For a Six Sigma expert, project benefits and process improvement hold great importance. Six Sigma methodologies play a vital role in process improvement and achieving project benefits. Six Sigma experts categorize project benefits into many types. Some of the project benefits are mentioned below:
Types of Benefits from Process Improvement
At the time of claiming for the hard benefits, either the revenue budget is raised or the expense budget is reduced by the organizational entity. This is because of the impact the project will have.
Soft benefits are a result of an organization’s strong belief that the benefits will be there, but these benefits may be uncertain to make amendments to their budget.
A few examples of soft benefit are Cost Avoidance and benefits that are subject to risk could be dealt with by making them soft benefits.
A sustainable benefit is expected/assumed to happen again in the foreseeable future. The benefit needs to be sustainable to ascertain that any amendments made to the budget as result of project benefits are permanent. Sustainability plays a significant role to make sure that the decrease in headcount budget is permanent and effective year on year.
One Time Benefit
One time benefit refers to a benefit which reduces cost or increases revenue simultaneously and is not expected to recur in the coming financial years.
Productivity benefit is among the most common benefits type experienced from projects. This benefit primarily comes from projects involving automating manual processes and/or streamlining excessively intricate processes. Productivity benefits are computed as a fall in the total count of effort-hours per hour/day/month needed to perform a task. Productivity could be categorized as a hard or a soft benefit on the basis of whether or not people are eliminated or overtime is reduced from the work force when implementing productivity initiatives.
A properly written Business case measures project success and process improvement imperatively. A good business case has the qualities like clear record of project benefits, people accountable for achieving those benefits and a process of governance process which helps in evaluating the business case regularly to check its relevance to the organization. It is important to evaluate project benefit before, during, and after completion.