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Managing Investment Benefits

When the Government invests, it commits resources now so that it can realise benefits in the future.

Benefits go beyond the physical assets or services that investment projects deliver: they are the reason for investing, the “measurable gain from an investment which is perceived to be advantageous by a stakeholder”[11]. This includes everything from more efficient and effective public services, to greater social cohesion in New Zealand.

What is benefits management?

The process of managing benefits is defined as the practice of identification, analysis, planning, realisation and reporting of benefits.

To ensure the benefits of an investment are realised, good benefits management is essential throughout the life of an investment. This starts with developing a benefits realisation plan as part of the Business Case, and continues with managing projects well to ensure benefits are on-track. Managing benefits continues after an investment project is complete and in operation.

International benchmarks show that benefits management is an area of low maturity,[12] and this includes the New Zealand state sector. The tranche one ICR results showed an average Portfolio, Programme, and Project Management Maturity Model (P3M3) benefits management maturity score of only 1.7 out of 5, and only 54% of benefits being delivered. We also have very limited data on the benefits performance of the government investment portfolio.

Improving benefits management

This year the Corporate Centre has worked with agencies to develop a range of initiatives to improve management of benefits across the state sector.

The Investor Confidence Rating

The ICR assesses both benefits management capability and benefits performance of the investment-intensive agencies. The Corporate Centre is using this information to identify areas of weakness, and provide feedback and support to agencies to help them improve.

Improving our guidance

In April 2016, the Treasury released updated benefits guidance, developed with the GCIO and a number of agencies. This is supported by a set of templates and examples for government agencies (and any organisation) to implement or improve benefits management for their investment projects.

Getting better data

The Corporate Centre is focusing on collecting more comprehensive data on the performance of benefits from the investment portfolio, to enable better performance analysis and transparency.[13] It is expected that this report will next year include benefits data for major investment projects, and the following year for all significant investments.

Community of interest

In 2015 a community of interest for benefits management was established put by the Treasury and GCIO, which has grown to almost 180 members. The group meets every six weeks to connect, discuss trends and listen to speakers from the public and private sectors, including engagements with international benefits management experts.

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