Defining Benefits: Forced Extraction
From the Benefits Realization Blog
by Dave Davis
This blog will look at the practice of benefits realization and how it applies to both Program Management and the overall Portfolio, Program, Project Methodology (as well as Business Analysis and Organizational Change Management)
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Defining Benefits: Forced Extraction
The benefits definition, qualification, and quantification process can be somewhat confusing to many people. Defining a benefit can be tricky and misinterpreted, especially by upper management. There may be some members of the team who look at all results as a function of benefit realization, while the true definition of Benefits Realization rests in organic improvements as a result of change. One item that causes confusion is called a force extraction.
A forced extraction is when a company forces financial results on an organization. For example the budget for a department is cut by 10%.
While that forced extraction may provide economic results to the company, it is not considered a Program Benefit.
Program Benefits are identified as a result of the outcomes of the components.
It is important that benefits are identified as a result of the outcomes of the components and not as a direct result of a business allocation of resources. While a factor in the overall program may be a budget reduction, it should not be tracked as a program benefits because it is not a result of the outcomes delivered by program components.
Posted on: September 29, 2014 01:19 PM |
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Comments (5)
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Drew Craig
Sr. Agile & Product Coach| Vanguard
Philadelphia, Pa, United States
Thank you, David. Food for thought. In the end, aren't the benefits based on the final product, service, or result as identified by the Business and as the Business justification and expected value?
Dave Davis
Senior Project Manager| Cincinnati Children's Hospital
Springboro, Oh., United States
Thanks for the comment Andrew. The theory is that Benefits Identification involves more than the final product. There can be intermediate benefits or various non-tangible (or soft benefits). But on the whole I agree with your statement with one caveat. Benefits are based on the adoption of the business justification and expected value.
Drew Craig
Sr. Agile & Product Coach| Vanguard
Philadelphia, Pa, United States
"There can be intermediate benefits or various non-tangible (or soft benefits)." - That is very interesting. I'd like to learn more around this.
" Benefits are based on the adoption of the business justification and expected value." - Yes, that is very true. There are times when a shift may take place, especially for longer projects, when technology or strategy changes.
Mansoor Mustafa
Senior PM| Government Department
Rawalpindi Punjab, Pakistan
Mansoor Mustafa
Senior PM| Government Department
Rawalpindi Punjab, Pakistan
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