Realizing Value from Digital Transformation: Benefits Management Re-imagined

When organizations first harnessed information technology to solve business problems, automate processes and provide information, it could take many months, even years, to deploy an application. This situation changed two decades ago when Software-as-a-Service products, hosted in the cloud, became available. Today, technology has matured sufficiently, and it is possible to install an IT platform to support a global business process in a matter of weeks and to stitch multiple applications together into a reliable and agile architectural foundation. While legacy technology still poses a major problem, technology for new investments is no longer the bottleneck that it once was.This is likely one of the reasons why it is widely acknowledged that achieving digital transformation ambitions is less about technology deployment and more about the ability of the organization to adopt it and adapt to it, and to ultimately create real business value. But here is the conundrum: while the time to implement technology has been significantly compressed, achieving the organizational changes needed to reap benefits still require months and even years to achieve.A weakness in mainstream project management literature, especially when applied to technology-enabled business investments, is the assumption that the project is complete once the software is released, stabilized, and “accepted” by the project’s sponsor. Sometimes, a window of time is allocated to “finish” the project; an after-action or lessons learned report is produced, the project team disbands, and victory is declared. When considering the success or failure of projects, discussions usually revolve around the budget, schedule, the software and its acceptance, but generally not about the changes that the organization has experienced as a result of improved processes or enhanced capabilities or whether the expected benefits were delivered. Despite recognizing that benefits come from organizational changes, project management is still premised around scope, resources and time. This can be because benefits have not yet happened; the nature of most IT projects is that benefits only emerge many weeks and months after “go-live.” Victory is often declared prematurely.To promote the achievement of benefits from IT investments, the concept of Benefits Management was introduced in the 1990’s. Its aim was to focus on what business benefits were expected to be delivered from the investment and to accelerate the realization of these benefits from harnessing the capabilities of technology. This was achieved by identifying the organizational changes necessary to release these benefits, as well as tracking the benefits realized throughout the entire initiation-to-realization cycle. It also advocated that expected benefits should be aligned to key strategic drivers.Since the original work on Benefits Management was undertaken, the context for IT investments has changed dramatically. The initial research was focused on improving the performance outcomes from large enterprise system investments; these systems had an internal organizational focus and took considerable time to implement. Back then, how systems were built was also different, due primarily to the constraints imposed by technology, development frameworks and dominant practices. Technologies like AI and analytics pose particular challenges for managing benefits in that it is difficult to specify them prior to technology deployment. Moreover, today, technology is a competitive necessity; it is shaping business models and customers expect to engage with an organization in a digital way; and systems can extend outside the organizational boundary to ecosystem partners. Speed, innovation, and agility are critical determinants of success in a digital-first world, fundamentally changing how an organization competes. All of these changes impact the nature of projects and how they are set up and run.Although benefits management is an established concept in the project management and technology literatures, it is not well-known as an organizational practice. In this paper, we revisit the benefits management concept, discuss some of the adoption barriers, and suggest a number of ways to adapt benefits management to digital transformation programs.