Benefits management

Ensure that the business benefits associated with your cloud investments are realized and sustained.

In the early days of the cloud, discussions about the benefits associated with cloud adoption focused primarily on elasticity and cost effectiveness, including the ability to shift from capital expenses to operational expenses. As early cloud adopters and cloud-native businesses have demonstrated, the flexibility and breadth of services in the cloud enables businesses to accelerate growth and deliver new value propositions. As a result, these discussions have now shifted from the bottom line to business outcomes that drive top-line growth.

Today, organizations are using cloud to accelerate a broad range of business outcomes, including reducing business risk, improving environmental, social and governance (ESG) performance, increasing revenue, and improving operational efficiency. Incrementally realizing desired business outcomes can help strengthen future business cases and accelerate organizational digital transformation journeys.

Benefits management is the structure to define and track business outcomes that is an integral component of the cloud transformation journey. Benefits management helps accelerate value by incorporating business-aligned metrics and key performance indicators (KPIs) into the governance process, thereby facilitating collaboration between technology teams and the business.

This ensures coordinated focus on established business outcomes and delivery of faster and more predictable benefits to the end customer. A workstream-tailored scope is used to identify, document, and track business-driven value streams that may be used to articulate the return on the investment, ultimately creating a mechanism to measure the business impact of cloud transformation.

Start

Take a structured and wholistic approach to defining desired business outcomes. Consider using cloud to:

• Reduce business risk. Lower your risk profile through improved reliability and business continuity, increased performance, and enhanced security.

• Improve environmental, social, and governance (ESG) performance. Use insights to improve sustainability and corporate transparency.

• Create new revenue streams. Create new products and services, reach new customers, and enter new market segments.

• Increase operational efficiency. Reduce operating costs, increase productivity, and improve employee and customer experience.

Identifying desired business outcomes may not be straightforward as approaches may vary between each of the four categories. Focus on defining and aligning outcomes with metrics and value KPIs across multiple dimensions and groups (for example, business leadership, program directors, and technology delivery teams). To identify total cost of ownership (TCO) outcomes, compare the cost of running an environment on-premises with running an equivalent environment in the cloud. To help grow revenue, start with your customers and work backwards from their needs to identify the appropriate feature and product initiatives to pursue.

To facilitate the identification and documentation of specific, measurable, achievable, relevant, and time-bound (SMART) business outcomes, consider creating an alignment canvas for each customer persona. The alignment canvas enables customer definition, identification of “moments that matter” to customers, customer solutions, business outcomes from these solutions, and metrics that will measure these business outcomes.

The consolidated list of desired outcomes across the four categories is your benefits catalogue. The portfolio management team or another authorized team should set up a sustainable structure for measuring and tracking business outcome enablers and value realization tracking mechanisms.

Large-scale transformations often require foundational changes to enable new products and features to be effectively introduced to production. A detailed analysis of the development work necessary to support each business outcome is required to accurately align and track the delivery.

Advance

The portfolio management team enables appropriate tools to capture real-time metrics during the delivery process and track the realization of expected quantitative and qualitative outcomes post-delivery. The benefits management tools, such as benefit register, benefit realization roadmap, and benefits breakdown structures help to establish processes to monitor and control progress against the established benefit realization plan.

• Data-driven decision-making — To be successful, it is also important that business goals and priorities are established and overseen at the executive level. Executives must have access to and be able to track the delivery and realization metrics.

  • Split metrics into those that measure business outcome achievements (lagging metrics) and those that indicate progress towards achievements (leading metrics).

  • Leading metrics highlight issues in a timely manner to allow course correction; most common example is a sales funnel, where metrics through the funnel give the means to better forecast performance against a target.

  • Metrics and realized outcomes should be used to continuously update, improve, and refine the benefit management tools.

Excel

Organizations gain business commitments though transparent communication on the benefit progress report. The benefits management tools and framework should be used as part of demand management for future innovations, experiments, products, and features. The consistent use of the framework will allow the leadership to compare opportunities on common ground and focus commitments on the most important tasks that create the most value and business impact.