Projects are born to introduce changes. However, very often we focus all our attention on the tangible result, the easiest to see. The deliverable of the project gets all attention, while we lose scope of why we are carrying out the project in the first place. A project is more than a deliverable, it has impact and benefits that are aligned with the organisation’s vision and should not be taken for granted.
Project teams tend to focus their efforts on producing the tangible results, the deliverables. But in reality the project deliverables are the means and not the end, the real goal of the project is to achieve specific final results that lead to measurable benefits.
This is why project management uses terms like ‘project outputs’, ‘outcomes’ and ‘benefits’. It is very important that all the resources involved in the management and execution of a project (managers and team members) understand the relationship between these three elements.
What are output, outcome and benefits?
OUTPUT (deliverable): also translated as results. Output can be a product and/or service that introduces something new (a change).
OUTCOME: the change introduced by the output leads to an outcome, a final result, which offers direct benefits.
BENEFITS: the real “why” of the project. Benefits are measurable improvements resulting from the final result or outcome.
What are the characteristics of these three elements and what is their relationship?
- The outputs are easy to measure; it is easy to see whether the output has been created / achieved or not.
- Outcomes are more difficult to measure and they interest the user. To measure them, you can for example interview those who use the product and/or service.
- The benefits are the hardest part and are difficult to measure. They are of particular interest to the people who have to decide to carry out the project. To measure them you can use collected data, statistics or surveys.
Relationship between outputs, outcomes, benefits in a project, according to The PM² Methodology Guide v3.0
All parties involved in the project must be able to identify the outputs, outcomes and benefits of a project. Without understanding, project participants can lose sight of the original goal and produce deliverables that have little (or no) value for the organisation. Since the project team finishes its work with the delivery of the output, it is the Project Manager who must ensure that they are implemented. In order to do so he/she must create the vision from the beginning of the project and share this vision with the project team.
While it is true that often the final results and benefits are realized only after the closure of the project, it is necessary to avoid reaching the conclusion of the project without involvement and a clear vision for all team members.
For example, the output of a project can be the development of a new software that keeps user requests for a particular line of products. The outcomes can be service improvement, greater accuracy of the data collected and better user satisfaction. The benefits could be a 20% increase in product sales and 25% revenue growth.
Best practices for realizing the benefits of a project:
- Establish project KPIs: measuring is key. Also make sure you create the right structure to measure. The KPIs help the whole team to focus on common goals and ensure the alignment of all the resources involved.
- Involve the project team; if you are the project manager focused on the final results and benefits expected by the organisation, you will inspire other team members. It is important to always have in mind the reason for the project. If you are a team member, question yourself and question your project manager if you are not clear about the vision of the project.
- Clearly write in the Business Case what the planned (and therefore expected) benefits are. Review estimates regularly, especially if real benefits are difficult to measure.
- Project management methods can certainly offer you a useful tool to check performance and have tools to improve it.
Download your copy of the Benefits Management Approach Template PRINCE2: a useful document (word) that can support you in managing your projects!
Source: The PM² Methodology Guide v3.0