Importance of Benefits Management in Strategic Change Initiatives

1 C11SP Strategic Project Management 2015/16
IMPORTANCE OF BENEFITS MANAGEMENT IN
STRATEGIC CHANGE INIATIVES: A CASE STUDY OF
PORTFOLIO DEVELOPMENT AND CHANGE
MANAGEMENT IN IBM UKRAINE USING BENEFITS
MANAGEMENT
Tulin Dzhengiz H00232784
Oleksii Pominovskyi H00214911
Shy-Nien Koong H00214525
Nursultan Zhakas H00227733
Oybek Nasirov H00213985
Abstract
Benefits Management (BM) or Benefits Realisation Management (BRM) is discussed in
different industries for its implications in the field of project portfolio management. Even
though the development of BM is relatively new, it is becoming a managerial concept that
is widely used in strategic change initiatives. BM gives the opportunity to consider various
benefits (tangible-intangible) in a defined strategic change case to link the strategic
objectives and particular projects undertaken. Even though there are limitations in the
tracking of benefits realisation due to measurement, BM is promising for companies in
emergent environments implementing change initiatives by introducing projects and
programmes. This paper examines the existing efforts in BM as a managerial concept with
a greater focus on its role in strategic alignment and realisation process (benefits tracking
and monitoring). As a research method a case study is used to show the practical implications
of BM in a global organisation. The case study proves the usefulness of BM in change
initiatives and presents BM implementations in a global organisation that is similar to the
existing literature.
KEYWORDS: Programme and portfolio management; benefits management; benefit
realisation; strategic change.
Introduction
Benefits management is a process that enables management to ensure the expected outcomes
of a change initiative to be realized (Breese et al. 2015; Bradley 2006). The literature on BM
focuses mainly on cases with IT-enabled change initiatives (Breese et al. 2015). Even though
IT-enabled change initiatives are good examples to observe how BM can be implemented,
the definition of BM should be broader and not limited with IT projects in companies. BM
is a broader concept of value creation and BM should be seen as a tool for managing and

developing portfolios and programmes where the expected outcomes of different
stakeholders can be realized (Thorp 2003; Bradley 2006; Breese et al. 2015).
Benefits Management is a relatively new concept in the area of project portfolio management
and its history is linked to the emergence of programme management and portfolio
management studies carried out by scholars and practitioners (Thorp 2003). Benefits can be
tangible or intangible performance improvements recognized by the stakeholders. Benefits
can be either financial improvements or non-financial improvements and therefore it may be
hard to quantify or measure. It is also important to emphasize that different stakeholders will
perceive the created value and realized benefits in a different way (Sanchez & Robert 2010;
Bradley 2006; Breese et al. 2015).
Benefits management contribute to programmes and projects success and add value by
reducing costs and realizing expected outcomes that are of importance for different
stakeholders. Therefore, this paper argues that strategic change initiatives should be carried
out using benefits management to ensure the alignment of the strategy with
projects/programmes using benefits realisation methods either qualitative or quantitative
depending on benefit classification. This argument will then be supported by a business case
of IBM Ukraine. IBM has developed a new portfolio in Ukraine in line with their global
strategy, utilising their resources and expertise with the objective of diversifying this
portfolio. The case will show how IBM implemented the principles of benefits management
to ensure the success of the change initiative.
LiteratureReview
Benefits Management as a managerial concept
The term ‘benefits management’ was used in the late 1980s (Barbara Farbey 1999). Later,
BM became a vital part of the development of project management in the late of twentieth
and early twenty-first century (Winter et al. 2006). It is suggested that there has been a
paradigm shift from traditional benefits realization principles to new benefits realization
principles (Sapountzis et al. 2008; Tillmann et al. 2010). This paradigm shift is towards a
more flexible, emergent and proactive approach to benefits (Sapountzis et al. 2008).
This paper suggests that BM should not be limited with programme and project management,
but also should be accepted as a specific managerial concept. BM is defined as the process
of organising and managing, so that potential benefits, arising from investment in change,
are actually achieved (Bradley 2006). APM defines BM as a ‘strategic business skill for all
seasons…centred on using benefits management to align the journey from business strategy
to delivery to the embedding of change within organisations’ (APM 2009). Some scholars
focus on the value creation aspect of BM and define BM as the promotion of ‘a different
mindset, based on an approach that manages value on an active basis’ (Jenner
2009). Thereby, benefits management is a way to align the strategy to projects so that the
deliverables are connected to the expected benefits. Benefits management is therefore a

managerial concept which does not only serve for the delivery of a programme and related
projects on time, on budget at a certain quality but also taking it to a step further ensuring
the expected outcomes to be realized.
Benefits management: A bridge between strategy and projects, programmes,
portfolios
Companies have their vision, mission and objectives defined at a strategic level. Projects or
a set of projects are governed together (programmes) are created to achieve the strategic
goals defined (Thiry 2002). Any kind of strategic change is implemented or achieved by
means of different projects or programmes which have their defined goals and targets.
Typically, project management success is being measured in terms of cost/budget/quality
mostly in short term period, what does not show correlation with strategic level targets. At
the same time, project deliverables and benefits overall success measures (what really
contributes in strategy) are more complex and usually defined in long term period. That
causes most project managers on practice to concentrate mostly on fulfilling project
management itself, which is what they are usually expected to do (Wateridge, 1995).
Nevertheless, many scholars admit that successfully implemented projects do not guarantee
realizing strategic goals even if projects were finished in given cost/time/quality frames
which caused many researchers to focus on adjusting strategic goals of the organizations
with project outcomes (Cooke-Davis et al. 2009) and alignment of projects, programmes,
portfolios with strategy found to be crucial (Cooke-Davis et al. 2009). Benefits Management
serves as the main “bridge” between designing the strategy and its implementation, making
sure the targets are met (Serra & Kunc 2015).
To sum up, organisational success or success of a change initiative depends on the project
management success and the strategic alignment between strategy and portfolio/programme
and projects.
Benefits Realisation Process
Benefits realisation management is a process of organising and managing so that these
benefits tangible or intangible perceived by the stakeholders are realised in a programme or
a portfolio (Bradley 2006). This process includes identifying these benefits and linking to
the organisational strategy which created the strategic alignment, planning and tracking as
well as reviewing and monitoring the realisation of benefits (Sapountzis et al. 2008; Yates
et al. 2009; Bradley 2006). Figure 1 explains the OGC Gateway Framework (Tjernstrom
2008) approach to benefits realisation management as a process.

Figure 1: Benefits Management Process. Source: (Tjernstrom 2008)
Moreover, some scholars propose that BM process itself creates the value as more focus on
benefits tracking helps to increase productivity (Bradley 2010). Therefore, BM may
considerably decrease the risk of projects failure or investment mistakes by making sure that
the benefits are identified, planned, monitored, measured and realized.
Benefits Classification and Qualitative/Quantitative Models in Benefits
Realisation and Tracking
Benefits can be classified according to the value they create and therefore can be classified
as tangible and intangible (Too & Weaver 2013; Yates et al. 2009). Tangible benefits are
defined as benefits that have financial implications that can be quantified, whereas intangible
benefits are the benefits where the value is subject to discussion and therefore hard to
quantify due to the perception of stakeholders and subjectivity (Sanchez & Robert 2010),
which is why intangible benefits are called as soft benefits and tangible benefits are also
called as hard benefits in literature (Sapountzis et al. 2008).
Benefits realisation tracking can be done by qualitative or quantitative methods (Tjernstrom
2008). Qualitative methods suggests frameworks to track both tangible and intangible
benefits. However, quantitative methods focus on the quantification of benefits that are
tangible and usually financial.
Different qualitative frameworks can be found on the literature developed or used for
different cases such as IT projects (Ashurst & Hodges n.d.; Doherty et al. 2005) or area
regeneration projects (Breese 2012). These frameworks usually focus on linking the vision
to helpful mechanisms such as organisational capability, organisational structure or skills as
well as conceptualising the benefits realisation process and focusing on the strategic

alignment (Thorp 2003). “The Result Chain” can be given as an example to measurement
approaches to benefits realisation in Figure 2 (Thorp 2003).
Figure 2: Result Chain Approach as an Example. Source: (Thorp 2003)
The studies that focus on the quantitative evaluation of benefits usually focus on profit
maximisation or cost reduction benefits from a shareholder point of view, using cost-benefit
ratio, ROI or key performance indicators (Lappe & Spang 2014). In practice, some project
and programme managers would use KPIs for measurement and track the benefits and
monitor if they are realized according to these KPIs, however researchers also acknowledged
that KPIs may not be a common practice for all project/programme managers (Bennington,
Peter; Baccarini 2004).
It may be easier to measure deliverables in a project level. However, at a programme
portfolio level where organization is making a strategic move the perceived value of
stakeholders would vary. Even though some scholars are striving to measure and quantify
benefits (Lange et al. 2012; Thomson et al. 2011; Sanchez & Robert 2010), strategic changes
usually consist many stakeholders, many intangible outcomes with a varying time to realize
these benefits which complicates measurement or quantification.
There are also hybrid models including both qualitative such as employee satisfaction,
customer satisfaction, transparency and quantitative measures of benefits such as
organisational and project costs (Lappe & Spang 2014). This paper argues that tracking of
benefits is crucial in benefits realisation process, and companies use and must use both
qualitative and quantitative methods to evaluate their benefits realisation. Table 3 presents
some models that are used in benefits realisation tracking and measuring.

Sources SuggestedModel Advantages of the Model
Sources for Qualitative Models
(Ashurst &
Hodges n.d.)
Maturity Model of
Competencies within the
Black-Box of
organisation.
Focuses on the benefits realization capability
and suggests different drivers of change may
require different competencies.
(Lange et al.
2012)
Enterprise Architecture
(EA)Benefits Realisation
Model
Defines organisational and project benefits
with regards to efficiency, effectiveness and
flexibility to test the benefits realisation of EA.
(Doherty et al.
2005)
Benefits Dependency
Network
Focuses on enablers, business changes,
benefits and investment objects in the model to
ensure the enablers are there to satisfy
objectives.
(Breese 2012) Benefits Hierarchy Links vision, objectives, outcomes, outputs
and activities.
Sources for Hybrid Models
(Lappe &
Spang 2014)
Components of ROI of
PM
Defines the qualitative and quantitative
components to be considered in benefits
realisation
(Thorp 2003) The Results Chain Linking time, people, reach a balanced score
card approach is suggested to measuring
benefits realisation. Not only focuses on the
finances, also focuses on organisational
capabilities, softer benefits and links to
strategy.
Sources for Quantitative Methods
(Sanchez &
Robert 2010)
Developing KPIs for
Project Portfolios
Considering a Strategic
Perspective
Setting of portfolio objectives, validating key
benefits, linking key benefits, objectives and
projects, visualizing the streams, determining
the project contribution to the achievement of
portfolio objectives, setting the thresholds for
the portfolio with regards to the KPI measured
(Mir &
Pinnington
2014)
Linking Project
Management
Performance and Project
Success
Long term organisational benefits and short
term project benefits are identified statistically
and valued by taking into consideration
different stakeholders to achieve overall
success
Table 3: Benefits measurement models.

The Case
Introduction to IBM Global and Benefits Management at IBM
International Business Machines Corporation (IBM) is a multinational technology and
consulting corporation, with headquarters in Armonk, New York. IBM manufactures and
sells computer hardware, middleware and software, and offers infrastructure, hosting and
consulting services in areas ranging from mainframe computers to nanotechnology. IBM
operates in three global areas: software development, hardware manufacturing and IT
outsourcing services. IBM has more than 379 000 employees and operates in 170 countries,
continuously expanding their business, 5th most valuable brand and 2nd in the IT Services
industry according to Forbes in 2014.
IBM delivers internal and external projects supported by Project Management Center of
Excellence of IBM. This methodology is based on the PMI recommendations and designed
to satisfy specific needs of the company due to its structure and strategy. IBM project
portfolio management methodology is critical to the IBM operations, as it is used by 22,703
project managers (1Q15, IBM PM Center of Excellence). IBM’s own methodology -
Worldwide Project Management Method (WWPMM) defines how IBM manages
programmes and projects by assessing risk and performance in a service project and
improving efficiency by defining clear tasks for project managers. WWPMM also defines
BM as “a practice which describes the process, activities, techniques and work products used
to manage program benefits”. WWPMM recognizes strategic alignment of vision,
objectives, programmes and projects which is why they try to eliminate major pitfalls like
poorly documented business plans, lack of mission and goals, or a poor understanding of
stakeholder concerns.
IBM recognizes the importance of tangible and intangible benefits of programmes or
projects and use both qualitative and quantitative approaches to realize benefits.
Figure 4&5 Explains the WWPMM guidelines with regards to the BM approach accepted
and used in the IBM organization (Kerzner & Learning 2010; Lisa Dyer, Andrew Forget,
Fahad Osmani, Jonas Zahn 2013).

Program
Manager
Determine
organization
strategy
Program
roadmap
Conduct
environmental
assessments
Program Chapter
Program
Roadmap
Define major
milestones
Program
Roadmap
Business Case
Figure 4: WWPMM Strategic Alignment Activity - programs are often initiated to deliver
benefits that are part of an organization’s long-term strategic plan. Source: (Kerzner &
Learning 2010; Lisa Dyer, Andrew Forget, Fahad Osmani, Jonas Zahn 2013)
Program
Manager
Establish
Benefits
Realization Plan
Benefit
Realization Plan
Define and
prioritize
program projects
Program
Roadmap
Define key
performance
indicators and
associated metrics
Key Performance
Indicators (KPIs)
Business Case
Establish
performance
baseline
Program
Financial
Framework
Review and
update
performance
measurements
Program
Management
System
Summary
Figure 5: WWPMM Activities in order to analyze, develop and plan benefits. Source:
(Kerzner & Learning 2010; Lisa Dyer, Andrew Forget, Fahad Osmani, Jonas Zahn 2013)
The Programme Business Case is the key document which provides detailed identification,
quantification and timing of expected financial and other business benefits (justifications)

derived from implementing the transformation project, and to formally document those. The
Business Case also identifies costs and assumptions used in the calculations, so as to provide
the true understanding of the benefits. It also should provide the record and road map
enabling personnel to claim all of the identified benefits and for the management team to
track actual versus planned benefits. The Business Case is the source for the
final presentation when gaining senior management or Board of Directors approval to
proceed with the transformation project.
Moreover, the Business Case outlines how actual benefits or results can be measured,
compared to existing metrics and benefits claimed, as recommendations associated with each
business process or function are implemented.
WWPMM recognizes:
 "hard" or quantifiable benefits with a presentation of measurements, such as total
project benefits ($), total project expenditures ($), internal rate of return (%), net present
value ($), discounted payback period (years) and/or other meaningful selected
measurements. May also include high-level cash flow analysis for 5-10 years ($/year).
 suggested "soft" benefits which are difficult to quantify,
 "Quick Hit" benefits to the client that can be identified and claimed based on the project,
which may or may not be solely due to the implementation of the recommendation
Examples of benefits realization measures are also whether or not benefits exceed their input
costs and whether they are delivered in a timely manner. This includes the dimensions of the
benefit (e.g., the date when realization must start) and a quantification of the benefit (e.g.,
hours saved, profit increased, market share increased, competitor strength reduced, or
incremental productivity improvements) and costs.
In order to make BM process controlled WWPMM focuses mostly on quantitative methods
like calculating and tracking Benefit Realization - includes Key Perfomance Indicators (KPI)
such as Return on Investment (ROI), Internal rate of return (IRR), Payback period, Cost
Analysis, Risk Analysis (add other financial analysis techniques based upon client and
project environment.
Figure 6 as below shows major processes within WWPMM which are recognized by IBM
as a part of the overall BM approach and must be conducted in scope of any programme
(Kerzner & Learning 2010; Lisa Dyer, Andrew Forget, Fahad Osmani, Jonas Zahn 2013).

Figure 6: WWPMM processes with regards to the BM approach. Source: (Kerzner &
Learning 2010; Lisa Dyer, Andrew Forget, Fahad Osmani, Jonas Zahn 2013)

IBM CASE STUDY IN UKRANIAN MARKET: STRATEGIC CHANGE IN IBM
ORGANISATION DUE TO PORTFOLIO DEVELOPMMENT– HOW DID IBM
ENSURED BENEFITS REALISATION
History of Retail Banking and IT Services in Ukraine
Early 2000s Ukrainian IT outsourcing market grew dramatically due to the international
influence and demand for IT software engineering services and IT support. Therefore, new
companies were established to satisfy this external demand and some international players
entered the Ukranian IT market (EPAM, Global Logic, Luxof, Ciklum). Most of these
companies diversified their portfolio by offering software development services both for
international and local businesses. Banking sector was one of the most attractive market for
these companies. Ukrainian banks were trying to reduce their operational costs for IT support
mostly as the number of banking branches were increasing from less than 8000 in year 2000
to more than 16000 in 2008 (Bank.gov.ua 2008). Other changes in banking area like new
legislation requirements and new technologies were pushing banks to outsource IT functions
as keeping internal staff for this purposes was becoming more and more expensive. Due to
the opportunistic market and high demand, more companies entered the market offering not
only software design services, but some infrastructure solutions (De Nova 2009). However,
none of these companies who offer outsourcing opportunities for IT systems for the banks
were able to offer the whole IT landscape support with a broader portfolio. After 2014, due
to unstable political environment in Ukraine, centralized IT activities or outsourcing IT
services became an urgent strategic matter of cost reduction, even though not all the
providers had heavy investments in the infrastructure and cannot offer a broader solution.
IBM Ukraine and UniCredit Bank
IBM started its operation in Ukraine in 1992 and by September 2006 became a fully
established operating subsidiary. Until 2011 IBM Ukraine mostly concentrated on hardware
supplies. After 2011, as the market opportunities were clear and IBM had the infrastructure,
IBM Ukraine started to offer consulting services in two major areas (traditional for the
company on global market) as well: global technology services and global business services.
PJSC Ukrsotsbank is one of the largest banks in Ukraine, providing retail, business,
corporate and private banking services. It has a network of nearly 400 branches and provides
services to over 2 million customers across Ukraine. In 2008 the bank became part of
UniCredit Group, one of the largest financial networks in the world.

Portfolio Development: Strategic Business Change in IBM with UniCredit
Partnership
IBM Global has a strategy of expanding its business operations in the Commonwealth of
Independent States (CIS). IBM Ukraine is one of these strategic business units and linked to
this expansion strategy (IBM 2015).
In the beginning of 2011 IBM Ukraine management decided to conduct a strategic change
which would allow IBM enter Ukrainian IT outsourcing services market and offer much
broader services than competitors as IBM provides the whole range. IBM therefore invested
on developing a new portfolio in Ukraine and the first contract was signed with UniCredit
Bank. This strategic move demonstrated IBM's momentum in growth and signaled its
readiness to expand its presence in Ukraine. This contract valued approximately USD$200M
and has a duration for 10 years. In terms of contract IBM took responsibility for the
development and support of UniCredit’s information systems and applications as well as the
management of the whole bank's IT infrastructure.
"This is the first instance of full outsourcing in the region and marks a new era in the IT
delivery model and in the development of Ukraine's financial services sector. Banks across
growing markets are currently under enormous pressure to reduce costs and manage
operational complexities whilst improving the customer experience. Unicredit has turned to
IBM for its unrivalled experience in the banking sector and to ensure that its customers
benefit from the very best technologies and business processes" said Joseph Benaroya, vice
president, IBM Global Technology Services (UniCredit Bank 2011).
Structural Changes: Creation of IT Innovations Ukraine
IBM did not have enough qualified staff to take over the management and maintenance of
Unicredit's IT landscape in Ukraine. IBM either needed to hire local staff and go through
HR selection processes or engage the IBM experts from knowledge centers in other
European countries. IBM needed to start serving UniCredit immediately, and the contract
allowed the existing IT staff of UniCredit bank to move to IBM organization to enable a
smoother transaction and gave opportunity to IBM to leverage the internal knowledge of
UniCredit. Figure 7 and 8 shows the structural change after the contract in IBM Ukraine and
UniCredit. This change was conducted as a global project for a new account (contract)
creation and a general coordination performed by the IBM Europe PMO. The transformation
was made clear by establishing the new structure (both with local and external staff) and
creating rules, policies and procedures and communicating the changes with stakeholders
involved.

Figure 7: Sequence of major transformational structural steps.
As a result of transformational changes Limited Liability Company IT Innovations Ukraine
(ITIU) was created which is a 100% subsidiary of IBM in order to ensure delivery of
strategic outsourcing (SO Delivery) project. However ITIU is a new portfolio developed not
only to serve UniCredit but also to gain other accounts and add programmes to the new
portfolio using the existing knowledge and experience. ITIU is designed to deliver
professional IT & consulting services to customers, including optimization and utilization
of IT systems, IT cost reduction and risk management especially to retail banking and
financial services industry through expertise in building innovative solutions and capabilities
for unlocking value in business performance. All activities of ITIU are executed in
compliance with IBM values and IBM quality policy and framework and especially
WWPMM guidelines for project and portfolio management.

UniCredit
Top Management
Business line 1
UniCredt Bank - Head Office
Business line 2
Supporting
divisions
Branch 1 Branch 2 Branch 3
IT Division
Sales network
control division
Logistics
UniCredt Bank - - Regional sales network
Local IT
support
Local IT
support
Local IT
support
IBM Ukraine
Hardware
Sales
Delivery and
support
IBM Ukraine
Hardware
Sales
Delivery and
support
IT outsourcing
services
IT Innovations
(IBM Subsidiary)
Global Technology
Services
Global Business
Services
PMO
IT architects
Hardware
Networks
IBM European
centers of
competence
IBM Ukraine after 2011
IBM Ukraine before 2011
Subcontractor –
regional support
Figure 8: Structural changes in scope of the agreement between IBM Ukraine and
UniCredit. Sequence of major transformational structural steps.
As a result of changes described above, at the end of 2011 IBM Ukraine managed to create
subsidiary structure with more than 150 qualified IT professionals (local and from
knowledge centers in other European countries). This structure is a unique combination of
global IBM knowledge in all the IT areas (both hardware and software) and is able to resolve
IT related task of any difficulty. This is currently a unique offering and a business model in
Ukrainian market that creates a strong competitive advantage.
Benefits Identification and Mapping during Structural Change
By outsourcing from ITIU, UniCredit planned to improve customer service, increase
performance efficiency and lower operational risk across its country-wide network of nearly
400 branches. Francesco Pusateri, head of UniCredit's Global Banking Services Division
(UniCredit Bank 2011) explained their benefits:
“By outsourcing our information technology activities to IBM we are able to focus on our
core business priorities while ensuring the best possible service to our customers. Leveraging
IBM's technology assets and industry experience we are able to transform the way we work

and run our operations. This step is an important enhancement of UniCredit Group's strategy
of concentrating on core business and cost optimization."
Table 9 & Table 10 identifies the expected benefits for IBM and UniCredit from this strategic
change.
Tangible Benefits of IBM Tangible Benefits of UniCredit
Increased profit – new log-term contract
contract for 200M USD.
Reduced operational costs (no need to keep
idle expensive staff in periods of low
activity),
New market expansion, increased market
share
Guaranteed SLAs from IBM for IT services
support – financial safety for the UniCredit
Increased efficiency of the IT infrastructure
– increased customers satisfaction
Table 9: Expected Tangible Benefits of IBM & UniCredit.
Intangible Benefits of IBM Intangible Benefits of UniCredit
Strong competitive advantage – no equal
rivals on the market
Expertise from IBM Europe knowledge
centers
New possibilities for cross selling (Supply
own hardware + offer own IT support
services + offer own IT outsourcing
services).
Direct access to IBM technology and
hardware support services
Increased internal capability for other
contracts
More mature PM approach (using IBM
methodology) – guarantee of relevant
projects execution and strategic programs
alignment
New powerful replicable oursourcing
model created that can be 'exported' to other
UniCredit businesses.
Table 10: Expected Intangible Benefits of IBM & UniCredit.
Figure 11 presents an alignment of IBM strategy and expected outcomes of the conducted
strategic change.

IBM Global
Objectives
IBM Ukraine
Objectives
Business ChangeEnablers
Expansion in CIS
Market
Reduced
Competitor
Strength
Increased Profits
about 200 million
USD
Increased Employee
Utilisation
Long Term
Contractual
Relationship
with UniCredit
Transferring
IBM
Methologies in
PM to ITIU
Rotation of IBM
Global experts
to ITIU
Creation of ITIU
as a local center
to serve IT
outsourcing
Embedded
knowledge in IBM
Global of IT
outsourcing
Demand for IT
Support Services for
IT infrastructure
Demand for
Hardware(Server-
Equipment)
produced by IBM
Demand for big
data and cloud
based service in
Ukraine
Demand for IT
Outsourcing
services in banking
industry of Ukraine
Benefits
Launched New
Projects for
UniCredit
Increased internal
capability for other
contracts
Increased customer
satisfaction of
UniCredit
Reduced
Operational Costs
Qualified and
experience staff of
UniCredit to serve
banks for IT
outsourcing
Increased trust in IT
outsourcing
recognized by
banking industry
Develop a new
portfolio- Enter IT
Outsourcing Market
Leverage IBM Global
Knowledge &
Resources
Increase market share
in IT industry in
Ukraine
IBM Global Vision
Create and Sell the
Best computer
hardware, software
and IT services in
the world
Keep- increase
market share in USA
market
Keep-increase share
in European Market
Exploit the external
environment in
Ukraine
Figure 11: The alignment of IBM strategy and expected outcomes of the conducted strategic change.

Analysis
From the business case described we can see that IBM implemented benefits management
approach to manage the change at a strategic level and managed the related projects linking to the
general strategy using benefits management ideology.
The strategic change undertaken by IBM is supported by the fact that Unicredit's agreement with
IBM represents a major milestone for outsourcing within the Commonwealth of Independent
States region. It sets a new gold standard and a reference point for major Ukrainian and Russian
financial enterprises seeking a more effective way of running large and expensive IT
infrastructures under challenging economic conditions. IDC believes that “This important
initiative will start a wider uptake of outsourcing services in the market," said Andrew Golovnykh,
senior research analyst, IDC Ukraine (UniCredit Bank 2011).
IBM also listed their expected benefits from this strategic change. IBM expected to enter a new
market with a new offering in accordance with their global expansion strategy and took advantage
of lack of competition in the market leveraging their existing knowledge in their global
infrastructure. This move gave opportunities for cross selling as well for supply their own hardware
and IT support at the same time. IBM also increased the utilization of their human resources by
rotating their experts to transfer knowledge. ITIU offers a package that can serve to other banks
like UniCredit and IBM is getting prepared to expand their portfolio by gaining new customers to
serve under ITIU subsidiary. Since June 2015 IBM is also negotiating with Credit Agricole Group
which can join ITIU portfolio.
Also, IBM’s focus on its core big data and cloud-based services is one more strong competitive
advantage on the background of the current political and economic situation in Ukraine.
IBM’s internal guidelines (WWPMM) are in line with the literature of BM, as it provides a general
managerial approach trying to achieve the strategic alignment of goals, managing the change
process and creating a plan to ensure the benefit realization.
Therefore, on the basis of the business case presented and the literature analysis, it is suggested
that BM should be considered as a managerial concept which is concentrated mostly on achieving
companies targets by aligning strategy and activities on programs and projects level. It is done
through building sets of processes which help companies to identify benefits and organize planning
and executing processes in order to deliver expected outcomes from projects and realize benefits.
In this way, BM focuses not on operational management of a particular project, but on the
identification of right benefits and realization of them by these pre-defined processes.
Moreover, BM activities itself help to create the value as through strategic alignment of the
programs and projects new opportunities are revealed and more focus on benefits tracking helps
to increase productivity. Tracking of benefits is crucial in benefits realisation process, and
companies use both qualitative and quantitative models to evaluate their benefits realisation
depending on benefits classification.

Conclusion
Benefits management process and benefits realisation monitoring and tracking is still being
discussed by scholars and practitioners. This paper argued that a strategic change must be
undertaken using benefits management as it helps the strategic alignment and tracks the realisatio n
of benefits defined by different stakeholders.
The case study from IBM Ukraine shows a structural strategic change in a global company. IBM
methodology places great emphasis on Benefits Management, as a managerial concept. Therefore,
during this specific change, IBM used their WWPMM guidelines with regards to the BM and
tracked their benefits. It is clear that IBM classified their benefits and as their WWPMM guidelines
suggested they used KPIs to track their tangible benefits. However, they also gave importance to
intangible benefits and used frameworks and stakeholder approach to track intangible benefits and
their realisation. This proves that companies that have structured guidelines and methodologies
about project and programme management like IBM are already practising BM. This case also
proves that benefits maps, hierarchies or dependency networks visualizes the strategic alignment
during a change initiative and gives importance to the realisation of both intangible and tangible
benefits.
The evaluation process of benefits is complicated due to the variety of stakeholders involved and
the difficulty of measurement when it comes to intangible benefits. Therefore “measurement” of
intangible benefits is a limitation and should be researched and discussed further. The complex
nature of benefits set a limit to quantify it. Defining the benefits according to stakeholders but not
only according to the shareholders increases the complexity of intangible benefits. ‘Business as
usual’ can discuss that quantifying benefits from shareholders’ point of view (focusing only on
cost reduction and profit increase) is a simpler solution. However changing dynamics in the
worlds’ economy and ecology prove that change initiatives require stronger stakeholder
engagement and therefore more research on linking benefits management and stakeholder
engagement is required, not only for non- profit but also for-profit organisations such as IBM.
The economy in developing countries require an emergent approach to strategic change, and
companies face strong external forces. These forces can also create opportunistic environment,
like it created for IBM in Ukraine and companies in those cases need a process to handle the change
and link it to the global vision. Benefits realisation is a process that could be beneficial for those
companies that are in emerging environments and its use is expected to become wider as it allows
to link the change initiative with vision, objectives and related project management activities.

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