The Power of Benefits Management in Op Model Design

Harnessing the Power of Benefits Management in Organisational Redesign and Operating Model Delivery

In an era of rapid technological advancement and increasing competition, organisations are finding it critical to remain agile, with the ability to adapt, and evolve. As such, organisational redesign and the delivery of new operating models have become key to ensuring the continued success, especially where tradition and lethargy have become barriers to change or improvement.

However, these transformational efforts require more than just the implementation of new structures or systems. They require careful planning and execution, and at the centre of this is benefits management.

Benefits Management — The Catalyst for Successful Organisational Transformation

Benefits management is the process of identifying, planning, measuring, and tracking benefits from the beginning to the end of a project or organisational change. In the context of organisational redesign and operating model delivery, benefits management plays a crucial role in helping to realise and maximise the value of these efforts.

Firstly, benefits management provides a framework to guide the design and execution of the transformation. It helps organisations articulate the expected benefits from the change, thereby providing a clear vision, priorities and direction for the redesign. This vision can then be used to design the new operating model that will deliver these benefits.

Secondly, benefits management is critical in managing and tracking the progress of the change. It enables organisations to measure the actual benefits realised against the expected benefits, allowing for adjustments and re-prioritisation to be made along the way. This ensures that the transformation stays on track and delivers the maximum value.

Finally, benefits management supports the successful delivery of the change. By keeping the focus on the benefits, it ensures that all decisions and actions are aligned with the objectives of the transformation. This helps to avoid scope creep and keeps the organisation focused on what is truly important.

Benefits Management in Action: A Public Sector Example

To illustrate the importance of benefits management, consider a large public sector organisation undertaking a major organisational redesign. The aim of this redesign might be to improve service delivery, reduce costs, and increase operational efficiency.

The set of benefits that might be adopted by the SRO might include:

• Enhanced Service Delivery: This could be measured in terms of customer satisfaction scores, reduction in service delivery times, or increase in the number of successful service outcomes.
• Cost Reduction: This could be quantified in terms of savings achieved through process streamlining, elimination of redundancies, or more efficient use of resources.
• Increased Operational Efficiency: This might be assessed through metrics such as process cycle times, staff productivity measures, or reduction in error rates.

As the redesign progresses, these benefits would be continually measured and tracked, allowing the organisation to see if the change is delivering the expected value. If certain benefits are not being realised as expected, the organisation can then take corrective action, such as adjusting its operating model or implementing additional changes.

What Makes a Good Benefit (Statement)

A good benefit statement is an integral part of benefits management as it succinctly expresses the value or advantage to be gained from a specific project or change initiative. Well-crafted benefit statement should include:

1. Specific: The statement should clearly define the benefit in specific terms, avoiding vague or generic descriptions. This might involve quantifying the benefit or describing exactly how it will impact the organisation.
2. Measurable: The benefit should be quantifiable or at least have some indicator that can be tracked. This could be in terms of financial value, time saved, efficiency increase, or other quantifiable measures.
3. Achievable: The benefit should be realistic and achievable within the context of the project or change initiative. It should take into account the resources available and the constraints of the organisation.
4. Relevant: The benefit should align with the strategic objectives of the organisation. It should contribute to achieving the organisation’s goals or resolving its challenges.
5. Time-bound: The benefit should have a defined timeframe for when it will be realised. This could be at the end of the project or at some point during the lifecycle of the project.
6. Directly Linked to the Change: The benefit should be a direct outcome of the change being implemented. It’s essential to establish this cause-effect relationship to ensure the benefit can be directly influenced by the project activities.
7. Owner Identified: A benefit statement should clearly identify who is responsible for realising the benefit. This person or group will be in charge of taking the necessary actions and measures to ensure the benefit is achieved.

For measurable benefits, the current (baseline) state and the future (target) state should be clearly defined. This helps to measure the progress and achievement of the benefit.

An example of a good benefit statement could be: “By implementing the new customer service system by the end of Q2 2023, we expect to see a 20% reduction in customer complaints and a 15% increase in customer satisfaction scores, as measured by our quarterly customer survey, contributing to our strategic goal of enhancing customer experience.”

How to Manage Benefits Realisation

The process steps for benefits management and realisation in the context of an organisational redesign and operating model delivery are outlined below. As with all scenarios, the framework and process will often be tailored to meet the specific circumstances, maturity and available supporting functions, but this simple outline provides a good guide.

1. Identify Benefits

The first step involves identifying the potential benefits that the organisational change is expected to deliver. In the case of our public sector organisation, these benefits might include enhanced service delivery, cost reduction, and increased operational efficiency. It’s crucial to clearly articulate these benefits and align them with the overall strategic goals of the organisation.

2. Define Benefits

Once the benefits have been identified, they need to be clearly defined and quantified. This could involve establishing measurable key performance indicators (KPIs) for each benefit. For instance, enhanced service delivery could be measured in terms of customer satisfaction scores, reduction in service delivery times, or increase in the number of successful service outcomes.

3. Develop Benefits Realisation Plan

This involves outlining how each benefit will be realised and who will be responsible for realising it. This plan should detail the actions needed to achieve the benefits, timelines, and resources required. It should also identify the risks and potential barriers to realising the benefits and outline mitigation strategies.

4. Implement Change

This step involves carrying out the organisational redesign and implementing the new operating model according to the benefits realisation plan. It’s essential to keep the focus on benefits during this stage to ensure that all decisions and actions align with the benefit objectives.

5. Track and Measure Benefits

As the change is being implemented, it’s important to continually track and measure the actual benefits against the expected benefits. This can help identify any gaps or issues early on, allowing for corrective action to be taken if necessary.

6. Review and Adjust

This involves reviewing the progress of the change and the realisation of benefits and making any necessary adjustments. If certain benefits are not being realised as expected, this may indicate that the operating model needs to be adjusted or that additional changes are required.

7. Realise and Evaluate Benefits

Once the organisational change has been implemented, the focus shifts to realising the benefits. This involves continually tracking and measuring the benefits and evaluating the success of the change. It’s crucial to remember that some benefits may take time to realise, particularly in the case of significant organisational changes.

8. Sustain and Improve

The final step in the benefits management process is to sustain the benefits over the long term. This involves embedding the changes into the organisation’s culture and processes, continually monitoring the benefits, and seeking opportunities for further improvement.

Benefits management is a continuous process that extends beyond the life of the change project. It provides a structured approach to ensure that the new operating model delivers the expected value and help the organisation achieve its strategic goals.

The Benefits Balanced Scorecard

The Balanced Scorecard (BSC) is a strategic performance measurement tool that helps organisations align their day-to-day operations with their strategic goals. It was initially proposed by Robert Kaplan and David Norton in the early 1990s. The Benefits Balanced Scorecard is an adaptation of this concept, focusing specifically on the benefits that an organisation aims to achieve from a project, program, or organisational change.

The Benefits Balanced Scorecard provides a framework for defining, measuring, and tracking the benefits throughout the life of the change. The attributes or dimensions being tracked will depend on the organisation and the goals, but typically for a organisation the benefits might cover four key areas or perspectives, each with its associated metrics, targets, and initiatives:

• Financial Benefits: This perspective focuses on the financial impact of the change, such as cost savings or revenue increases.
• Customer Benefits: This perspective looks at the benefits that will be realised by the organisation’s customers, such as improved service delivery or customer satisfaction.
• Internal Process Benefits: This perspective focuses on improvements to the organisation’s internal processes, such as increased efficiency or reduced error rates.
• Learning and Growth Benefits: This perspective considers the benefits in terms of the organisation’s capacity to learn and improve, such as employee skill development or cultural change.

Creating a Benefits Balanced Scorecard involves the following steps:

• Identify the benefits: Start by identifying the benefits that the change is expected to deliver, aligning them with the four perspectives.
• Define the metrics: For each benefit, define a metric that can be used to measure the benefit.
• Set targets: Set a target for each metric, defining what success looks like.
• Identify initiatives: For each benefit, identify the initiatives or actions that need to be taken to realise the benefit.

Using a Benefits Balanced Scorecard offers several advantages. It provides a clear and balanced view of the benefits, considering all perspectives appropriate for the programme. and the SRO. It also helps align the change with the organisation’s strategic objectives and provides a tool for tracking and measuring the benefits.

In the context of directing the design and delivery of an operating model or organisational design change programme, the Benefits Balanced Scorecard helps ensure that the change is driven by the benefits to be achieved. It provides a roadmap for the change, guiding decisions and actions throughout the process.

Here is an example of a Benefits Balanced Scorecard for the public sector organisation mentioned earlier:

By focusing on these key areas, the organisation can ensure that the benefits are fully realised and that the change delivers the maximum value.

The Benefits Dashboard

The benefits dashboard is a visual display of the most important information needed to achieve one or more objectives, consolidated and arranged on a single screen so the information can be monitored at a glance. In the context of benefits management, a benefits dashboard is used to track and communicate the status of the benefits that an organisation expects to realise from a project, program, or organisational change.

The benefits dashboard typically includes key information such as the benefit description, the target, the current status, the trend, and any issues or risks. It provides a clear and concise view of the benefits, allowing stakeholders to quickly understand the progress being made towards realising the benefits.

A benefits dashboard can be a powerful communication tool with programme stakeholders. It helps keep them informed about the status of the benefits, highlighting any issues or risks that need their attention. It also provides a basis for discussion and decision-making, helping to ensure that the change stays on track and delivers the expected value.

Here is an example of a simple table-based benefits dashboard for the public sector organisation mentioned earlier:

In this dashboard:

• Benefit: This is the benefit that the organisation aims to achieve.
• Target: This is the target that has been set for the benefit.
• Current Status: This shows the current status of the benefit.
• Trend: This indicates whether the status is improving (up), deteriorating (down), or stable.
• Issues/Risks: This highlights any issues or risks that might affect the realisation of the benefit.

The benefits dashboard provides a snapshot of the benefits at a given point in time, offering a quick and easy way for senior stakeholders to monitor the progress of the change and the realisation of the benefits. By keeping stakeholders informed and engaged, the benefits dashboard plays a crucial role in the successful delivery of the change.

Conclusion

The need for organisational redesign and new operating model delivery is increasingly becoming a reality for many organisations. However, to ensure the success of these transformational efforts, it is vital to have a robust benefits management process in place. By identifying, planning for, and managing benefits, organisations can stay focused on their goals, track their progress, and ultimately realise the maximum value from their change efforts. Indeed, benefits management is not just a nice-to-have, but a necessity for successful organisational transformation.

References

Here is a list of useful references related to benefits management and realisation, organisational redesign and operating model delivery, Benefits Balanced Scorecard, and Benefits Dashboard

• Kaplan, R. S., & Norton, D. P. (1992). The Balanced Scorecard — Measures that Drive Performance. Harvard Business Review. Link
• Office of Government Commerce (OGC). (2007). Managing Successful Programmes. The Stationery Office. Link
• Ward, J. and Daniel, E. (2006). Benefits Management: Delivering Value from IS & IT Investments. John Wiley & Sons.
• Bradley, G. (2010). Benefit Realisation Management: A practical guide to achieving benefits through change. Gower Publishing.
• Project Management Institute. (2013). The Standard for Program Management. Project Management Institute. Link
• Project Management Institute. (2017). Benefits Realization Management Framework. Project Management Institute. Link

These references can provide further insights and details about the topics discussed in this thread. Remember to check the availability and access conditions of each resource.

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