In order to understand this, let us first understand what is meant by the term “Benefits”.
Any organization’s portfolio is a collection of projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives.
Operations is concerned with the ongoing production of goods and/or services. Operations maintain the status quo. It brings the existing revenue of the organization. In order to grow – new products / services need to be launched, which necessitates undertaking of projects or programs in the organization.
A program** is a group of related projects, subsidiary programs, and program activities that are managed in a coordinated manner to obtain benefits not available from managing them individually. Projects may be undertaken as a standalone project or as a part of program or may be handled by the portfolio directly.
A project** is a temporary endeavour undertaken to create a unique product, service, or result. The output (either a service / product / improvement) doesn’t give the benefits to the organization unless it is sold / gets into operations. Projects deliver the outputs which build capabilities. These capabilities in turn transition into outcomes that serve the purpose of realizing benefits to the organization.
Benefits* are the measurable improvements from change, which is perceived as positive by one or more stakeholders, and which contributes to organizational (including strategic) objectives. Benefits can also be viewed as a measurable improvement from the current state to a future state that results in a significant advantage. The benefits may be accrued over a long span. ROI of the decision of undertaking the projects or programs is directly proportional to the benefits accrued from these outputs.
* Reference – “Managing Benefits” by Steve Jenner (An APMGTM Guide)
** Reference – Project Management Body of Knowledge (PMBOK® Guide)