Benefits Realization An emerging trend in PPM

13 October

If you’ve been in the project management arena for a while you have gone through the project life cycle of completing a project; on time and within budget, obtained client sign off on the deliverables, completed lessons learned and moved on to your next assignment. Rarely if ever has anyone asked if the benefits were realized.

Or you may have delivered a “successful” project, only to find out later that the product or service was never used or implemented. Companies spend a lot of money and time on projects that get implemented but do not return the value that was expected- not because the deliverable isn’t good quality but because there is not the time, energy or enthusiasm to ensure it gets adopted and embedded in the organization. Often it is because the next big, more exciting, project has come along to distract us and people are just glad the project that just ended is finally over. But is it really over and if it’s not really completed what can you as a program or project manager do about it. Introducing a benefits realization process to your internal or external clients could be the answer.

An emerging trend in portfolio project management is the process known as benefits realization. Effective portfolio project management enables organizations to know what benefits to expect from a project and to track the realization of those benefits as the project progresses and/or after the project is completed. Last month I stated that a well defined business case outlines the expected benefits (tangible and intangible) with time phased projections for realization and is really the starting point of the benefits realization process.

Think about it. A project is completed and is the assumption the benefits of the project will just drop to the bottom line? Benefits don’t just materialize automatically. Realizing benefits in practice is dependent on deliberate management action. After all you have created a future ‘desired’ state to improve the organization’s performance through increased revenue or sales or cost and time efficiency savings. So who is making sure that staff is trained to use the new system and reengineered processes to exploit its capabilities to save time and money? Who owns making sure resources are redeployed to reduce fixed costs or sales have generated the expected revenues?

As a project manager you have a responsibility to help your customers gain the benefits detailed in the business case. One way you can help your client gain benefits is to initiate discussions on establishing a benefits realization process that answers the question; Who owns making sure the benefits are realized? The process should be very clear about hand off responsibilities for on going operations in the changed environment where the benefits will actually be realized.

Depending on the type of project benefits realization can be an additional phase once a project is completed or it can run concurrently as part of a project designed to deliver interim benefits. In either case when planning for realizing benefits for your project you must start with the end in mind, know what business outcomes are expected and then work backwards to plan to achieve those outcomes.

Opinions seem to be divided as to whether managing the process of benefits realization is the domain of the project manager. From my perspective the project manager is accountable for turning project inputs (concept, materials, budget, resources and work effort) into the project’s outputs. The project manager is responsible for producing the project outputs, however, they have no authority or control over how those outputs are used once handed over to the business.

It should be the business owner(s) who should be accountable for transforming the project’s outputs (new process, system, product, service) into expected organizational outcomes. The business owner is defined as the manager of that part of the organization that will operationally use the project’s outputs to achieve the expected business outcomes.

The benefits realization plan for a project should be written by the business owner, perhaps with assistance from the project manager, and approved by the Steering Committee and/or Project Sponsor. In addition to specifying accountabilities, the plan should detail the timeframe for achieving the benefits and how they will be realized and measured. The important point here is that the project’s scope will define what the project manager is responsible for delivering and what the business owner is responsible for achieving.

The following are some conditions that are necessary for effective implementation of a benefits realization process:

Accountability – Accountability must be assigned in a proactive mode to clearly identify business owners of the project that must produce the expected benefits upon project completion.

Measurement – Measurement systems or processes must developed or revised to measure the expected benefits outlined in the business case and give the people who are accountable the information they need to make decisions and act upon them to achieve the benefits.

Proactive Change Management – Change management methods must be applied effectively to introduce the benefits mindset and to support all phases of project life cycle governance. People need to think, manage and lead differently to transition to a project life cycle that reaches from ‘concept to cash’ rather than from ‘design to delivery.’

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