No project will be initiated without some or the other benefit. Below are the most common types of project benefits within IT Projects. This is not an exhaustive list but has the most commonly recurring benefits. Sometimes the benefits can overlap with each other. In reality the benefits will be specific to a given project but will generally fall into one of the below categories.<
|Project Benefits Examples|
Some key points to remember when working with project benefits -
- In my opinion benefits tracking and realization is one of the most ignored areas of project management.
- When starting the project many people try to exaggerate the benefits to get the project approved.
- Once the project starts everyone is occupied with completing the project and the benefits are given low priority.
- Project Benefit Management is a key KPI in many organisations. Especially the top brass of the company are interested in what benefits a project gives to the organisation.
- The finance department is always keen on the project benefits because they need to know the ROI and when the project will be able to pay it self up.
- In many companies it is considered good if the project pays itself in 1 - 3 years. So, if a project cost is $100,000 and the estimated return is $25,000 then the project will pay itself in 4 years.
- Projects benefits are documented in the business case or project proposal document. In case of tangible benefits the project manager needs to make sure they have all the information required to explain how the hours / money saved was calculated.
- The senior management will focus a lot on dollar figures so you should not publish dollar savings unless you are absolutely sure.
- Many times business cases are rejected because they do not have enough benefit information.
- It is a good practice to have a benefit owner assigned to each benefit Owner. The owner of the benefit is then responsible to make sure the benefits are realised.
- It is also very important to make sure that you highlight the fact the benefits are estimations and may change. Often at early stages of the project there is not enough time available to do a detailed analysis so it very important to highlight all the assumptions you have made.
Project Benefits can be tangible which means the benefit can be measured or quantified. The tangible benefits are generally in dollars or time saved. The time saved can be converted to dollars by applying a hourly rate or daily rate. Click here to read How to Calculate Tangible Project Benefits.
- The most common type of benefit and a very broad category.
- Increased revenue is a benefit when a project has a direct impact on the revenue of the organisation.
- The additional revenue could be coming from a new product launch or by providing an offer that could attract an existing customers.
- When stating revenue as a benefit make sure you put a precise dollar value against the benefit. Also, add an additional information you have so that the person reading your case will get all the details they need.
- Examples are increased sales or increased subscription.
Resource Cost Savings
- When systems are automated this benefit is obvious as automation can save manual process time. This benefit can also realise when system issues are fixed.
- Often system changes are aimed at making processes efficient so it is very common that a manual task will not be required after the system changes are implemented.
- This benefit could mean that the organisation can make some roles redundant or relocate some roles to a different department.
- This one of the most sensitive benefits as it affects people and can cause an issue if not handled discreetly.
- In some cases systems which are old and need specialised skills will need expense manpower. If the project gets rid of the old system then the expensive resource will not be required.
- Examples are resource reduction, resource optimization, cross departments movement.
Hardware Cost Savings
- Some IT Projects replace the existing hardware with new hardware which can be less expensive.
- The project could also migrate data from server scattered across to one single server.
- The new hardware can require less maintenance which will result is cost savings.
- In some cases the hardware could be old and expensive. Getting rid of the hardware will save the company some many.
- Again it is important that you highlight the cost of the hardware is based on estimations which may differ from actual savings.
- In some cases there could be savings by moving your applications to a cloud based service which will reduce your hardware expenditure.
- Examples are decommissioning of old hardware, combining of servers.
Software Cost Savings
- Another one of the typical benefits in an IT Project.
- Many IT Projects are formed to get migrate old software which need high maintenance.
- The new software can save costs as it could be low maintenance.
- The project could replace two similar software to reduce the licenses costs.
- In some cases the project may replace the existing propreity software with an open source software.
- Examples are reduced license fees, reduced software support costs.
- Automating systems should lead to productivity gain which can allow people to do more work.
- Introducing system reduces manual tasks so the resources can be diverted to other areas.
- Sometimes system issues force the users to perform a manual workaround. Fixing the defects may reduce the manual steps and allow productivity gain as a benefit.
- Examples increased application processing or optimization of resource time.
- Projects can improve the time taken for a certain process to complete.
- This can be automating a simple manual data entry operation or automating a complex claims adjudication process.
- Improving processes means the time taken to complete a process is less which can save time which will free up the resource to do other tasks.
Intangible benefits cannot be quantified or measured. Examples of such benefits are customer satisfaction, enhanced use experience etc.
- Some of the projects can be formed due to a major audit finding.
- Generally, audit findings are related to either a process not working on no proper controls are in place.
Contribution to the organisational strategy
- All the projects should contribute to the organisation's strategy is some or the other way.
- Examples are Increased Market Position, Market Leader in Technology.
Enhanced User Experience
- Goal of many IT Projects is to build a sophisticated UI or Interface which can help system users to easily use the functionality the system provides.
- If the system is being developed for external users then this benefit could also mean enhanced customer experience.
- Examples are faster checkout times on websites.
Increased Customer Satisfaction
- Often IT Projects which are meant to build hardware or software for customers will have this benefit.
- The project will target to make the partnership between the customers and service providers better.
- The project could be aimed at providing additional functionality to the customer or an entirely new service.
- Part or some projects are aimed at addressing any systems or processed which will address compliance or audit issues.
- If an organisation breaches a regulation or compliance measure then the company could end up paying huge fines.
- Sometimes the benefit of the project could be increased security for the organisation.
- Automating a manual process like check posting could save time and reduce human errors.
- For example fixing a bug which allows private data to seen by by unwanted personal.
- Example is HIPAA Requirement or Privacy Regulation.
- Maintaining a brand name is one of key objectives for a lot of companies.
- Some projects aim at improving the brand equity by providing better services and maintain standards.
- Example is integration with all the major vendors.
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