Closing the benefits realisation gap

Executive partner in Gartner Executive Programs

At a recent Gartner Executive Programs Forum in Brisbane, several CIOs were discussing the challenge of demonstrating ongoing business benefits from IT-intensive projects with one of our analysts, Dave Aron. Somebody raised the question: “Who is responsible for ensuring benefits are defined and achieved?” The response was a quick “The business!” which spurred another question: “But isn’t IT part of the business?”

Historically, IT was given a budget to build new systems, but had little direct involvement or commitment for generating the returns on that investment. There can be no greater separation that puts both sides at odds with each other. It’s like delivering a ‘successful’ project, only to find out later that the solution was never used or implemented. A benefits realisation approach is designed to ensure this does not happen.

In a 2005 report called Show Me The Money: Advanced Practices in Benefits Realisation, Gartner defined benefits realisation as the discipline of ensuring that business initiatives deliver expected benefits. Benefits are real sources of value to the organisation, such as increased revenues, better customer retention, lower costs or quicker time-to-market.

The report noted that, historically, the IT organisation’s involvement in benefits realisation has not been consistent, resulting in disconnects, focus changes over time and benefits slipping through the gaps. Based on our conversations at the forum, it would appear that not much has changed in the five years since it was published.

A soon-to-be released update to the report suggests that benefits realisation should be a discipline in every organisation, and while it is certainly not the CIO’s responsibility alone, as a C-level leader running an organisation involved in almost every change, it is an important area for the CIO to influence as much as he or she can. Although excellence in benefits realisation cannot be achieved overnight, CIOs should continue to look for ways to improve their organisation’s capability in this area. Closing the benefits realisation gap requires sharing rather than shifting responsibilities for the investment, solution and benefits. So, what are some of the small steps you could take to improve your benefit realisation capabilities? Here are some to consider:

1. Extract benefits proposed in existing business cases into a register and review them routinely with identified benefit owners.

2. If they are unclear or undocumented, reverse engineer ‘value dependency maps’ that link the measures of success of IT-intensive projects with business performance indicators. Use these ‘maps’ to guide go or no-go decisions or to scope change decisions.

3. Ask: “Will the planned benefits be achieved?” at your project review meetings. Include the answer in your decision to continue, suspend or cease a project.

4. Review for residual benefits (enrol audit as part of the process) of projects completed in the past six to 12 months and report them in the benefits register. Continue this practice for projects in the current work pipeline.

5. Encourage a culture of focusing on benefits and value of projects. Stop naming IT-intensive projects by the technology or vendor supplying the solution (for example, ‘ERP implementation’). Instead, name it by the outcome or value to be derived from the solution (for example, ‘Single view of our customers’, ‘Better use of our assets’ or ‘Deploying people where needed most’).

Try them out and let me know if you begin to close the gap.

As an executive partner in Gartner Executive Programs, Poh-Ling Lee provides advice and guidance to CIOs and senior IT executives in Australia. She uses her 20-plus years’ experience in the IT industry in her role as a sounding board, coach and advisor. She can be reached at poh-ling.lee@gartner.com.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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