“Organizations face a variety of challenges when pursuing benefits. Categorizing these benefits not only helps to identify and group them but also guides organizations on how to effectively manage their realization”. (P.M.I, 2018).
The primary challenge that the organization face towards the realization of their objective is communicating to stakeholders which benefits to pursue.
Therefore, there is a need to classify each benefit and assign to a particular project to help the organization identify ways of tracking their attainment. One of the methods of improving communication and understanding of the organization is by developing an approved classification scheme for commonly accepted benefits.
Here The Categories of Benefits
- Tangible or Intangible benefits
Tangible benefits are the type of benefits that can be measured objectively based upon evidence. They can easily convert to monetary value. For example, the organization worth. The worth of the organization can be easily assigned a monetary value (measurable value) hence can easily be measured.
Intangible benefits are those that cannot be easily measured but rely on proxy measures for evaluation. A proxy measure is a measure that approximates or indirectly measures the benefit at hand. There are several ways of creating a measurable value to intangible benefits Example of intangible benefits include customer satisfaction or company reputation.
- Planned or emergent benefits
Planned or expected benefits are intended gains for a particular portfolio, program or project owner selected and approved throughout the entire BRM framework to help in the realization of the organization objectives. For example, the planned benefit may be to increase the company’s reputation by 10000 likes.
Emergent benefits are unexpected benefits that arise during or after a program, project or within the context of a portfolio. They are not planned for by the initial benefit owner and can have a significant impact on the scheduled benefit depending on whether it’s positive or negative. For example, while working on the planned benefit of increasing the number of customers then the organization image and goodwill improves due to the increased participation of the organization in community activities. This benefit is a positive emergent benefit to the organization.
- Direct and Indirect benefits
Direct benefits are unambiguous, and measurable gains realized as planned by definite benefit owners. For example, the organization may set up a program to provide water to the society. The direct benefit that the organization wants is to gain trust from the customers and the community at large.
Indirect benefits are secondary gains, planned or unplanned realized by the organization upon realization of a direct benefit. For example, from the direct benefit of corporate social responsibility to the society then the organization may benefit indirectly from improved organization goodwill to the organization.
Benefit categorization cube provides an array of benefits and visualizes how a benefit fits into more than one category.
A sample benefits categorization cube from BRM guide pg. 39
What are Key Importance of Categorizing Benefits to Individual Benefits?
An organization goal can be said to be achievable if it has a measurable value to determine whether it is realizable or not. The overall measurable value of a benefit depends on the measurable value of each benefit. Each benefit in the benefits realization (BRM) plan has a preliminary set of planned measurements, and a benefits measurement vary by the benefit type.
Therefore, there is a need to identify each benefit for each project to ease in the measurement to determine the level of achievement of the primary goal. Now let us explore some of the importance of recognizing individual benefits for each project:
1. Get to measure the benefits to pursue
The question that arises when pursuing benefits is the ability to measure the benefits to pursue. Identifying each benefit for each project answers this question because after identifying the benefit type then we can determine the measurement process to use to measure each benefit. If the benefit type is tangible, then it can be easily estimated as they have measurable value, but for intangible benefits then there are several ways of creating a measurable value to intangible benefits.
2. Knowledge of how Benefits align with the Strategic Plan
Benefits identification helps the organization understand how the benefits align with the strategic direction of the organization. When each project has been assigned a benefit to pursue, then the organization can visualize better if the project chosen to undertake to realize the benefit will help the organization towards the achievement of the primary goal. The organization can, therefore, determine if it will proceed with the project or not and this help to avoid wastage of resources and time.
3. Assess Project Progress Towards Planned Benefits
It easy to gauge the progress of a project towards planned benefits. When each benefit identifies to a project, then it can be easy to track the performance of the project towards the realization of the overall goal. Benefits are of different types: some are tangible while others are intangible and therefore it cannot be easily measured when in a group. Classifying each benefit eases measurement and hence help to determine if there is a need to make some changes to the project to align to the overall goal.
4. Weighting of Benefits to see where Priority should fit
Assigning each benefit to each project helps in prioritizing which benefits to pursue and identify which group could be affected by the benefit. A benefit can be measured depending on the type, and this helps to identify the impact of the project on the overall goal of the organization. The organization can, therefore, determine which projects to pursue depending on the effect of the project and can consider dropping some projects that have less impact. The organization can also identify the groups that can be affected by the project to help in restructuring.
5. Effective Communication to keep professionals engaged
Classifying benefits to individual projects leads to better communication and effective engagement of different stakeholders. Identifying each benefit for each project brings together different people with different skills to undertake the various projects as each project has a different benefit realization plan and this allows integration and effective coordination of the different activities in the organization and help in the realization of the organization goals.
P.M.I. (2018). Business Realisation Management:A practice guide. Newtown square,Pennsylvania: Project Management Institute.