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Benefits Management: How to Increase the Business Value of Your IT Projects, 2nd Edition




Benefits Management: How to Increase the Business Value of Your IT Projects, 2nd Edition

John Ward, Elizabeth Daniel

ISBN: 978-1-119-99326-1 August 2012 362 Pages



The second edition of Benefits Management has been updated with current examples, further insights from experience and recent research. It shows how the enduring challenges achieving business value from information systems and technology projects can be addressed successfully. The approach, which is synthesized from best practices, sound theories and proven techniques from a range of management disciplines, is exemplified from the authors' extensive experience of working with a wide range of organizations. The book includes examples from a wide variety of projects including non-IT projects. The book is written in an accessible style, ideal for practicing managers, and includes check lists and templates for using the processes, tools and techniques and real-life case studies of their application and impacts.

The book now also includes:

  • International survey results that reinforce the importance of the topic, the key management issues and evidence of how the more successful organizations' practices are closely aligned with those described in the book.
  • A Benefits Management Maturity diagnostic which enables organizations to understand the reasons for their current investment success levels and then how to increase them.
  • Discussion of the role and contribution Project Management Offices (PMOs): how they can improve the delivery of value IT projects.
  • Further practical advice and guidance on Program and Portfolio Management, including findings from the authors’ recent research in several large organizations.

About the authors xi

Preface xiii

1 The challenges of IS/IT projects 1

Dissatisfaction with current approaches to benefits delivery 4

The need for a fresh approach: benefits management 8

Benefits delivery 9

A focus on value 10

A business case linked to organizational strategy 11

The importance of change management 12

Commitment from business managers 13

IS/IT sufficient to do the job 13

Involvement of stakeholders 14

Educated in the use of technology 15

Post-implementation benefits review 16

The importance of a common language 17

Summary 19

2 Understanding the strategic context 21

The external and internal perspectives of business strategy: the competitive forces and resource-based views 22

Resources, competences and capabilities 23

Ends, ways and means 26

PEST analysis 28

Industry attractiveness and competitive forces analysis 28

External value chain analysis 34

Internal value chain analysis 37

Alternative internal value chain configurations 40

Balancing the external and internal contexts: the dimensions of competence 44

Linking business, IS and IT strategies 47

Managing the portfolio of IS/IT investments 49

Organizational information competences 56

Summary 59

3 The foundations of benefits management 61

The gaps in existing methods and the implications 62

The origins of the benefits management approach and process 67

An overview of the benefits management process 68

Step 1: Identifying and structuring the benefits 69

Step 2: Planning benefits realization 73

Step 3: Executing the benefits plan 75

Step 4: Reviewing and evaluating the results 78

Step 5: Establishing the potential for further benefits 79

What is different about this approach? 80

Summary 83

4 Establishing the why, what and how 85

Why: identifying business and organizational drivers 86

Establishing investment objectives 91

Linking the investment objectives to the drivers 93

What: the business benefits 94

How: the benefi ts dependency network 95

Measurement and ownership 103

Benefi t and change templates 111

Worked example: improved control within a food processing organization 111

Summary 121

5 Building the business case 127

Arguing the value of the project 129

Maintaining dependency: benefits are the result of changes 132

A structure for analysing and describing the benefits 133

Quantifying the benefits: the major challenge 136

Ways of overcoming the quantification problem 137

Financial benefits 144

Cost reductions 147

Revenue increases 148

Project cost assessment 150

Investment appraisal techniques 150

Variations in benefi ts and changes across the investment portfolio 152

Risk assessment 156

Completing the business case 161

Summary business case for the FoodCo project 163

Summary 166

6 Stakeholder and change management 169

Assessing the feasibility of achieving the benefit 170

Stakeholder analysis and management techniques 173

From analysis to action 178

Completing the benefits plan 182

Approaches to managing change 184

Matching the management approach and stakeholder behaviours 185

The nature of IT-enabled change management: is it different? 186

Alternative change management strategies 193

Summary 197

7 Implementing a benefi ts management approach 199

Rationales for introducing benefits management 200

Initiating and managing a benefits-driven project 204

The project sponsor 206

The business project manager 207

The role of project management offi ces (PMOs) 209

The first workshop 211

Activities between workshops 212

The second workshop 212

Inclusion of the benefi ts plan in the management of the project 217

Monitoring the benefits after implementation 223

Fit with other methodologies 224

Organizational benefits management maturity 225

Summary 234

8 The importance of context 235

Factors to take into account 236

The public sector 237

Small and medium-sized businesses (SMEs) 241

Multi-unit businesses: replicated deployments 242

Variations across the applications portfolio 245

Problem-based: key operational and support investments 247

Innovation-based: strategic and high potential

investments 248

Different application types 252

E-commerce and e-business 252

Information management (IM) 253

Customer relationship management (CRM) systems 256

Enterprise resource planning (ERP) systems 259

Infrastructure investments 263

Non-IT projects 266

Different IS/IT supply arrangements 267

Summary 271

9 From projects to programmes to portfolios 273

Defining programmes 274

Planned and emergent programmes 276

Programme dependency networks 276

The management of programme benefits 282

Managing the IS/IT project investment portfolio 284

Governance and portfolio management 285

Setting priorities 287

Links to drivers 290

Benefits management lite 293

Project portfolio management in practice 295

Summary 295

10 Creating a better future 299

The continuing challenge of IS/IT projects 300

Characteristics of the benefits management approach 300

The value of the process 301

Using benefits management to formulate and implement strategy 303

Incorporating benefits management into strategic thinking 308

Examples of benefits-driven strategies 311

Future trends in IS/IT and their implications for benefits management 312

A final word or two 323

Glossary 325

References 329

Index 337