Our thoughts, views, and experiences
I have noticed a shift in how the benefits of a change initiative are being discussed. The conversation is moving from 'what' they are to 'how' they will be achieved.
A business case demonstrates how the anticipated benefits of a change justify the investment required to implement it. Benefits can be either gains (increased sales) or the avoidance of losses (retention of talent). These are compared to investment costs include time, money and people resources (capabilities).
Since funding approval is based on the business case, there is a bias to maximize the benefits and minimize the costs. The pressure to do so is highest when multiple projects are competing for limited resources; the better the business case, the more likely a project will get approved.
I remember supporting a sales function reorganization that was competing for investment. One of the benefits cited was a six percent increase in sales created by transferring regional key account teams to the head office. Looking back, it doesn't make sense that an internally-focused change would realize a large, market-driven benefit.
It's not surprising that research firms have documented poor benefit realization. The Project Management Institute (PMI) reported that 20 percent of surveyed organizations had a high level of benefit realization maturity. Also, McKinsey noted that 56 percent of large IT projects delivered less value than predicted.
It is exciting to see change investment discussions focusing more on how benefits will be measured and reported. It extends the project timeline well beyond the change and raises the bar on delivery. It also requires internal and external service providers to demonstrate how benefits will be realized.
Some progressive external service providers are bundling post-change support into their offer. Capital finance advisory firms are adding post-merger acquisition (PMI) support to their private equity mergers and acquisitions services and technology firms are doing the same with their installations. Delivery support is now a competitive differentiator.
Here are some tips to ensure that your changes deliver on their business cases:
The business case is an important element of change success. Balancing the 'what' and the 'how' increases the role it plays in strategy and implementation; it better defines the path that an organization must take to fully reap the benefits it needs to be successful. It also increases confidence they will be realized.