Five Key Insights: Investment Logic Mapping, Benefit Planning & Benefit Realisation

Those who know me well will understand my affinity for a well-crafted plan. There's something deeply satisfying about seeing a vision come to life through strategic planning and meticulous execution. One framework that holds a special place in my heart is Investment Logic Mapping (ILM), a methodology I'm particularly proud of, originating from Australia - now adopted as a global standard in several sectors.

Originally conceived to provide a two-page briefing for Ministers to speak to, regarding major public works projects / public investments (for example the construction of the Sydney Opera House and the development of the Snowy Hydro Scheme - both iconic Australian projects that utilised ILM to articulate the project's vision and expected benefits succinctly).

I wanted to delve deeper into the significance of ILM, benefits planning, and benefits realisation within the broader context of project management and business case development. While ILM lays the groundwork for articulating project/investment objectives and expected benefits, benefits planning and realisation are integral components of the business case process. Unfortunately, benefit realisation is often managed poorly in many instances, leading to missed opportunities, unrealised potential and negatively impacting the credibility of the business case.

Here's a link to a Miro template I published that ultimately guides the end-to-end ILM/benefits mapping process.

In this newsletter I've covered key benefits of utilising the ILM and benefits map template:

1. Solid anchor for your business case development

Many potentially valuable projects and investments are unsuccessful because:

• the core need for the investment was never really understood, or
• the people who were crucial to driving its success were not properly engaged.

The template guides you through a structured process, ensuring that your business case is well-organised and logically sound. It achieves this by framing three core questions:

1. What is the problem that is driving us to consider a new investment (both the cause and effect)?
2. Is there evidence to confirm both the cause and effect of the problem?
3. What benefits can the organisation expect in successfully responding to the problem?

ILM helps project teams and stakeholders clearly define the problem driving the need for an investment. In software projects, this means understanding the pain points, challenges, or gaps that the project aims to address. For a business case, ILM ensures that everyone agrees on the problem statement, which is crucial for informed decision-making.

2. Engages your key stakeholders early - 'skin in the game'

My favourite part of an ILM process is the initial workshop that engages the key stakeholders in the potential project. The key person is the?investor?– the person who has the business problem and will be responsible for delivering the benefits. The investor would bring together those people who understand the problem(s) and can provide the evidence that will validate that the identified problem(s) are real.

No specific preparatory work is necessary for participants as those attending should possess the requisite knowledge to contribute meaningfully to the discussion.

The format tends to be a structured, two-hour session led by a capable facilitator. The bulk of the time will be devoted to identifying and articulating the problem(s) in clear, straightforward language that delineates both the cause and effect. Additionally, all problems put forth must be substantiated by evidence.

Once consensus is reached on the identified problems, the discussion shifts to exploring the potential benefits that could accrue from successfully addressing these issues.

3. One-page depiction of problems and benefits relationship

At the conclusion of workshops, a concise representation of both the identified problems and their corresponding benefits, illustrating their interconnection, will be compiled into a single-page document known as the Investment Logic Map (ILM).

Although the Investment Logic Map offers a comprehensive overview of the problem and the anticipated benefits resulting from its resolution, the journey doesn't end here. Before determining the appropriate course of action, it is important to define the evidence necessary to validate the realisation of these anticipated benefits.

4. Clear articulation of the benefit areas and measurements

Often, benefit management plans, if developed at all, are an afterthought once a solution is already determined. Crafting these plans is more of a justification exercise - asking, "How can we present this as a good idea?"

However, to effectively address a problem, it's crucial to first define what success looks like. Without a clear understanding of the desired outcome, it's challenging to select a response or compare different options.

The second workshop ("benefits workshop") aims to establish the foundation for the investment's success by creating the initial draft of a benefit management plan. This plan will evolve as the investment progresses.

Key Questions to Address:

1. What evidence is needed to demonstrate that the identified problems have been effectively resolved?
2. What are the key performance indicators (KPIs) to measure success?
3. How will these KPIs be measured?
4. What are the current baseline, target values, and timelines for these measures?
5. Who is responsible for delivering the benefits?
6. How will the benefits be monitored and reported?

The Benefit Management Plan (BMP) is the outcome of this process. It's a concise document outlining the prerequisites for each expected benefit's delivery, how each benefit will be measured using KPIs, and who will be accountable for measuring and realising each benefit.

5. Vehicle for revisiting initial intent and monitoring benefits

Despite the initial emphasis on benefits, once an investment is funded and underway, the attention often shifts away from these objectives. Challenges and stresses inherent in the implementation process can further distract from the original purpose. Compounding this issue is the historical difficulty in accurately measuring and tracking benefits, which hampers the ability to assess the project/investment's true effectiveness.

Monitoring and evaluating the delivery of benefits is crucial. It ensures a continuous focus on reaping the intended benefits throughout the implementation of an investment, determining whether the anticipated benefits were actually realised.

Adopting these practices serves several purposes:

1. Enhances the return on investment by extracting maximum benefit.
2. Validates the success of completed projects/investments.
3. Offers valuable insights to shape future investments/projects.
4. Facilitates informed decision-making based on tangible outcomes.

Ultimately, the primary concern for decision-makers when considering an investment proposal is the expected benefits it promises to deliver.

I hope you found this useful!

OneAdvanced Launches 15 April 2024

As an additional note, I'm super delighted and proud of the work all my colleagues have undertaken and continue to drive forward on with the launch of our new company brand and strategic outlook at OneAdvanced - take a look at our launch video below!

All the best,

Mark

Mark Reddy

Global Director of Growth - Finance, Spend & Governance

OneAdvanced

W: www.oneadvanced.com/solutions/spend-management/

E: [email protected]

P: +44 7498 558862