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Benefits For Whom? - 26th Nov 2015
This document discusses defining and measuring benefits for major projects. It provides an overview of different types of benefits (e.g. economic, social, environmental) and evaluation methods (e.g. cost-benefit analysis, cost effectiveness analysis). Stakeholder groups are identified that may experience benefits. The document also notes challenges in benefits measurement, such as a lack of clarity in definitions and insufficient empirical research in academic literature. Future trends are discussed, along with the importance of vision for major projects.
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Benefits For Whom? - 26th Nov 2015
- 1. Oxford Major ProgrammesLtd. “Benefits for Whom?” Benedict Pinches
- 2. Hard and Soft QuantitativeQualitative Financial Non-Financial Cash flow User fees Customer Satisfaction Safety Dignity Well-being Tax revenue Competitiveness Sellable data Brand equity Pride Legacy Direct Indirect P Chapman et al, Authoritative Literature Review into the Benefits of Health ICT Investments
- 3. ‘Literature Review intothe Benefits of Health ICT Investments’ (DoH) 1,242 articles for Health ICT 1,810 articles for Government ICT investments 5,576 articles for Major Programmes 196 articles for Health ICT 167 articles for Government ICT investments 1,064 articles for Major Programmes 128 articles for Health ICT 126 articles for Government ICT investments 147 articles for Major Programmes 82 articles for Health ICT 57 articles for Government ICT investments 65 articles for Major Programmes P Chapman et al, Authoritative Literature Review into the Benefits of Health ICT Investments
- 4. ‘Determining and Deliveringthe Benefits of Major Projects’ (MPA, 29 April 2015) How is benefits realisation currently being performed? What knowledge for projects from one sector can be valuable to projects from other sectors? Is there something ‘special’ about major projects? Where does UK stand? What is the relationship between good sponsorship and benefits? How can stakeholders be aligned around benefits? MPA, The Value of Major Projects
- 5. ‘Benefits’ Definition fromthe Office of Government Commerce: The measurement of an outcome, or part of an outcome An end benefit is a direct contribution to a strategic objective Describes an advantage accruing from the outcome Answers the question of what a project delivers: why is this required? outcome output output output outcome output Benefit Axelos, Managing Successful Programmes
- 6. What Do WeMeasure? Benefit Categories economic social environmental learning
- 7. How Can WeMeasure? Evaluation Method Description Use Transaction costs Uses segmentation methods to calculate use and benefits to different user groups Quick and easy way to estimate potential cost savings from the introduction of eGovernment Net present value A straightforward method that examines monetary values and measures tangible benefits Relatively straightforward; use when cash flows are private and benefits tangible Cost benefit analysis A flexible method that measures tangible and intangible benefits and assesses these against net total cost Good consideration of all benefits, but can be expensive and time consuming Cost effectiveness analysis Focuses on achieving specific goals in relation to marginal costs Good for considering incremental benefits against specific goals Portfolio analysis A complex method that quantifies aggregate risks relative to expected returns for a portfolio of initiatives Good for consideration of risk, just use a consistent approach across a portfolio Value assessment A complex method that captures and measures benefits unaccounted for in traditional ‘Return on Investment’ (RoI) calculations Used by several governments to consider performance against all policy goals P Foley & X Alfonso, eGovernment and the Transformation Agenda
- 8. When Do WeMeasure? Project Output Business Change Intermediate Benefit End Benefit Strategic Objective Chain of benefits from output to objective Axelos, Managing Successful Programmes
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- 10. Builder/Buyer/User Groups A projectis required to build a railway bridge connecting the finance area of a capital city with a large housing development recently constructed on the other side of a river. The finance area also contains a world leading university. What project benefits might you consider defining and how would you measure them? D Gray et al, Gamestorming
- 11. The Affect Heuristic “Thepsychologist Paul Slovic has proposed an affect heuristic in which people let their likes and dislikes determine their beliefs about the world. Your political preference determines the arguments that you find compelling. If you like the current health policy, you believe its benefits are substantial and its costs more manageable than the costs of alternatives.” D Kahneman, Thinking Fast and Slow G Morgan, Imaginization
- 12. Experts rule? “Risk doesnot exist ‘out there’, independent of our minds and culture, waiting to be measured. Human beings have invented the concept of ‘risk’ to help them understand and cope with the dangers and uncertainties of life. Although these dangers are real, there is no such things as ‘real risk’ or ‘objective risk’.” Activity or Technology League of Women Voters College Students Experts Nuclear power 1 1 20 Motor vehicles 2 5 1 Handguns 3 2 4 Smoking 4 3 2 Motorcycles 5 6 6 Alcohol 6 7 3 Police work 8 8 17 Surgery 10 11 5 Mountaineering 15 22 29 Swimming 19 30 10 Preservatives 25 12 14 P Slovic, Perception of Risk
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- 16. Academic Findings Lack ofconstruct clarity Insufficient empirical depth Normative models Case studies Lower rated journals No reference class P Chapman et al, Authoritative Literature Review into the Benefits of Health ICT Investments
- 17. Future Trends faultline P Chapman et al, Authoritative Literature Review into the Benefits of Health ICT Investments
- 18. The Importance of Vision “Leadersare Dealers in Hope”
- 19. Benedict Pinches Founder andDirector Oxford Major Programmes Phone: +44 (0) 7956 677 483 Email: ben.pinches@oxmp.co Twitter: @oxmp Web: www.oxmp.co Facebook: http://on.fb.me/PzavIu
- 20. Bibliography P Chapman etal, Authoritative Literature Review into the Benefits of Health ICT Investments Major Projects Association, The Value of Major Projects OGC, Managing Successful Programmes P Foley & X Alfonso, eGovernment and the Transformation Agenda D Gray et al, Gamestorming D Kahnehman, Thinking Fast and Slow G Morgan, Imaginization P Slovic, Perception of Risk P Tetlock, Expert Political Judgement: How Good is it? How Can We Know? CBI, Building Trust, Making the Case for Infrastructure B Flyvbjerg, What You Should Know About Megaprojects and Why A King & I Crewe, The Blunders of our Governments