ensure that the benefit realization plan is followed and fulfilled.
It's also important to measure the results on an ongoing basis to ensure that the benefits are actually being realized. It can be beneficial to bring in external experts to assist with the implementation and measurement of results.
Risk management and control considerations in the benefits realization process.
Risk management and control are important factors in the benefits realization process. Unexpected risks and obstacles can arise in the process that can affect the realization of benefits. It is important to identify and assess the risks and develop a plan for how to manage them if they arise. There must also be control mechanisms in place to ensure that the plan is followed and the realization of the benefits goes according to plan.
Follow-up and evaluation:
It is important to continuously follow up on the realization of the benefits and to be specific about how you will follow up and who will do it.
Benefits realization often requires a longer period of time before you can evaluate the benefits of implementing a project or change. Even though the hard work is over in the implementation phase, it's still important to systematize the way you evaluate the benefits.
The benefit realization plan for an implementation requires close follow-up on the realization of the benefits. This can be done, for example, by appointing a project manager who is responsible for following up on the realization of the benefits and ensuring that the plan is closely followed. There must also be open communication about the realization of the benefits so that all relevant stakeholders are informed.
Why benefit realization is important
Benefits realization is important because it ensures that the organization achieves the expected benefits of an implementation. If benefits realization is not closely monitored, it can result in the company not achieving the desired benefits or the achieved benefits being less than expected. This can have negative consequences for the company's performance and competitiveness.
It's also important to remember that realizing benefits is not just about setting goals and measuring results. It's also about identifying opportunities to create benefits, developing a plan to realize them, and creating a culture where benefits realization becomes a natural part of the organization's strategy.
Read more about the prerequisites for success with profit-driven projects in the article here.
The role of leadership and the importance of creating a culture of benefit realization
Management plays a crucial role in the benefits realization process. It is important that management is involved in the identification and planning phase and is responsible for ensuring that the benefits realization plan is closely monitored and updated regularly. Management must have a clear understanding of the organization's goals and strategy, and they must ensure that benefits realization is an integral part of these.
Create a culture focused on the benefits
Benefits realization is an important part of the implementation process in organizations. Therefore, it's essential to stay ahead of one of the biggest challenges: making benefits realization an integral part of the organization's strategy and culture.
Creating a culture of benefits realization in the company can be done by ensuring that all employees understand the importance of the organization's benefits realization and are involved in the processes. There must be open communication about the benefits and employees must be incentivized and motivated to work towards realizing them.
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- Plan and execute projects that don't get derailed or scrapped halfway through
- Create greater positive measurable impact from your implementations
- Create motivation, commitment and followership among those involved
- Translate strategies and decisions into behavioral goals
- Work continuously with concrete behavioral changes
- Dealing with resistance from those involved
- Use learning and benefit realization as an integral part of your implementations
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