Guide for Effective Benefits Management in Major Projects

1 Guide for Effective Benefits Management in Major Projects Key Benefits Management principles and activities for Major Projects October 2017 Guide for Effective Benefits Management Guide for Effective Benefits Management Guide for Effective Benefits Management in Major Projects Key Benefits Management principles and activities for Major Projects October 2017 This information is also available on the Infrastructure and Projects Authority website: Guide for Effective Benefits Management Crown copyright 2017 Produced by Infrastructure and Projects Authority You may re-use this information (excluding logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit or email: Where we have identified any third party copyright material you will need to obtain permission from the copyright holders concerned.

2 Alternative format versions of this report are available on request from the Infrastructure and Projects Authority. Contents 1. 2. 3. What is Benefits Management ?..p12 4. Key Benefits Management 5. Benefits Management 6. Benefits Management 7. Benefits cycle practices .. p19 8. Roles and p44 9. Benefits Management p47 10. Portfolio Benefits p49 11. p50 12. p50 12. Annex A Glossary of commonly use Benefits Management p51 13. Annex B Benefits Management cycle p57 14. Annex C Example Guide for Effective Benefits Management 6 Guide for Effective Benefits Management 7 1. Introduction The vast majority of Government policies are delivered through Projects and programmes of various forms. It is therefore vital that we deliver Projects successfully in order to realise their intended Benefits for citizens.

3 As the centre of expertise for infrastructure and Major Projects and the home of the project delivery function across Government, the IPA s purpose is to continuously improve the way Projects are delivered. To do this, we first need to be able to measure performance, including the expected Benefits of Major Projects , so we can learn important lessons and make continuous improvements to the system over time. The majority of Government Projects are complex to deliver. The IPA works with departments and industry to help improve the way individual Projects are being delivered, and this includes ensuring that the forecast Benefits of each project are protected and citizens receive the promised improvements. Another vital component is ensuring Projects are initiated in the right way. Evidence shows that the best way to ensure successful delivery is by setting up Projects correctly in the first place.

4 The most common causes of failure are well rehearsed: lack of clear objectives, insufficient resources, and over-ambitious cost and schedule, among others. All these mistakes impact on the level and amount of benefit that can be realised, and can be avoided if tackled in a project s early stages. Benefits Management goes to the heart of delivering Projects successfully. If appropriate time is dedicated to Benefits early on then clear objectives are shaped and there is an agreed understanding of stakeholder wants and needs. Issues that we know are crucial to the success of Projects , such as accounting for optimism bias during the early stages of development for example, can be tackled best by focusing on rigorous Benefits Management from the start. One of the IPA s priorities is to measure and improve performance of Projects over time, in order to help them realize Benefits for society, provide value for money and enable lessons learned to be shared.

5 Effective Benefits Management is essential to this and the IPA will increase its focus on Benefits Management , and in particular Benefits analysis, to better understand key challenges and promote good practice from past Projects and apply them to current and new Projects . However, we can only do that if Projects themselves improve how they understand and measure their own Benefits . This Guide has been written to help project teams develop their Benefits Management capability and ensure Benefits activities mature at the same pace as other areas of project delivery. This document promotes a Benefits led approach to project delivery which should ensure decision making, planning and risk considers the impact on Benefits realisation throughout the project lifecycle. Guide for Effective Benefits Management 8 Endorsement of the Guidelines As one of the newest Chartered bodies in the UK, APM - the Association for Project Management - is delighted to be able to endorse this guidance which will be another step in raising professionalism on project Management across the government.

6 We stand shoulder to shoulder with the IPA in the belief that the increased profile of the project Management profession will be enhanced by the Benefits created through the increasingly successful delivery of project and programmes in government. Whilst great strides have been made, there always more that can be done, hence the value of this guidance. Like the IPA we believe in the importance of measuring performance, including the expected Benefits of Major Projects , so we can learn the important lessons and continue to make continuous improvements over time. Effective Benefits Management is essential to: measure performance deliver the widest possible Benefits to society (and not just financial ones) provide value for money to the public, and finally, create a virtuous circle of lessons learned and shared. We are pleased to be able to support this guidance as another important step towards these shared goals and look forward to the Benefits of reading and sharing this guidance being realised!

7 Sarah Drake CEO, APM The guidance is invaluable for anyone needing to know how to apply Benefits Management to a government policy or Major project. It is particular helpful in explaining how Benefits Management requirements fit with concepts that will be more familiar to government professionals such as appraisal, evaluation and business case development. I would encourage everyone to apply this guidance as early as possible in the development of your policy or project as we have sought to do on the HS2 programme. Bridget Jackson, Head of Benefits Management , HS2 Ltd Guide for Effective Benefits Management 9 2. Overview This Guide for Effective Benefits Management in Major Projects aims to provide structure and set expectations for Major project teams when undertaking Benefits Management . These guidelines are primarily aimed at Senior Responsible Owners (SROs), Programme and Project Directors, Benefits Managers and Business Change Managers working on Major Projects .

8 They are also relevant for Benefits Owners who are responsible for the realisation of Benefits from Major Projects that have been assigned to them. Benefits Leads and Portfolio Directors, Managers and Offices within Departments looking to strengthen their Benefits Management approach will also find this document useful. The scope of this Guide covers: key activities to be undertaken for Effective Benefits Management ; principles and good practice to adopt to ensure Benefits are managed and realised; how Benefits Management fits within IPA s assurance process; how Benefits Management fits within the Green Book Business Case process; a suggested RACI (responsible, accountable, consulted and informed) matrix for the key roles involved in Benefits Management a glossary of terms; suggested Benefits Management cycle and practices. These Guide is not prescriptive, but provide key principles and practices to consider during each stage of the project lifecycle for Benefits Management .

9 The aim is to promote a proactive Benefits Management culture and a consistent approach across Government for Benefits Management activities in Major Projects . These Guide aligns with: the Government s functional standard: Project Delivery portfolio, programme and project Management ; the key assurance questions outlined in the Assurance of Benefits Realisation in Major Projects As such this document does not go into detail on assurance review expectations, but instead outlines the key activities required in each stage that would evidence the areas to probe outlined in the document above. 1 Guide for Effective Benefits Management 10 This document contains good practice and universal principles that can be applied at project, programme and portfolio level, regardless of the delivery approach taken, whether waterfall, agile or other specialist The Guide concentrates on Projects and uses the project lifecycle to provide guidance on the Benefits Management practices within the context of a project.

10 However, the Benefits Management practices can be applied to a programme as whole, to a tranche within a programme and to a discrete project within a programme. To understand alignment of the Benefits Management practices with the programme lifecycle and how to use this sections within this Guide from a programme perspective please see Figure 1. Figure 1: Benefits cycle practices alignment with programme lifecycle (programme lifecycle taken from Government Functional Standard) Each practice in the Benefits Management cycle section of this document includes detailed advice on key activities and considerations. A brief summary is also provided at the end of each lifecycle stage for those requiring a quick reference Guide . 2 Traditionally, project Management thinking has been that Projects deliver outputs/products while programmes combine the outputs delivered by these Projects to deliver a desired outcome in business as usual.