Benefits Management – How to Increase the Business Value of your IT Projects 2e

John Ward is Emeritus Professor at Cranfield University, School of Management. He was previously Professor of Strategic Information Systems and Director of the Information Systems Research Centre. Prior to joining Cranfield, he worked in industry for 15 years and continues to be a consultant to a number of major organizations. As well as publishing many papers and articles, he is co-author of the book Strategic Planning for Information Systems. He is a Fellow of the Chartered Institute of Management Accountants and has served two terms as President of the UK Academy for Information Systems. Elizabeth Daniel is Professor of Information Management and Associate Dean of Research and Scholarship at the Open University Business School (OUBS). Prior to joining OUBS in 2005, she worked in the IS Research Centre at Cranfield School of Management. Elizabeth s research has addressed a number of areas including benefits management and IS in marketing and supply chains. Recent work has included studies of home-based online businesses and the uses of consumer and employee data. She has published many papers in leading academic journals and a number of management reports.

About the authors xi Preface xiii 1 The challenges of IS/IT projects 1 Dissatisfaction with current approaches to benefits delivery 4 The need for a fresh approach: benefits management 8 Benefits delivery 9 A focus on value 10 A business case linked to organizational strategy 11 The importance of change management 12 Commitment from business managers 13 IS/IT sufficient to do the job 13 Involvement of stakeholders 14 Educated in the use of technology 15 Post-implementation benefits review 16 The importance of a common language 17 Summary 19 2 Understanding the strategic context 21 The external and internal perspectives of business strategy: the competitive forces and resource-based views 22 Resources, competences and capabilities 23 Ends, ways and means 26 PEST analysis 28 Industry attractiveness and competitive forces analysis 28 External value chain analysis 34 Internal value chain analysis 37 Alternative internal value chain configurations 40 Balancing the external and internal contexts: the dimensions of competence 44 Linking business, IS and IT strategies 47 Managing the portfolio of IS/IT investments 49 Organizational information competences 56 Summary 59 3 The foundations of benefits management 61 The gaps in existing methods and the implications 62 The origins of the benefits management approach and process 67 An overview of the benefits management process 68 Step 1: Identifying and structuring the benefits 69 Step 2: Planning benefits realization 73 Step 3: Executing the benefits plan 75 Step 4: Reviewing and evaluating the results 78 Step 5: Establishing the potential for further benefits 79 What is different about this approach? 80 Summary 83 4 Establishing the why, what and how 85 Why: identifying business and organizational drivers 86 Establishing investment objectives 91 Linking the investment objectives to the drivers 93 What: the business benefits 94 How: the benefi ts dependency network 95 Measurement and ownership 103 Benefi t and change templates 111 Worked example: improved control within a food processing organization 111 Summary 121 5 Building the business case 127 Arguing the value of the project 129 Maintaining dependency: benefits are the result of changes 132 A structure for analysing and describing the benefits 133 Quantifying the benefits: the major challenge 136 Ways of overcoming the quantification problem 137 Financial benefits 144 Cost reductions 147 Revenue increases 148 Project cost assessment 150 Investment appraisal techniques 150 Variations in benefi ts and changes across the investment portfolio 152 Risk assessment 156 Completing the business case 161 Summary business case for the FoodCo project 163 Summary 166 6 Stakeholder and change management 169 Assessing the feasibility of achieving the benefit 170 Stakeholder analysis and management techniques 173 From analysis to action 178 Completing the benefits plan 182 Approaches to managing change 184 Matching the management approach and stakeholder behaviours 185 The nature of IT-enabled change management: is it different? 186 Alternative change management strategies 193 Summary 197 7 Implementing a benefi ts management approach 199 Rationales for introducing benefits management 200 Initiating and managing a benefits-driven project 204 The project sponsor 206 The business project manager 207 The role of project management offi ces (PMOs) 209 The first workshop 211 Activities between workshops 212 The second workshop 212 Inclusion of the benefi ts plan in the management of the project 217 Monitoring the benefits after implementation 223 Fit with other methodologies 224 Organizational benefits management maturity 225 Summary 234 8 The importance of context 235 Factors to take into account 236 The public sector 237 Small and medium-sized businesses (SMEs) 241 Multi-unit businesses: replicated deployments 242 Variations across the applications portfolio 245 Problem-based: key operational and support investments 247 Innovation-based: strategic and high potential investments 248 Different application types 252 E-commerce and e-business 252 Information management (IM) 253 Customer relationship management (CRM) systems 256 Enterprise resource planning (ERP) systems 259 Infrastructure investments 263 Non-IT projects 266 Different IS/IT supply arrangements 267 Summary 271 9 From projects to programmes to portfolios 273 Defining programmes 274 Planned and emergent programmes 276 Programme dependency networks 276 The management of programme benefits 282 Managing the IS/IT project investment portfolio 284 Governance and portfolio management 285 Setting priorities 287 Links to drivers 290 Benefits management lite 293 Project portfolio management in practice 295 Summary 295 10 Creating a better future 299 The continuing challenge of IS/IT projects 300 Characteristics of the benefits management approach 300 The value of the process 301 Using benefits management to formulate and implement strategy 303 Incorporating benefits management into strategic thinking 308 Examples of benefits-driven strategies 311 Future trends in IS/IT and their implications for benefits management 312 A final word or two 323 Glossary 325 References 329 Index 337