Ward and Daniel offer suggestions for transforming measurable to assessable:
1. Pilot operations. For example, implement a new inventory system in one branch and carefully monitor results. Extrapolate changes company-wide.
2. External benchmarking. Monitor what other industry members are achieving using their approaches. If possible, monitor the best-in-class performance. If a rival performs better and uses a particular approach to business, then there might be evidence there about how the performance would change.
3. Reference sites. External benchmarking is not available for changes that are relatively new to an entire industry because there are few comparisons available. However, unless a company is absolutely the first, often reference sites will exist where suppliers have persuaded another organization to be an early adopter of new technology or methods. Some care is needed here as, obviously, suppliers will not readily provide information about their failures.
4. Modelling and simulation. For example, if an organization has a sophisticated financial model on a spreadsheet, then different assumptions can be introduced and the results quickly seen. Call centres keep very careful records of queuing times and the number of callers who hang-up before being attended to. They can extrapolate with some confidence the effect of reducing waiting times.
5. Historical internal data. This is particularly relevant to organizations thinking about stopping an activity. It is important that their cost data is accurate so that the true implications of ceasing an activity are properly quantified. Activity-based costing is almost certainly more relevant than the conventional treatment of fixed overheads.
Financial benefits
Once changes have been quantified, it should be a reasonably easy step to convert those to financial effects. It is important that this is done – at least for profit-seeking organizations – and that the calculations are not distorted to ensure that a project is improperly justified. Typically, net present value or return on capital calculations will be used to evaluate the financial effects. Sensitivity analysis will be an essential part of the exercise to identify risk areas and plan for more investigative work to be done there.
Planning of benefits realisation
Planning of benefits realization means:Benefits Realization is the process of identifying executing and measuring benefits.
1. Assigning dates by which defined benefits should be enjoyed
2. Detailing the implementation and change management procedures needed to ensure that the expected benefits are actually achieved as fully as possible
3. Establishing dates and methodologies for measurement of the benefits for subsequent comparison to plans.
Benefits realization also the ways of managing how time and resources are invested into making desirable changes.
Note that the opportunities for benefit creation will start with completing the various parts of a project its activities on time, within budget, to the correct quality standards, and focused accurately on previously agreed outcomes. although each part of a project can be properly delivered, the project as a whole can fail to produce benefits unless it is whole-heartedly embraced by key stakeholders. For example, a technically excellent new website could be implemented, but if choose not to use it then few benefits will arise.
KEEPING PROJECTS UNDER CONSTANT REVIEW
In UK for example, the Office of Government Commerce (OGC) is an independent office of the UK Treasury, established to help government deliver best value from its spending. The OGC has developed the OGC Gateway (TM) Process in which projects are examined at various key decision points before they are allowed to progress to the next stage. This UK-based example is indicative of a formal system of project implementation and review where evaluation takes place at several point points to ensure that the original business case, the project objectives and expected benefits continue to be achieved. The process can be represented as follows.
After the project business case is established, review 1 would be carried out to examine the justifications and arguments presented. The reviewing board will be looking for benefits and disbenefits that might have been overlooked or assumptions that appear to be unrealistic.
If all is well, the project will go forward to the next stage in which a detailed delivery strategy is worked out. The ‘Who? How? When? What?’ questions are addressed here. For example:
1. Who will be on the project team?
2. How much will be subcontracted?
3. What exactly will be delivered and by when?
Review 2 will look critically at these decisions and objectives. Only when the reviewing board is satisfied that the project is sufficiently well-defined and specified will it give the go-ahead to receive tenders from outside suppliers.
After the competitive tenders have been received, the next stage will be signing a supply contract and committing the organization to substantial expenditure. Before that is done, Review 3 will look at the tenders received, their costs, the standing and competence of the suppliers and whether – now that costs are known more accurately – the project still offers value for money net benefits.
Assuming the supply contract is signed, then investment in the project will start. It could be an IT project requiring software design, writing and testing; it could be a project to reorganize the structure and reporting lines of the company; it could be a project to merge with a rival organization. However, before action is taken and the software or plans are implemented, it is important to review what is proposed. There is no point in trying to implement proposals that are not-tested, incomplete or poorly designed. Review 4 will look at the project plans and see if they are sufficiently robust and comprehensive to attempt to implement. It will also be necessary to ensure that the organization is ready for implementation of the plans.
Review 5 then looks at the results that the project is delivering. Have the expected benefits materialized? If not, then why not? Can shortfalls in benefits or unexpected disbenefits be corrected? Review 5 could be carried out several times as the new solution gradually settles down and management problems are ironed out.
Note carefully the purpose of Review 0. This should be carried on continuously throughout the project and is there to keep questioning whether the original business case on which the project was predicated remains valid. No matter how meticulously a project is managed, changing events can suddenly undermine a business case. For example, a project to build a new factory can suddenly look uneconomic if the economy suffers a sharp fall. Or, further investment in a project might be pointless if its completion seems to be in jeopardy because funds have become very tight.
FINAL RESULTS
Project description should include/ classified the following information:
1. Identify the problem you want to solve by acquiring grant funds. …
2. Include information about any steps you have already taken to solve the problem.
3. Create a timeline for your project. Grantors like to know when your project will be completed. Don’t worry if this is an ongoing project.
4. Define who will profit from your project
After a project has been implemented, there are three types of review that should be performed, reflecting different perspectives.
1. A post-project reviews. This examines how the project went in terms of how the project team and how the project manager performed and identifying what aspects of planning and review went well and what didn’t go so well. Was the project completed within time and budget? The focus here is on the project. Lessons learnt are fed back into the project management system. For example, if the project estimation was poor, then better methods of estimation might be integrated into the project management process to help ensure that future estimates are more accurate.
2. A post-implementation reviews. This is essentially the review 5 and it examines what the project achieved its product or outcome and should compare the post-implementation observations and measurements with the hoped-for benefits that were the basis of the original business case. As part of this review, it will be important to gather information from key stakeholders. The initial focus here is on the product or outcome produced by the project. Does it meet its objectives? Lessons learnt are fed back into the product production process – for example, in the development of a website, technical mistakes might be fed back into the software development process to help ensure that they do not happen again in the future.
3. Benefits realization is a type of post-implementation review. It focuses on the realization of the anticipated business benefits. As mentioned before, it could be performed several times, reflecting the expected benefits timing defined in the formal investment appraisal. A product might be successfully delivered for instance, a new website or the merger of two organizations; however, the anticipated business benefits may not be delivered. Lessons learnt in benefits realization are fed back into the benefits management process. For example, this could lead to better ways of classifying benefits. It is important to recognize that an appropriate product might be delivered a website, but the anticipated business benefits may never accrue. The reasons for this must be investigated and understood. Perhaps the initial business case was over optimistic or perhaps external business factors have changed that prevent the business benefits from being delivered.
Without these reviews, an organization will be condemned to repeating any mistakes it may have made and will be unable to make use of any lessons learned.However, in your project the following must be inclusive.
1. Provide an executive summary.
2. Write an introduction. …
3. Explain key data in a methodology section.
4. List the resources needed for the project.
5. Provide a projected or allotted budget. …
6. Include a project timeline.
7. Describe project challenges and provide solutions.
Dada Suraju Adefolami, FIMC, CMC. Professor of Finance, School of Business Administration, UNEM University Costa Rica, is a Finance / Management Consultant and Certified Forensic Accountant. You can reach him via: [email protected]; 08052043855
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