Benefits Realization Management: Ensuring business analysis delivers ROI

Transcription

1 2014 BA Convention Benefits Realization Management: Ensuring business analysis delivers ROI Prasad Kamath Board Member of International Requirements Engineering Board (IREB), Germany

2 2014 BA Convention 2 Defining Click to edit business Master text analysis styles Is business analysis concerned with simply building a system? When organizations approve funding for projects, do they simply expect a fully-working system to be delivered by the pre-defined go-live date? How many systems have you seen being scrapped within months of being delivered? Business analysis is the practice of enabling change in an enterprise by defining needs and recommending solutions that deliver value to stakeholders.

3 2014 BA Convention 3 Business Click to edit analysis Master text and styles business benefits Business analysis is not about simply building and delivering a system to signed-off requirements specifications. It s about delivering business benefits. Business benefits are delivered when business problem(s) are eliminated and / or business opportunities are leveraged and / or applicable legal and regulatory requirements are complied with.

4 2014 BA Convention 4 What is a benefit? Click to edit Master text styles A benefit is an outcome of change, which is perceived as positive by a stakeholder. Examples of benefits: Reduced loan application approval cycle time Increased productivity of operations staff Reduced rework Increased sales revenues A benefit to one stakeholder might be a dis-benefit to another stakeholder. A dis-benefit is an outcome of change, which is perceived as negative by a stakeholder.. Dis-benefits are a source of stakeholder risk!

5 2014 BA Convention 5 Categories of benefits Click to edit Master text styles There are different ways to categorize benefits. Here s one common categorization scheme: 1. Financial (e.g. reduced costs) 2. Non-financial Tangible (e.g. increased productivity) 3. Non-financial Intangible (e.g. improved brand image) In most change initiatives, the majority (typically about 90 per cent) of benefits are non-financial. Intangible non-financial benefits should be avoided in a project s Benefits Realization Plan, as far as possible, since, the realization of benefits that cannot be measured, cannot be managed and such benefits cannot be confirmed to be realized!!

6 2014 BA Convention 6 Some statistics Click to edit Master text styles Only 35 per cent of organizations currently measure the expected benefits from planned changes. A survey indicates that only 25 per cent of the programs / projects which measure benefits actually see results in line with expectations.

7 2014 BA Convention 7 Benefits Click to edit realization Master text and styles change management Benefits realization management refers to the activities and techniques for defining, creating, maximizing and sustaining benefits provided by projects and programs, by tracking and assessing benefits throughout the project or program lifecycle. Benefits management is closely related to organizational change management. Project or program benefits are the result of changes in business practices that are enabled by the project / program. Benefits cannot be realized unless the associated business practices, processes and the behaviors of the end users of those practices and processes undergo a positive change.

8 2014 BA Convention 8 Benefits Click to edit realization Master text management styles Business changes link project outputs to benefits. Project outputs (or deliverables) Changes in related business practices Associated benefits realized Benefits cannot be directly made to happen but changes can be made to happen. Changes cost money but benefits do not have a direct cost. Managing delivery of the project outputs is the primary responsibility of the Project Manager. Managing the business changes related to the project outputs to ensure the realization of the expected benefits is the primary responsibility of the Business Analyst.

9 2014 BA Convention 9 Benefits Click to edit dependency Master text styles map Project Output (e.g. e-commerce system Business Change (e.g. preparations & Training) Project Outcome (e.g. new system operational, taking orders) Intermediate Benefit (e.g. increased online orders) End Benefit (e.g. increased sales revenues) Strategic Objective (e.g. increased profitability) Business changes are very likely to meet with stakeholder resistance and must be effectively Click to edit managed header in order for the expected benefits to be realized. The benefits dependency map shows the entire chain right from the project output to the end benefit and shows the prerequisites for each benefit. The benefits dependency map is important because benefits and disbenefits do not typically happen in isolation. The IREB CPRE Foundation Level and Advanced Level syllabi describe the goal modeling technique, that can facilitate benefits identification.

10 2014 BA Convention 10 The Click project to edit Master business text styles case Business analysis should start with problem analysis (or opportunity analysis) and the expected benefits derived from those problems or opportunities. The dependencies between the benefits should then be established through a benefits dependency map. The benefits are then quantified and forecast (estimated). The outputs (deliverables) and the related changes and outcomes required for each of those benefits are then identified and added to the benefits dependency map. The Benefits Realization Plan (BRP) (of which, the benefits dependency map is an integral part) should be included in the Project Business Case. Such a business case is called a benefits-focused business case. If the business case is approved, the BRP is further elaborated and included in the Project Management Plan.

11 2014 BA Convention 11 Practices Click to edit for Master benefits text realization styles management Benefits realization should be managed in an integrated manner in an organization, right from the organizational portfolio of projects, down to each portfolio component, i.e. project or program. Business cases must be approved not simply based on the cost-benefit analysis, but also on the likelihood of benefits realization, assessed based on the BRP. Consistent practices for benefits forecasting should be mandated through the support of a Portfolio Management Office or a similar team. Project risk assessment should be focused on benefits-related risks. Business changes related to the project outputs should be managed through effective stakeholder engagement, right from the start of a project, rather than after delivery of the project outputs.

12 2014 BA Convention 12 Benefits Click to edit realization Master text management styles is a culture The culture of benefits realization management should percolate down from the Executive Management. Every project team member on every project in the organization should be aware of the benefits that their projects are expected to deliver. The Business Analyst plays a vital role in constantly reminding project stakeholders of the benefits to be delivered by the project, throughout the project lifecycle. Business analysis is the practice of enabling change in an enterprise by defining needs and recommending solutions that deliver value to stakeholders.

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