HERE IS ONE BASIC TECHNIQUE TO MEASURE INTANGIBLE BENEFITS. AND IT´S NOT ROCKET SCIENCE.
PRINCE2 requires the project manager to define how to measure intangible benefits in the benefits management approach (BMA) .
Project benefits can be tangible or intangible. But in either case, they must be measurable. Project managers tend to find reckoning how to measure intangible benefits a bit confusing.
The project manager prepares the BMA alongside the project initiation documentation in the initiation stage. For tangible and intangible benefits alike the BMA should include measurable baselines and benefit realization milestones. Accordingly, BMA also requires an appropriate measuring and verification procedure that would allow to confirm that benefits are being realized as planned.
BMA is the only element of project initiation documentation that needs to survive project closure. More often than not, the bulk of benefit realisation takes place in post-project. First, a PRINCE2 project will deliver outputs in the form of products. Their use will then result in changes in the business. These changes will create new outcomes. And these outcomes will allow the user to realise benefits they set out in the business justification for the project.
By the way, it is equally usual that a project includes key user´s products that will realise benefits for the user during project lifecycle. But that´s one subject for a different post.
Back to our topic, quantification of tangible and intangible benefits becomes of importance to:
- the project manager who prepares the BMA based on inputs from senior user;
- the executive who approves the BMA and accepts accountability for benefit realization during the project lifecycle.
Intangible benefits can come in different appearances.
A common one is a gain in positive public perception of a business or an organisation. Realisation of this benefit can become desirable for businesses operating in sensitive environments. Examples include lithium mining, oil and gas prospecting, hardwood harvesting, palmito and oil palm growing.
On a more general note, any business that is not CO2-neutral can nowadays earn scorn of environmental activists. There is full realisation that negative public perceptions can lead to a drop in revenue. As a remedy, vulnerable organisations engage in proactive image-building that can take the format of an ongoing succession of PR projects. And in the case of an accidental damage to the environment, reactive action aimed at urgent reversal of a dive in public approval becomes a pressing necessity. Here again, the project format comes in very handy.
Another example of an intangible benefit is an increase in the level of job satisfaction as felt by corporate employees. Periodic monitoring of “staff happiness” levels and taking measures aimed at boosting them are often conducted in project format, too.
Realization of this benefit becomes particularly important in situations of internal restructuring in response to “black swan” type of events. The global economic downturn caused by the COVID-19 pandemic is one fitting example.
At the project´s start, an initial measuring of public perception or job satisfaction will be conducted to establish a baseline. Additional appraisals using the same technique will need to be repeated at intervals determined in the BMA. In the managing a stage boundary processes, progress in benefit realization will feed into the assessment of continued business justification. In the closing a project process, another valuation will create a baseline for the transfer of accountability for benefit realization from the executive to the senior user. And in post-project, further periodic measuring will show progress towards full benefits realization.
True enough, methods of measuring intangible benefits can occasionally become fairly intricate. But that doesn´t have to be always the case.
As a matter of fact, the project manager will tailor benefit measurement techniques to match and never to exceed the structural complexity of benefits. And even on a complex project, there is often a way to express benefits in reasonably simple terms.
One basic technique broadly used for measuring intangible benefits is a poll. Even a rather simple one can produce a statistically valid quantification of perceptions. And a widespread format of a poll is a questionnaire. Ah, well, now that sounds familiar ground, doesn’t it?
Little wonder then that there is more than sufficient open-source information available to help project managers pick a fitting sampling method and put together a questionnaire around it. The involvement of senior user will be key since they have the overall responsibility for benefit realisation. And the executive´s approval will be required since baseline setting and initial benefit measuring will in all cases occur during the project lifecycle. Even more so if the projects involves key user products .