Objectives? and Benefits? Separate questions on a Business Case form I need to fill in

Question

These seem similar questions.

I guess Objectives are as in SMART and tangible.

Benefits less tangible and broader?

Can anyone please explain the difference and perhaps include examples to illustrate?

Thanks!

Answer 1

Benefits can also be objective and measurable, ie, SMART.

I look at the difference between the two from a business case perspective is that the objective is your independent variable and benefit is the dependent variable. You perform the work to achieve the objectives and then those objectives will influence achieving the benefits at some time in the future.

Answer 2

Objective should be strategic; benefits need to be in dollars

Welcome to pm.stackexchange!

perhaps include examples to illustrate

For example, your objective can be:

• Become the market leader from the current second place
• Become the lowest cost producer in your market segment from the current mid-level
• Improve customer satisfaction ranking to the second place from the current fourth place

You can make these SMART (Specific, Measurable, Achievable, Relevant and Time-bound) by saying "as measured by specific industry analyst..." and so on.

For example, your benefits can be:

• By taking market leadership, I will be better placed to win larger orders. I will not only gain x% revenue but also improve average size of the order and hence improve margin by y%.
• By improving customer satisfaction I can reduce customer attrition by z% and so save on new customer acquistion and onboarding costs.

These benefits will form the basis of the returns on your dollar investment for your ROI (Return on Investment) calculation.

Answer 3

In a business case, you outline a proposed project or program.

This proposed project or program is to fill a need in your organisation that is often identified by a gap analysis. More simply - this is what we have, this is what we need, the gap is the difference between these and the project or program will diminish the gap.

Your objective is to diminish the gap.

Your benefits are the tangible (quantitative) and intangible (qualitative) changes to your organisation and/or the people it serves.

In a business case, benefits are often valued against the financial cost of your proposed project or program in a cost benefit analysis. There are many other terms for the same process but essentially you attempt to monetise financial, economic, social, environmental benefits and demonstrate how achieving your objective will change these elements, usually (but not always) for the better. Tangible benefits are a lot easier to demonstrate. More effort and creative thinking must usually be applied to demonstrate intangible benefits.

I’d always recommend that you present at least three options...

1. Do nothing;
2. Do something;
3. Do everything.

Option 1 project or program usually costs nothing to implement, but the future cost to your organisation or the people it serves can be high and measured by lost business or lost opportunity.

Option 3 project or program usually costs too much to implement and the benefits do not justify the cost.

Option 2 project or program is the “sweet spot”, where the benefits outway the cost.