From Outputs to Benefits
In defining benefits, a distinction is made between project outputs, outcomes and benefits. Outputs are the clear results, the products of the project: the new hotel, the renewed national park etc. Outcomes represent the new capability which is created by these outputs: extra hotel capacity in town, a National Park which can now receive new target groups of tourists.
Benefits are the measurable improvement made to the environment, for instance extra tourists bring extra income, which create extra jobs.
In the scheme below an example is provided for the Vesuvio project:
|Vesuvio Project||New tourist itineraries around the Vesuvio area||Capacity to attract more tourists who are interested in intangible heritage||Increased number of visitors to the municipalities around the Vesuvio park.|
Benefits in PM4SD
PM4SD projects usually deliver a wide variety of benefits (environmental, economical, and social). These benefits are often hard to measure. However it is strongly advised to translate benefits to measurable terms.
Some examples are given below of how benefits can be translated to measurable terms.
|Benefits||Measurement||Data for measurement|
|Increased Economical welfare in a tourism region||Unemployment rateNumber of jobs created, number of visitors per yearAverage budget spent per visitor||Economic statisticsNumber of registered unemployed residentsMarket research data about incoming tourists and their expenditure|
It has to be noted that the measurement of benefits cannot always be done based on available data. Sometimes new data needs to be obtained through new research. The improvement of the image of a business or area can often only be measured by doing interviews with members of the population.
Each project may have disbenefits as a result of the outputs. Disbenefits can be seen as negative side effects of a project. Traditionally many tourist projects resulted in major disbenefits such as a new tourist resort causes the loss of local cultural values and traditions of the region or the negative impact at nature reserves due to an overload of tourist visitors. PM4SD seeks to minimise these disbenefits. Therefore disbenefits should also be managed and measured during and after a project. The effect of disbenefits may grow during a project and lead to its cancellation.
Benefit Maps and Profiles
Projects have various outputs resulting in new outcomes resulting in various benefits. Some benefits lead to other benefits: more visitors to a tourist area lead to more income for the local shops which may lead to more jobs in the shops. We can qualify benefits as intermediate benefits and end benefits. You can recognise end benefits as they are directly linked to the strategic objective of the project (or the programme).
More employment in the region for instance is directly linked to the strategic objective to regenerate the local economy.
Benefit maps are particularly important because they show the link between the various benefits. Typically only end benefits are managed, measured and monitored.
In making a benefits map ideally write down the strategic objectives on the right side and then work from right to left filling in the benefits ultimately linking to the project outputs.
A benefit profile describes a benefit clearly, its interdependencies, its description and its value for the project. The purpose is to provide an overview of the benefit and a basis for the management and realisation of the benefit. Once the benefits map is created, the benefit profiles can be produced. Typically the benefit profile would describe the following elements:
- Description of the benefit
- What strategic objective does it support?
- Against values will the benefits be assessed and recorded?( for example: money, number of visitors, number of jobs, CO2 reduction etc)
- What is the current value of the benefit and what future value is anticipated?
- Outputs required for the benefit to be realised
- Dependency to other benefits
- Benefit owner (see Benefit responsibilities section)
- Which stakeholders this benefit will effect
- How the benefit will be measured
It is recommended that a benefit profile will be created for each end-benefit.
Benefits Realisation Plan
Just as a project needs to be planned using a project plan, the realisation of benefits should also be planned. Typically the length of the benefits realisation plan is longer than the project itself, as often benefits are realised long after the project has been closed.
The benefits realisation plan is not just an estimation of future values of benefits identified. It also schedules points at which benefits will be measured (benefits reviews) and when measurements will be reported. Therefore the Benefits realisation plan forms the basis of the planning of benefit reviews.
Benefits reviews may start during a project in the case where there are benefits identified which will be partly realised during the project. The benefits realisation plan may be integrated with the project plan during the project lifetime.
Typically a benefits realisation plan would incorporate the following elements:
|Benefits Realisation Plan|
|Schedule of when each benefit will be realised (and to what value)|
|A plan of benefit reviews during and after the project|
|Details on how, with whom and by whom, benefit reviews will be organised.|
Estimating future values of a benefit may prove to be difficult, especially in the PM4ESD environment. It is a known risk that benefits are overestimated initially in order to convince authorities of the funding need for a project. It is important that a benefit is measurable and the measure with a realistic target is described in the benefit profile. It is also vital that stakeholders agree on the way to measure the benefits.
The benefits map, the benefits profiles and the benefits realisation plan should be developed in parallel with the business case of the project. In this sense these documents provide inputs for the business case which should compare the value of benefits with costs to justify the project.
The activities related to benefits management start at the first step in the Projects Life Cycle and need attention throughout the project and beyond into the post-project period.
One of the causes for ineffective benefits management in practice is the lack of clear responsibilities in this respect. Assigning benefits management responsibilities can be challenging because this activity continues after the project.
In PM4SD projects, in particular, where projects are often financed by public funds. the project can be over-focused on the deliverable of the project. This is a logical result of the funds being released when the result is produced and not necessarily when the benefit is produced.
Another factor in PM4SD is that there are often many different stakeholders – tourists, residents, private companies, national government. Each of these stakeholders may have a different focus on the benefits of the project. Residents may be most interested in more local employment while the national government may be more interested in making a region more independent by having more economic sources (such as tourism).
While the project manager is responsible for delivery of the outputs of the project within the pre-set 6 variables (see chapter 3) someone needs to be assigned to look after each benefit to ensure it is realised: – the benefit owner. There can be one individual owning many or all benefits but in PM4SD it is more likely that there will be more than one benefit owner.
The Benefit owner looks after the measurements of the benefit and ideally is assigned during the Initiation of the project. Usually the benefit owner will come from the area where the benefit impacts most. If the benefit is an increase in the number of tourist visitors to a town it may be the Director of the Tourist office who typically has insights into the number of visitors to the town and would be best placed to own this benefit.
Benefit owners do not have to be part of the project team but do play a role which is increasingly important towards the end of the project.
Typical responsibilities of the benefit owner will be:
- Own the benefit profile
- Provide input for the benefits realisation plan
- Manage benefits measurements
- Organise benefit reviews
- Report on progress of benefits realisation