Managing Benefits™ - Glossary (EN)

Accountable :  Personally answerable for an activity. Accountability cannot be delegated, unlike responsibility.
Accounting rate of return :  The average annual accounting profit divided by the average investment cost.
Additionality :  The benefits from an initiative that would not have been realized if the initiative had not been undertaken.
Aggregated risk :  The overall level of risk to the portfolio when all the risks are viewed as a totality rather than individually. This could include the outputs of particular scenarios or risk combinations.
Appraisal :  Evaluation of options or an initiative prior to investment.
As-is state :  The current operating structure and performance of the parts of the business which will be impacted by a programme.
Assumption :  A statement that is taken as being true for the purposes of planning, but which could change later. An assumption is made where some facts are not yet known. There is a risk that assumptions are not correct.
Assurance :  All the systematic actions necessary to provide confidence that the target (system, process, organization, programme,
project, outcome, benefit, capability, product output, deliverable) is appropriate.

Appropriateness might be defined subjectively or objectively in different circumstances. The implication is that assurance will have a level of independence from that which is being assured.
Baseline :  A reference level against which an entity is monitored and controlled.
Behavioural economics / finance :  The study of the effects of psychology on investment decision-making and financial management.
Benefit :  The measurable improvement resulting from an outcome perceived as an advantage by one or more stakeholders, which contributes towards one or more organizational objective(s).
Benefit Owner :  A person responsible for the realization of a benefit.
Benefit Profile :  Used to define each benefit (and dis-benefit) and provide a detailed understanding of what will be involved and how the benefit will be realized.
Benefits eligibility rules :  The set of rules about what benefits can and can't be claimed, and how they should be categorized, quantified and valued.
Benefits management :  The identification, definition, tracking, realization and optimization of benefits at initiative and portfolio level.
Benefits Management Cycle :  The cycle that encompasses the following five practices: Identify & Quantify; Value & Appraise; Plan; Realize; and Review.
Benefits Management Framework (portfolio) :  The document that provides all stakeholders with a single, authoritative and up-to-date source of advice on the portfolio management practices adopted by the organization, and its governance arrangements.
Benefits Management Strategy :  Defines the approach to realizing benefits and the framework within which benefits realization will be achieved.
Benefits Map :  A network of benefits, usually linked to one or more of the bounding investment objectives, which maps all the cause and effect relationships.
Benefits realization management :  The process of organizing and managing, so that potential benefits, arising from investment in change, are actually achieved. It is a continuous process running through the whole change lifecycle and should be the central theme of any change initiative, whether applied to the whole portfolio, a programme or a project.
Benefits Realization Plan (portfolio) :  The document that summarizes the benefits forecast to be realized in the year ahead and so provides a clear view of the planned returns from the organization's accumulated investment in change. It also provides the baseline against which to assess the benefits actually realized.
Benefits Realization Plan (programme) :  The document used to track realization of benefits across the programme and set review controls.
Benefits Register :  Summary document that contains key information from the benefit profiles.
Best Management Practice :  A defined and proven method of managing events effectively.
Bounding objectives :  The set of end objectives (usually three or four) defining the boundary of a programme or project.
Business as usual (BAU) :  The way the business normally achieves its objectives.
Business Case :  The justification for an organizational activity (strategic, programme, project, operational) which typically contains costs, benefits, risks and timescales and against which continuing viability is tested.
Business change authority :  An individual who represents a group of Business Change Managers, similar to a senior BCM or Business Change Sponsor.
Business change lifecycle :  A generic name used to represent any organizational process or framework which helps to guide the delivery of programmes and projects using a collection of repeatable processes and decision points.
Business Change Manager (BCM) :  The role responsible for benefits management, from identification through to realization, and for ensuring that the implementation and embedding of the new capabilities are delivered by the projects. Typically allocated to more than one individual and also known as 'Change Agent'.
Business change team :  A group of specialists appointed to support a Business Change Manager in the business change management aspects of benefits realization.
Business model :  A cause and effect model which describes the assumptions about how the organization creates and delivers value to customers or citizens.
Capability :  The completed set of project outputs required to deliver an outcome; this exists prior to transition. It is a service, function or operation that enables the organization to exploit opportunities.
Capital Asset Pricing Model (CAPM) :  A model that estimates the required return on an investment as the risk-free rate of return plus a premium reflecting the extent to which that investment's return varies in relation to the market as a whole.
Centre of excellence (CoE) :  A coordinating function ensuring that change initiatives are delivered consistently and well, through standard processes and competent staff. It may provide standards, consistency of methods and processes, knowledge management, assurance and training. It may also provide strategic oversight, scrutiny and challenge across an organization's portfolio of programmes and projects. It may be a function within the wider scope of a Portfolio Office. This function provides a focal point for driving the implementation of improvements to increase the organization's capability and capacity in programme and project delivery.
Champion-challenger model :  A technique whereby everyone is expected to comply with the defined portfolio processes (the current 'champion') but anyone can recommend a change (a 'challenger'). Once adopted, the 'challenger' becomes the new 'champion' process. Such challengers should be encouraged as a way of ensuring engagement across the organization, and the number of submissions received should be monitored on a regular basis.
Change Manager :  Reports to the Business Change Manager (BCM) and may operate at a project level to support benefits realization, namely focus on realization of a particular benefit.
Clear line of sight :  A technique that seeks to ensure a transparent chain from strategic intent through to benefits realization.
Coefficient of variation :  The standard deviation of an initiative's returns divided by its expected value - a relative measure of risk.
Contingent valuation :  Values determined by asking people how much they would be willing to pay for a good or service ('willingness to pay'), or how much they would be willing to accept to give it up ('willingness to accept').
Cost-benefit analysis :  Analysis which quantifies in monetary terms as many of the costs and benefits of a proposal as feasible, including items for which the market does not provide a satisfactory measure of economic value. Source: HM Treasury Green Book.
Cost-effectiveness analysis :  Analysis that compares the cost of alternative ways of producing the same or similar outputs. Source: HM Treasury Green Book.
Cross-organizational programme :  A programme requiring the committed involvement of more than one organization to achieve the desired outcomes. Also referred to as a 'cross- cutting' programme.
Customer insight :  Defined by the Government Communication Network's Engage Programme as: "A deep 'truth' about the customer based on their
behaviour, experiences, beliefs, needs or desires, that is relevant to the task or issue and 'rings bells' with target people."
Deadweight :  Benefits that would have been realized in any case even if the initiative had not been undertaken.
Decision-conferencing :  A technique whereby managers consider and debate in a facilitated workshop the relative weightings to attach to the organization's strategic objectives; the criteria to be used to assess strategic contribution in each case; and the scores to allocate to individual initiatives. In this way the portfolio governance body comes to a collective decision on the composition of the portfolio. This has been found to be very effective in terms of optimizing portfolio returns, and also results in enhanced commitment to the portfolio and to the portfolio management processes.
Delphi technique :  Where forecasts are derived from a panel of subject-matter experts who provide their estimates anonymously and then revise them in the light of the estimates of their peers.
Development pipeline :  The initiatives under development, concept and feasibility testing, prior to formal inclusion in the portfolio as 'live' programmes and projects.
Dis-benefit :  A measurable decline resulting from an outcome perceived as negative by one or more stakeholders, which reduces one or more organizational objective(s).
Discounted cash flow (DCF) :  Discounting forecast cash flows to determine the present value of an initiative. Undertaken by applying a discount factor to the cash flows reflecting the organization's cost of capital (adjusted for any initiative-specific risks).
Discounting :  Converting future costs or benefits to present values using a discount rate.
Dog that didn't bark test :  Assessing not only the identified benefits, but also asking whether there are any additional benefits that haven't been included. From
the Sherlock Holmes story 'Silver Blaze' where the crucial evidence was that the dog didn't bark. This is referred to by Kahneman (2011) as 'WYSIATI' ('What You See Is All There Is'). The risk is that we only consider the benefits included in the Business Case rather than also asking what other benefits may be possible.
Double counting :  Where the same benefits are claimed by, and used to justify, more than one initiative.
Economic benefits / value :  Benefits that have a monetary value attributed to them, but where the underlying benefit relates to time savings or some performance improvement - where there may be some financial impact but the benefit is itself non-financial. Also see 'financial/benefits value'.
Emergent benefits :  Benefits that emerge during the design, development, deployment and application of the new ways of working, rather than being identified at the start of the initiative.
Enabler :  Something that can be developed/built/acquired, normally from outside the environment in which it will be embedded and where the benefits will be realized.
End benefit :  One of a set of benefits which collectively are equivalent to a bounding objective.
Evaluation :  Assessment undertaken after implementation to assess whether the anticipated outcomes and benefits were realized and what lessons and insights can be applied to future change initiatives.
Expected value :  Expected value is calculated by multiplying the average impact by the probability percentage.
Financial benefits / value :  Benefits where there is a direct (cashable) impact on cash inflows (revenue generated) or outflows (costs saved). Also see 'Economic/benefits value'.
Formative evaluation :  An ex-post evaluation in which the focus is on learning to improve performance. It is essentially forward-looking as opposed to summative evaluation which compares actual performance against what was originally planned.
Generic risk :  Risks that apply to benefits management across the portfolio such as those arising from inaccurate forecasting, including nonrealization of anticipated benefits.
Governance (business change) :  Encompasses the structures, accountabilities and policies, standards and process for decision-making within an organization for business change to answer the key strategic questions of 'Are we doing the right things?', 'Are we doing them the right way?', 'Are we getting them done well?' and 'Are we getting the benefits?'
Health check :  A health check is a quality tool that provides a snapshot of the status of a project, programme or portfolio. The purpose of a health check is to gain an objective assessment of how well the project, programme or portfolio is performing relative to its objectives and any relevant processes or standards. A health check differs from a gated review in that it is a tool used for assurance purposes by the portfolio office to inform specific actions or capability maturity development plans, whereas a gated review is part of formal governance arrangements.
Hurdle rate of return :  The target rate of return set by an organization, which potential investments need to achieve in order to be considered for funding. Also used as the discount rate to convert future cash flows into the Net Present Value.
Initiative (change initiative) :  A programme or project.
Intangible benefits :  Benefits that are difficult to quantify and measure reliably, such as improved staff morale and decision-making. In such cases proxy indicators of such benefits can be developed.
Intermediate or enabling benefit :  Benefits which will occur between the implementation of early changes and the realization of the end benefits.
Internal Rate of Return (IRR) :  The annual percentage return (forecast or actual) from an initiative, at which the present value of the total cash inflows equals the present value of the total cash outflows.
Investment decision :  The decision to proceed with a programme or project. Also describes the entire lifecycle of a programme or project from inception (pre-start up) to use (closure).
Key performance indicator :  A metric (either financial or non- financial) that is used to set and measure progress towards an organizational objective or BAU operations.
Leadership :  The ability to direct, influence and motivate others towards a better outcome.
Management Board :  Generic term used to,describe either a Project Management Board, Programme Management Board or Portfolio Management Board, or any combination based on the P3O® context.
Management by exception :  A technique by which variances from plan that exceed a pre-set control limit are escalated for action, for example where spends exceed budget by 10%.
Management of Value (MoV®) :  A systematic method to define what value means for organizations, and to communicate it clearly to maximize value across portfolios, programmes, projects and operations.
Managing Successful Programmes (MSP®) :  An OGC publication/method representing proven programme management good practice in successfully delivering transformational
change, drawn from the experiences of both public and private sector organizations.
Market price or value :  The price at which a good or service can be bought or sold, which is determined by the forces of demand and supply in a market.
Maturity level :  A well-defined evolutionary plateau towards achieving a mature process (five levels are often cited: initial, repeatable, defined, managed and optimizing).
Maturity model :  A method of assessing organizational capability in a given area of skill.
Measure :  A quantity, derived from a set of metrics, whose change in the desired direction would help to confirm that the related benefit is being realized.
Modular initiatives :  An initiative that is broken down into modules, each of which delivers some benefits and where the decision to cease investment does not effectively mean all prior investment is wasted.
Monte Carlo Simulation :  A technique to calculate the probability distribution of possible outcomes. Commonly applied using relevant software.
Multi-criteria analysis :  A technique applied to the appraisal of options (option appraisal), an initiative (investment appraisal), or to rank initiatives (portfolio prioritization). Designed in part to address the issue of unreliable financial forecasts. is based on assigning weights to relevant financial and nonfinancial criteria, and then scoring options or initiatives in terms of how well they perform against these criteria. Weighted scores are then summed, and can be used to rank options/initiatives including by means of a Portfolio Map or by dividing the total score by the cost of the option/initiative to calculate a score per £/$/€ invested.
Net Present Value (NPV) :  The value of future net cash flows (inflows less outflows) discounted at the relevant cost of capital. Where the cash outflows exceed the inflows the result is the Net Present Cost or NPC.
Objective :  The intended outcome or goal of a programme, project or organization.
Office of Government Commerce :  OGC (former owner of 'Best Management Practice'). Now part of the Efficiency and Reform Group in Cabinet Office, HM Government.
OGC Gateway review :  A review of a delivery programme or procurement project carried out at a key decision point by a team of experienced people, independent of the project team.
Opportunity :  An uncertain event that could have a favourable impact on objectives or benefits.
Opportunity cost :  The value of the next best alternative foregone.
Opportunity value benefits :  The value of staff time saved where there is no immediate saving in budgets, unit costs or costs avoided. Rather the staff time saved can be redeployed to activities that would otherwise not have been undertaken. The result may be an improvement in quality, outputs and outcomes.
Optimism bias :  Defined by the HM Treasury Green Book as 'the demonstrated systematic tendency for appraisers to be over-optimistic about key project parameters, including capital costs, operating costs, works duration and benefits delivery. To address this, adjustments should be made to the estimates of programme and project costs, benefits and works duration based on empirical data.' Standard adjustments are included in the HM Treasury Green Book and on the HMT website.
Outcome :  The result of change, normally affecting real-world behaviour or circumstances. Outcomes are desired when a change is conceived. Outcomes are achieved as a result of the activities undertaken to effect the change; they are the manifestation of part or all of the new state conceived in the blueprint.
Output :  The tangible or intangible artefact produced, constructed or created as a result of a planned activity.
P3M3 :  The Portfolio, Programme, and Project Management Maturity Model, which provides a framework with which organizations can assess their current performance and put in place improvement plans.
P3RM :  The abbreviation for project, programme and portfolio management and risk management.
Pareto rule :  Also known as the 80:20 rule which states that 80% of gains will come from 20% of study activity.
Payback :  The period of time before the cash inflows from an investment exceed the accumulated cash outflows. Can use discounted or undiscounted cash flows.
PESTLE :  Acronym for 'political, economic, social, technological, legal and environmental'. A technique used generally in organizational change management to undertake an environmental scan at a strategic level.
Plan :  A detailed proposal for doing or achieving something, detailing what, when, how and by whom.
Portfolio :  The totality of an organization's investment (or segment thereof) in the changes required to achieve its strategic objectives.
Portfolio dashboard :  A technique to represent decision support information at an amalgamated level using tabular and graphical representation such as graphs and traffic lights.
Portfolio Definition Cycle (from MoP) :  One of the two continuous cycles within the portfolio management model containing portfolio management practices related to defining a portfolio, i.e. understand, categorize, prioritize, balance, and plan.
Portfolio Delivery Cycle (from MoP) :  One of the two continuous cycles within the portfolio management model containing portfolio management practices related to delivering a portfolio, i.e. management control, benefits management, financial management, risk management, organizational governance, stakeholder engagement, and resource management.
Portfolio Delivery Plan :  A collection of tactical information regarding the planned delivery of the portfolio based on the overarching Portfolio Strategy. The Portfolio Delivery Plan usually focuses on the forthcoming year in detail in terms of schedule, resource plans, costs, risks and benefits to be realized.
Portfolio Direction Group/Investment Committee :  The governance body where decisions about inclusion of initiatives in the portfolio are made.
Portfolio management :  Portfolio management is a coordinated collection of strategic processes and decisions that together enable the most effective balance of organizational change and business as usual.
Portfolio Office :  An office which is established centrally to manage the investment process, strategic alignment, prioritization and selection, progress tracking and monitoring, optimization and benefits achieved by an organization's projects and programmes on behalf of its senior management.
Portfolio, Programme and Project Offices (P3O®) :  The decision-enabling and support business model for all business change within an organization. This will include single or multiple physical or virtual structures, i.e. offices (permanent and/or temporary), providing a mix of central and localized functions and services, and integration with governance arrangements and the wider business such as other corporate support functions.
Portfolio Progress Group/Change Delivery Committee :  The governance body responsible for monitoring portfolio progress and resolving issues that may compromise delivery and benefits realization.
Post-implementation review :  The process of determining the nature and value of benefits achieved and lessons learned from the project.
Post-investment review :  An in-depth, independent review undertaken after initiative closure on behalf of the governance body that authorized the original investment.
PPM :  The abbreviation for project and programme management.
PRINCE2® :  A method that supports some selected aspects of project management. The acronym stands for PRojects IN Controlled Environments.
Programme :  A temporary, flexible organization created to coordinate, direct and oversee the implementation of a set of related projects and activities in order to deliver outcomes and benefits related to the organization's strategic objectives. A programme is likely to have a life that spans several years.
Programme management :  The coordinated organization, direction and implementation of a dossier of projects and transformation activities (i.e.the programme) to achieve outcomes and realize benefits of strategic importance to the business.
Programme Manager :  The role responsible for the set- up, management and delivery of a programme; typically allocated to a single individual.
Project :  A temporary organization that is created for the purpose of delivering one of more business outputs according to a specified business case.
Project management :  The planning, delegating, monitoring and control of all aspects of the project, and the motivation of all those involved, to achieve the project objectives within the expected performance targets for time, cost, quality, scope, benefits and risks.
Qualitative benefits :  Benefits of a subjective or intangible nature.
Quantitative benefits :  Benefits expressed in terms of a quantifiable improvement (in financial, percentage or other numerical terms) for example, costs (£/$/€) or time saved (hours/minutes).
Real option :  An option based on the right to buy/sell a tangible, rather than a financial, asset. Can be used to incorporate the value of flexibility and uncertainty into investment appraisal.
Real price :  Cash flows adjusted for general inflation.
Reference class forecasting :  A technique where forecasts of an initiative's duration, costs and benefits are derived from what actually occurred in a reference class of similar projects.
Responsible :  Used to describe the individual who has the authority and is expected to deliver a task or activity; responsibility can be delegated.
Revealed preference :  Determining 'willingness to pay' or 'willingness to accept' from observed behaviour. For example, the average house price next to an airport runway, compared with a similar house elsewhere.
Risk :  An uncertain event or set of events that, should it occur, will have an effect on the achievement of objectives. A risk is measured by a combination of the probability of a perceived threat or opportunity occurring and the magnitude of its impact on objectives.
Risk management :  The systematic application of principles, approach and processes to the tasks of identifying and assessing risks, and then planning and implementing risk responses.
Senior Responsible Owner (SRO) :  The single individual with overall responsibility for ensuring that a project or programme meets its objectives and delivers the projected benefits.
Sensitivity analysis :  A technique for testing the robustness of a calculation or model by assessing the impact of varying the input, to reflect the risk that the calculation or model might not be accurate.
Sponsor :  The main driving force behind a programme or project. Some organizations use the term Sponsor instead of SRO.
Stage/phase gate review :  Structured reviews of a project,programme or portfolio as part of formal governance arrangements carried out at key decision points in the lifecycle to ensure that the decision to invest as per agreed business cases and plans remains valid.
Stakeholder :  Any individual, group or organization that can affect, be affected by, or perceives itself to be affected by, an initiative (programme, project, activity, risk).
Standard deviation :  A measure of the distribution of values around the mean/average.
Start gate :  A stage/phase gate review which applies at the early stages of the policy-to-delivery lifecycle. It offers departments the opportunity to gain independent assurance on how well practical delivery issues are being addressed in preparing for implementation.
Strategic misrepresentation :  A term coined by Professor Bent Flyvbjerg to refer to the planned, systematic distortion or misstatement of costs and benefits to justify an investment.
Strategic objectives :  The measurable outcomes that demonstrate progress in relation to the organization's mission and to which the portfolio should contribute. According to Peter Drucker they fall into 8 types:
 Market standing: desired share of the present and new markets.
 Innovation: development of new goods and services, and of skills and methods required to supply them.
 Human resources: selection and development of employees.
 Financial resources: identification of the sources of capital and their use.
 Physical resources: equipment and facilities and their use,
 Productivity: efficient use of the resources relevant to the output.
 Social responsibility: awareness and responsiveness to the effects on the wider community of the stakeholders.
 Profit requirements: achievement of measurable financial well being and growth.
Strategy :  The approach or line to take, designed to achieve a long-term aim. Strategies can exist at different levels in an organization - in 'Managing Successful Programmes' there are corporate strategies for achieving objectives that will give rise to programmes. Programmes then develop strategies aligned with these corporate objectives against particular delivery areas.
Switching point or value :  The value of a variable at which point the decision to invest or not invest changes.
SWOT analysis :  Acronym for 'Strengths, Weaknesses, Opportunities and Threats'. A technique to determine favourable and unfavourable factors in relation to business change or current state.
Three-point estimating :  A technique whereby project estimates are prepared on three bases: best case scenario; worst case; and most likely.
To-be state :  The future planned state of an organization as described by the blueprint.
Tranche :  A programme management term describing a group of projects structured around distinct step changes in capability and benefit delivery.
Transformation :  A distinct change to the way an organization conducts all or part of its business.
Transition plan :  The schedule of activities to cover the 'transition' phase of the Benefits Realization Plan.
Value :  The benefits delivered in proportion to the resources put into acquiring them.
Value for Money (VfM) :  HM Treasury (2004) defines value for money as "the optimum combination of whole- of-life costs and quality".
Value Management Office :  A unit or function established to ensure that the organization optimizes the return from its accumulated investment in change.
Value Profile :  A representation of the relative importance of the primary value drivers to the client body and end users.
Weighted Average Cost of Capital (WACC) :  The average cost of capital (from equity and debt capital), weighted to reflect the proportion of each form of financing used. Used in determining the discount rate to apply to initiative cash flows.
Willingness to accept :  The amount that someone is willing to accept to give up a good or service. Estimated via revealed or stated preferences.
Willingness to pay :  The amount that someone is willing to pay to acquire a good or service without a market value. Estimated via revealed or stated preferences.