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The human factor
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High Performance Management: Using people to realize the benefits of technology
What Is Benefits Realization?
Benefits realization is a comprehensive project approach that focuses on identifying, measuring
and ensuring the business benefits achievable through technology. As mentioned above, business
cases and cost-benefit analyses are often developed by utility managers to gain initial budgetary
approval for IT expenditures. In contrast, benefits realization breaks down high-level benefits
into manageable chunks, measures benefits after implementation and utilizes tools to ensure that
the true benefits potential of projects are attained. Benefits realization is a comprehensive and
integrated approach that focuses on realizing business value, and it combines elements of a
cost-benefit analysis, performance metrics, organizational change management, and process
modeling. In short, benefits realization supplements the technical aspects of an implementation
with the business side of the equation to ensure that potential benefits come to fruition.
An effective benefits realization approach consists of a number of activities beginning at project
inception and continuing through implementation. These activities, which are illustrated in a
timeline relative to an IT rollout schedule in Figure 1, include the following:
- Development of business case, corporate metrics, and benchmark
One of the first activities to occur as part of an IT project is the financial justification of
the necessary technology investment. It is important to identify and quantify the potential
benefits of the project, and compare those to the projected costs associated with the
proposed information technology.
- Organizational Change Management (OCM) Cultural Assessment
Since most IT implementations involve large-scale change in terms of end users learning
new technologies and processes, it is imperative to assess the company’s culture early in
the project to identify cultural areas that will need to be addressed. Cultural obstacles can
significantly undermine the success of a project, and this area should be addressed early
in a project since implementing cultural changes are long-term in nature.
- Cultural Change
Based on the results of the cultural assessment, there may be areas that need
improvement to enable the large-scale changes required of the project. Given the
challenging nature of cultural change at utilities, it is recommended that managers focus
on the largest gaps rather than try to change each and every aspect of culture that needs to
be addressed.
- Communications
To ensure acceptance of the new technologies, it is important to effectively communicate
changes to end users. This should be done through a variety of channels and should be
targeted for each audience.
- Business Process Modeling
While this may seem intuitive to most, it is often not performed adequately or not
performed at all. In order to realize the full benefits of technologies, business processes
need to be modeled to improve efficiency and to make certain that technology is not
merely used to “pave the cowpaths.”
- Development of Operational and Departmental Metrics and Benchmarks
While most business cases effectively develop high-level projected business benefits for
an implementation, it is perhaps even more important to translate those metrics into
operational numbers that department and other middle managers can be held accountable
for. High-level benefits are useless if they are not presented in a way in which individual
managers can be measured. Therefore, the business case must be translated to target
levels of performance at the departmental level.
- Organizational Job Design and Planning
Just as processes need to be evaluated and changed to enable forthcoming technologies,
job descriptions, reporting relationships, and work accountabilities all need to be
evaluated and redesigned to support new technologies. Often new information technology
will require workloads to shift on to new work groups, and this type of change needs to
be identified early in the project.
- Detailed Process Design
Once the high-level process modeling is complete, which identifies who will do what
type of work at a high level and how that work will be completed, it is important to take
this process modeling to the next level and develop more detailed Level 4 to 6 process
models to ensure that individuals are able to clearly understand their roles,
responsibilities and individual processes pertaining to them. Many utilities effectively
model their high-level processes, but they more often than not fail to develop detailed
processes to identify and document how individuals will complete their work with the
new technologies. In addition, developing more detailed processes based on the
high-level processes ensures that use cases and other technical activities are closely
aligned with the intended business processes. Often, process modeling is performed
independently of key software development activities. This detailed process design
activity also helps direct training courses developed further downstream during the
technology rollout to end users.
- Individual Metrics, Processes, and Benchmarks
While operational and departmental metrics are useful to hold managers accountable for
contributing to the potential benefits of technology, they in turn must then be translated to
individual metrics so individuals understand how their performance contributes to the
success of the project. For example, as a Substation Designer, how does my day-to-day
work and performance add to the overall benefits identified in the business case?
- Organizational Job Design Implementation
Once the organization and related jobs have been designed, it is time to implement the
necessary changes. Simply documenting how jobs and structures will change as a result
of new technologies is not enough; those ideas must then be translated to reality to ensure
that the changes become a part of the new organization.
- End-User Training
Using the detailed process models developed above, it is important to then develop
end-user training that not only helps end users understand how to use the new
technologies, but also how to perform their new processes and job functions. Many
training programs underestimate the value of the latter.
- Reward Design and Implementation
Unfortunately, designing new processes, establishing metrics and targets to identify
potential benefit areas, and conducting traditional change management and end-user
training is not enough to ensure that people are motivated to make the project succeed.
Utilities must also incorporate reward systems to ensure alignment between individual
performance and project benefits achievement. Establishing new Key Performance
Indicators (KPI)s as part of an annual review process is an effective way of ensuring this
level of alignment.
- Benefits Measurement
Here is where the real value of benefits realization comes into play. As mentioned, most
utilities do not measure actual benefits after implementation, but a comprehensive
benefits realization approach does. It is imperative to compare actual results to projected
departmental and individual results to identify any potential benefits gaps. It also enables
utility managers to understand what they are doing well and ensure that they continue to
realize the benefits in these areas. Unfortunately, no matter how well managers have
incorporated the subsequent activities (discussed above) into their project plans, there are
almost always areas where full benefits are not achieved initially.
- Root Cause Analysis of Benefit Gaps
Based on the post-implementation measurement, it then becomes imperative to
understand why certain gaps exist. Root cause analysis, such as understanding why
people are not becoming more productive with the new technology, helps clarify the
reasons for the gaps. A common example of a root cause of less than 100 percent benefits realization is that end users understand how to use the technology but they don’t
understand the importance of doing so, so they often resort to workarounds and perform
their jobs as they did prior to the new information technology.
- Implementation of Corrective Action
Once the root cause of benefit gaps have been ascertained, it is then time to implement
activities to address the root cause analysis for the problem areas. In the example of not
having a thorough process understanding of how an end-user’s work contributes to
downstream activities, it may be appropriate to develop and conduct some follow-up
training to address these areas.
Figure 1: IT rollout activities
Many of these activities are included to some degree as part of overall project plans. Benefits
realization in and of itself does not offer any groundbreaking activities that have never been done
before. The challenging aspect, however, is ensuring that all of these activities are implemented
effectively and in alignment with the technical aspects of the project. This is where benefits
realization provides real value — by ensuring that all of the activities are completed in an
integrated fashion and that postimplementation activities measure and ensure benefits are
actually realized. The activities prior to implementation are intended to establish a foundation for
benefits realization potential, while post-implementation activities are intended to measure and
ensure that the benefits come to fruition.
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