Project Benefits Overview

Project Benefits

• A project benefit is an outcome of the project, perceived as a positive change by one or more stakeholders.
• Benefits must be achievable and approved by key stakeholders.
• Project benefits are not deliverables. Deliverables are the means to achieve benefits (e.g., a computer system is a deliverable, not a benefit).
• Deliverables are final outputs transferred to a third party (customer, beneficiary, or performing organisation).
• Project deliverables cannot be used to measure the benefits they generate.
• Benefits are the impact of deploying or using deliverables.

Real and Pecuniary Benefits

• Real benefits are defined by final consumers of the project, reflecting an addition to community welfare (measured as consumer or producer surplus).
• Pecuniary benefits and costs result from the economic adjustment to the project (e.g., road construction impacting land prices).
• Over time, pecuniary benefits and costs will offset each other, so they are not included in benefit-cost analysis (BCA).

Types of Benefits (Intermediate & Final, Inside & Outside)

• Intermediate benefits are used in the production of other goods (e.g., electricity from a dam).
• Final benefits are those directly used by consumers.
• Inside benefits are confined to the benefiting region; outside benefits extend beyond the region (e.g., flood control benefits).

Types of Benefits (Direct & Indirect, Tangible & Intangible)

• Direct benefits are closely related to project objectives.
• Indirect benefits are linked to project byproducts.
• Tangible benefits have market value.
• Intangible benefits cannot be valued in the market (e.g., social goods, social costs).

Examples of Project Benefits

• Revenue
• Cost
• Efficiency
• Productivity
• Risk
• Reputation and compliance
• Sustainability
• Service quality
• Product quality
• Organisational culture
• Knowledge
• Quality of life

Project Lifecycle

• Initiation: The first phase, where the opportunity and reason for a project are identified, and a project is developed to take advantage of it. Define objectives, scope, purpose, and deliverables.
• Planning: The planning phase guides execution. Key outputs include scope statement, work breakdown structure (WBS), project schedule (Gantt chart), and a risk register.
• Execution: This is the most time-consuming and resource-intensive phase, focusing on deliverables (products, services, results).
• Monitoring and Control: Measuring progress towards objectives, monitoring deviations from the plan, and taking corrective action. This affects all project phases.
• Closure: Gaining stakeholder and customer acceptance of final products/services, even if projects are not completed. Creates project archives/lessons learned, reports, and presentations to management.

This quiz covers the concept of project benefits and distinguishes between deliverables and benefits. It also explores the differences between real and pecuniary benefits in project evaluation. Test your understanding of how benefits impact stakeholders and community welfare.