Benefits For Whom? - 26th Nov 2015

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Posted by APM on 7th Dec 2015

On the 26th November 2015, the South Wales and West of England (SWWE) and Thames Valley Branches held a joint event in Swindon which was kindly hosted by the Nationwide Building Society.

Our speaker tonight, Benedict Pinches is Managing Director of Oxford Major Programmes and Secretary of Thames Valley Branch. His aim tonight was to discuss findings from research into benefits realisation for the Department of Health. The work was focused on a literature review to look for answers to a number of key questions presented by the DoH into the benefits of investment into ICT health projects. Ben had led the major programmes work stream which identified and analysed 65 relevant academics papers. The work was independently audited by a panel of external academics. Other work that he drew on included a workshop arranged by the Major Projects Association to ascertain current good practice in benefits realisation in UK major projects, including knowledge transfer between industry sectors, the relationship between good sponsorship and benefits and how stakeholders be aligned around benefits.

Ben started with an introduction into benefits, which can be ‘hard’ quantitative often financial  based, non financial qualitative, such as customer satisfaction, and ‘soft’ qualitative measures such as patient dignity, well being, all of which are very hard to measure.  The OGC definition of a benefit is a measure of an outcome or part of an outcome, the advantage accruing from that outcome which contributes to the strategic objectives. It answers the question of what the project is for.

Ben described 4 main benefit categories: economic, social, environmental and learning, and how each are also linked to motivational factors as to why people want to be involved with a project. Benefits can be measured using a number of techniques, including transaction costs, Net Present Value (NPV), cost benefit analysis, portfolio analysis and value assessment. Ben described each and their uses. Benefits should be measured as a chain at various points across the project life cycle including the delivery of outputs, and end benefits and their contribution towards delivering strategic objectives.

One of the key questions to establish is who do we measure benefits for. Each stakeholder is looking for different information. Ben grouped stakeholders into Buyers, Builders, Users and the PM Team. Buyers include the government, regulators and audit. Builders include designers, architects, and technicians. Users include the general public and operators.

Ben then asked delegates to workshop what benefits the stakeholder groups would expect from building a railway bridge between two communities. After 10 minutes lively discussion, each table was asked to feed back their thoughts, which identified the benefits and dis-benefits seen by each stakeholder group.  The exercise identified what stakeholders were concerned about and therefore what needs to be measured and reported by the project team.  Ben highlighted the dangers of biases in determining people’s likes and dislikes based on their beliefs about the world, and that even experts can get it wrong in identifying what is actually important to stakeholders.

UK is seen as a world leader in major project benefits realisation, but even we can miss some wider benefits and not capture or record them. Cross rail is a good example of a major project on time and cost, but there have been unanticipated benefits, including the impact on house prices on the routes which was greatly underestimated. There can also be significant dis-benefits to major projects, such as the very high casualty rates in the Qatar stadium construction project.

Ben highlighted the difficulties in comparing projects, as each will be very different, and over time the emphasis has changed from more functional benefits in the 1980s to societal benefits today.

Ben summarised the academic findings from the literature review. It was disappointing that few of the papers defined what a benefit was and there was no construct clarity. There was insufficient empirical depth across the papers, with inconclusive evidence and a lack of rigour derived from using case studies and normative models. However over the last 10 years, the number of papers on the subject of benefits realisation has increased. There appeared to be a danger of two camps forming: those who believe that “the benefits are out there”, and those that believe they are not out there and are simply what stakeholders think they are.

Ben finally turned to the importance of vision in prioritising benefits. He used the example of the Olympic rowing team who assessed any proposed innovation against the question: “does it make the boat go faster?”  if not, drop it.  Leaders are dealers in hope: they set the vision, or benefits, against which projects are measured before the project is started.  A good example is Tim Smit who sold his vision / benefits for the Eden Project to potential investors to raise the finance for the iconic project.

A lively Q&A session finished the evening off, where it was noted that benefits can be correlated with stakeholder views of project success and that benefits identify what project teams need to measure and report against.

 

Martin Gosden
SWWE Branch Chairman

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