Delivering benefits from investment in change
Delivering benefits from investment in change - Beyond business as usual to value as usual
Today’s unrelentingly complex and turbulent business environment is driving an increased focus on value in all enterprises, large or small, private or public. In this context, the need to shift the focus of projects and programmes beyond activities and cost, to outcomes and value is being recognised as a priority by a growing number of enterprises - a recognition often triggered by project and programme management (PPM) professionals.
In the first 3 reports in this series, we discussed this shift, presented the need for enterprises to move beyond a culture of delivery to one of value, and discussed how such a culture could be implemented and sustained.
In the earlier reports, we introduced the concept of managing value throughout the full life-cycle of an investment decision, including both the initial investment, and the operation of the new or improved assets that result from that investment. However, the focus, as indeed most progress to date has been, was largely on new investments. There is certainly still much room for improvement here, but even if we succeed, this will not be enough. It is all too easy to assume that once the investment is “complete”, the benefits will be realised. In reality, benefits do not just happen, and they rarely happen according to plan . Further, most benefits are realised - or not, and costs incurred when an investment “ends” and the resulting assets are handed over to operations, to be managed in what is often called “business as usual”, or “keeping the lights on” (hereinafter referred to as “BAU”). In the case of information technology, for example, only 20-35% of the IT budget relates to new investment, the remaining 65-80% is BAU. In many sectors, acquisition costs for assets such as plant or equipment represent a small percentage of the total cost of ownership over the
lifetime of the asset.
- This report makes the case that we need to extend benefits management thinking and practices beyond investments to assets - to the on-going operational management of the assets resulting from those investments, and identifies five actions required to achieve this. Take an integrated view of value across investment and asset management
- Extend governance of value to encompass the full life-cycle of an investment decision
- Use the business case as a living, operational management tool to support the creation and sustainment of value
- Embed benefits management practices and competencies across the enterprise
- Take an incremental approach, delivering demonstrable improvement, and building the foundations for a value culture
The remainder of this report discusses these actions in more detail.