Benefits classification to enhance project value creation

Abstract

Projects create greater value when they realize their expected benefits. However, project benefits are often not fully realized, partly because managers find benefits an unclear concept that is difficult to identify, measure, and manage. As a result, various project benefits classification frameworks have been proposed to support managers from the project owner organization in setting the expected benefits before project commencement, managing the project, and evaluating benefits realization following project completion. However, the few existing frameworks include inconsistent, incomplete, and overlapping benefits groups. The objective of this paper is to develop a comprehensive project benefits classification framework to clarify the diverse benefits types and support their management. In an exploratory study, 30 interviews were conducted with senior executives, and in a second study, 173 real-life project benefits were analyzed. Findings from these two empirical studies suggest that project benefits can be classified into 10 groups based on their ultimate beneficiary (the final level of the beneficiary hierarchy): the project owner organization itself or the general public. More specifically, these benefits groups include seven groups of organizational benefits (revenue generation, cost savings, productivity enhancement, quality improvement, risk reduction, compliance, and learning) and three groups of public benefits (economic, social, and environmental). This classification enhances the setting, management, and evaluation of project benefits and advances our understanding of project value creation.