Selecting and evaluating a benefits management method for

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Selecting and evaluating a benefits management method for

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Selecting and evaluating a benefits management method for IT projects
Master thesis Business Information Technology
UNRESTRICTED
Important: This version of this thesis is unrestricted and does not contain confidential information. The complete thesis is confidential and therefore not available to the public.

Enschede, February 25th 2011

Author Kelvin Divendal [email protected]

Graduation committee

Christiaan Katsma University of Twente

Silja Eckartz

University of Twente

Matthieu Bijnagte Heineken

Abstract
Whenever large resources will be used in a project, most organizations develop a business case to justify the required investments. The investments are justified by estimated future benefits resulting from the project. However, only 30% of IT projects delivers the expected benefits.
Heineken Netherlands wants to manage its IT-related projects using the expected benefits as guidance, and review progress during the project and following its completion. The goals of the IT department are to increase the amount of realized benefits and to make the added value of the department more explicit. Benefits management is the approach to identify, plan and manage the delivery of benefits. Several benefits management methods have been developed in research and practice, but it is unknown which one is best suited for Heineken. Therefore, the goal of this study is to find the best benefits management approach for Heineken and to learn from its execution in practice.
The best benefits management method for Heineken is selected from seventeen methods found in a systematic literature search. Based on criteria from interviews at Heineken and criteria from a case study at Philips, the Cranfield method is selected. The method is subsequently evaluated in two pilot projects, resulting in the following findings:
 Full benefits management for must do projects (legal, fiscal or technical) is not feasible, but taking a moment to identify potential additional benefits is still very useful.
 A workshop facilitator should make sure that all participants have a good and shared understanding of the definitions used.
 In contrary to results from the Philips case study, the pilot participants want to assess benefits realization during project execution. They value the benefit ‘thinking’ process.
 The Benefit Dependency Network helps people who created it with reasoning about a project in other meetings. It provides a better overview than benefit templates.
 Individual benefits are useful to guide project execution, not to evaluate project success. Project success should be evaluated using the combination of all benefits in a project.
Following the evaluation of the Cranfield method, a deployment plan for benefits management in IT projects at Heineken is developed. The deployment plan contains one-time activities for adopting benefits management and recurring activities for using benefits management. The lessons learned from the evaluation and from feedback of Heineken stakeholders are included in the deployment plan.
The plan is approved by the IT department’s management team and will be included in the department’s strategy for the coming years. Due to the active involvement in the organization, this study has also paved the way for adopting benefits management. Only a few small steps have to be taken to include it in HNL’s current practice.

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Preface
Executing your graduation project at a beer brewery; it must be every student’s dream!
Perhaps most students from Enschede would dream of an internship at Grolsch, the local pride. But I was very happy to get the opportunity to graduate at one of the world’s largest brewers; Heineken. After experiencing the company and its brands at the Heineken Business Course, arrangements for my graduation internship at the IT department were quickly made. Looking back at the last six months, I can confidently say that it was a great learning experience and an incredibly inspiring time. Six months of hard work has resulted in this thesis and a benefits management approach for Heineken, ready for use.
During the graduation project I was supported by a lot of people, who I hereby want to thank for their great help. I wish to thank Christiaan and Silja, my university supervisors, for their enthusiasm, valuable ideas, sharp remarks and their invested time to read the growing amount of pages in this thesis. I would like to thank Matthieu, my company supervisor, for his close involvement in my assignment, the valuable brainstorming sessions, his candid feedback and the friendly collaboration. Many other people at Heineken were directly involved in the process of my research; as pleasant colleagues and sometimes also as workshop participants or interviewees. I wish to thank all of them for the good times and the nice cooperation. Apart from the people directly involved, I would like to thank Aniek and my friends and family for their support and encouragement.
Have fun reading,
Kelvin Utrecht, February 2011

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Table of contents
Abstract .......................................................................................................................................................... iii Preface ............................................................................................................................................................. v List of tables ................................................................................................................................................... ix List of figures ................................................................................................................................................. xi List of abbreviations .................................................................................................................................... xiii 1 Introduction ............................................................................................................................................. 1
1.1 Background ...................................................................................................................................... 1 1.2 Research setting ............................................................................................................................... 1
1.2.1 Project management at IT HNL ............................................................................................. 2 1.2.2 Project portfolio management at IT HNL ..............................................................................3 1.2.3 Benefits management at IT HNL ........................................................................................... 4 1.3 Problem statement ......................................................................................................................... 5 1.4 Structure of the thesis .................................................................................................................... 5 2 Research approach.................................................................................................................................. 7 2.1 Research questions ......................................................................................................................... 7 2.2 Research method ............................................................................................................................ 7 2.2.1 Literature study ....................................................................................................................... 8 2.2.2 Unstructured interviews......................................................................................................... 8 2.2.3 Exploratory case study ............................................................................................................ 8 2.2.4 Exclusion criteria and multi-criteria analysis ....................................................................... 9 2.2.5 Participatory action research ................................................................................................. 9 2.3 Deliverables .................................................................................................................................... 10 3 Theoretical background ......................................................................................................................... 11 3.1 Business case ................................................................................................................................... 11 3.2 Business benefits.............................................................................................................................11 3.3 Benefits management .................................................................................................................... 12 3.4 Benefits management methods .................................................................................................... 13 3.4.1 Validated methods developed in research ........................................................................... 14 3.4.2 Unvalidated methods developed in research....................................................................... 17 3.4.3 Methods developed in practice ............................................................................................. 18 3.4.4 Comparison of methods ....................................................................................................... 20 4 Benefits management method selection..............................................................................................23 4.1 Definition of criteria ......................................................................................................................23 4.1.1 HNL interviews ......................................................................................................................23 4.1.2 Philips case study .................................................................................................................. 26 4.2 Method selection .......................................................................................................................... 28 4.2.1 Shortlist selection with exclusion criteria ........................................................................... 28 4.2.2 Final selection with multi-criteria analysis ......................................................................... 30 4.3 A further elaboration of the Cranfield method ...........................................................................32 4.3.1 History and foundation .........................................................................................................32 4.3.2 Optimization of the method .................................................................................................33 4.3.3 The optimized Cranfield benefits management process ....................................................33

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Table of contents
5 Benefits management evaluation in pilot projects.............................................................................. 41 5.1 Selection and description of two pilot projects ........................................................................... 41 5.1.1 Excise Movement and Control System project .................................................................... 41 5.1.2 Heineken Digital project ...................................................................................................... 42 5.2 Evaluation in pilot projects .......................................................................................................... 42 5.2.1 Excise Movement and Control System pilot evaluation .................................................... 43 5.2.2 Heineken Digital pilot evaluation........................................................................................ 44 5.2.3 Evaluation of Cranfield method optimization .................................................................... 45 5.2.4 Questionnaire results ........................................................................................................... 47 5.3 Pilot evaluation findings and lessons learned ............................................................................ 48
6 Heineken benefits management plan ................................................................................................. 49 6.1 Adopting benefits management .................................................................................................. 49 6.1.1 Setting the stage: Value Management Maturity ................................................................. 50 6.1.2 Ensuring business involvement ........................................................................................... 50 6.1.3 Roadmap for deployment ...................................................................................................... 51 6.2 Using benefits management .........................................................................................................53 6.2.1 Project management..............................................................................................................53 6.2.2 Portfolio management ...........................................................................................................57
7 Final remarks ......................................................................................................................................... 61 7.1 Conclusion...................................................................................................................................... 61 7.2 Contributions ................................................................................................................................ 62 7.2.1 Contributions for research ................................................................................................... 62 7.2.2 Contributions for practice .................................................................................................... 63 7.3 Research validity ........................................................................................................................... 63 7.3.1 Internal validity ..................................................................................................................... 63 7.3.2 External validity .................................................................................................................... 64 7.4 Limitations and further research ................................................................................................. 65
References ..................................................................................................................................................... 67 Appendix A Interviews in Philips case study ............................................................................................ 71 Appendix B Presentation slides for final method selection.....................................................................73 Appendix C Outcomes analytic hierarchy process.................................................................................. 79 Appendix D Value Management Maturity ............................................................................................... 85 Appendix E Benefits management questionnaire ................................................................................... 87 Appendix F EMCS pilot results................................................................................................................. 89 Appendix G Heineken Digital pilot results ............................................................................................... 91 Appendix H Presentation slides for benefits workshop .......................................................................... 93 Appendix I CO2 measurement information............................................................................................101
viii Selecting and evaluating a benefits management method for IT projects
HeinekenBenefits Management MethodBenefitsBenefits ManagementProject