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2.1d Benefits Realization & Value Creation
Delivering a project on time and under budget is a failure if it doesn't create value. This section explores how to ensure project Outputs lead to organizational Benefits.
💎 The Value Chain
Understand clearly the difference between what you build and the value it creates:
| Stage | Definition | Example (Expense System) |
|---|---|---|
| Output | Tangible project deliverable. | Automated software deployed. |
| Outcome | Change in capability or behavior. | Employees stop using spreadsheets. |
| Benefit | Measurable strategic value. | $250k annual administrative savings. |
🔄 The Benefits Lifecycle
Benefits realization isn't a single event; it's a process that continues long after the project team disbands.
- Identification: Defining expected benefits in the Business Case.
- Planning: Creating a Benefits Realization Plan with metrics and owners.
- Execution: Building features that specifically enable the promised benefits.
- Transition: Handing over the system to a "Business Owner" who will realize the long-term value.
- Sustainment: Ensuring benefits don't erode over time (e.g., through ongoing training).
🚦 Who Owns Benefits?
- Project Manager: Owns the delivery of the Output.
- Business Owner / Sponsor: Owns the realization of the Benefit.
- Example: The PM builds the gym (Output), but the Sponsor is responsible for the users getting fit (Benefit).
📊 Measuring Success
Value can be financial or non-financial.
Financial Metrics
- ROI (Return on Investment): (Benefits - Costs) / Costs.
- NPV (Net Present Value): The value of future cash flows in today's dollars.
- Payback Period: How long it takes for the project to "pay for itself."
Non-Financial Metrics
- Customer Satisfaction (NPS).
- Employee Engagement.
- Risk Mitigation (e.g., preventing a security breach).
- Sustainability (ESG): Meeting environmental or social goals.
🤖 AI and Value Creation
In the 2026 exam, AI is often a tool for value creation.
- Output: An AI-powered anomaly detection model.
- Outcome: Fraudulent expenses are flagged automatically.
- Benefit: 15% reduction in financial leakage and improved audit compliance.
📝 Exam Insight: If a project is finished but the expected benefits haven't appeared after six months, the PM should recommend a Post-Implementation Review to identify adoption barriers (e.g., "employees weren't trained properly") rather than just declaring the project a success because the code was delivered.