Benefits Realisation; why some NHS organisations are way ahead in delivering programmes that realise benefits and cost savings.by David Walton (No Comments )
In this blog, our resident PMO expert David Walton, gives his take on why the NHS is leading the way when it comes to benefits realisation.
Most people in the UK are complimentary about the NHS in terms of treatment of patients. They are often less complimentary about any NHS back office operation, e.g. project management; quite unfairly in many cases.
We have worked for both private sector organisations and public sector organisations including the NHS. Our specialisation is in programme delivery and PMO tools, i.e.: PM3, which is used in both private sector organisations and the NHS.
There is one area of project and programme delivery which I think the NHS is ahead of private sector organisations, namely: benefits realisation. I’m struggling to find more than a few examples in the private sector where the actual benefits being realised are measured against the original benefits plan.
Once a project or programme is delivered, the project team and sponsor are quick to progress to the next big delivery. The cynics amongst you will think that the key reason benefits are not measured is because they will invariably fall short of the original planned budgets and this will be too uncomfortable.
This may, of course, be true. One retailer that we worked with had a novel solution to this; the sponsoring department would have its sales targets increased or its budgeted costs reduced in subsequent years by the amount detailed in the benefits plan.
This drove 2 behaviours:
1) Sponsors did not sponsor projects unless they were sure the benefits or cost savings were delivered
2) Once a project was initiated there was a big focus on ensuring that these benefits were realised
This retailer is the exception though.
The NHS is very focused on delivering benefits including cost savings; partly because it must. The NHS needs to do more with less. NHS Trusts and Clinical Commissioning Groups (CCG) need to deliver improvements in service delivery and / or cost savings.
The provider and commissioning organisations are running programmes that are very focused on benefits and cost savings. I have been impressed by their approach to benefits realisation.
Specifically, they develop the usual benefit plans by project or scheme but they also identify:
- Disbenefits. For example a project may divert some patient visits from hospitals, which are very expensive, to community health centres. This can be a win for the patient and also for the NHS. However the cost reduction in hospital admissions has to be offset by a cost increase borne by the community health provider, i.e: a disbenefit
- Quality Impact Assessments (QIA). Each benefit needs to be considered and approved by a qualified individual to ensure that the quality of patient care is not adversely affected by any proposed project that is being delivered to reduce costs
- Recurring and non-recurring benefits. Benefits are closely scrutinised to ascertain whether the benefit is a one off (non-recurring) or annual (recurring). Recurring ones are then used to modify subsequent budgets
- Benefit plans are reported against on a monthly basis to ensure continued focus and, if a re-forecasted benefits plan has significantly reduced benefits compared to the original plan, then the project may be cancelled depending on the revised benefit plans
- Benefits are assigned a probability. If many benefits have a low probability of being realised, this is important information and senior management may decide not to initiate a project if the probability of significant benefits realisation is low
There are other ways that the NHS is good at realising benefits but these are the important ones.
Delivering projects and programmes only exist because intangible and tangible benefits can be realised for the organisation. It is strange that this part of project and programme management are often ignored.
In organisations like the NHS where the benefits including cost reductions are really crucial to the organisation, there is continued focus on checking that proposed benefits are actually going to be delivered. In Summary, there is a lot that private sector organisations can learn from the way that the NHS plans and realises benefits.
Bestoutcome provides Programme and PMO tools for the NHS, other public sector organisations and the private sector. Click for more information on how PM3 supports benefits realisation and QIPP / CIP programmes.
Example of Benefits dashboard in PM3:
Ambulance image by Benjamin Ellis used under the Creative Commons license.