The 2015 PMI Pulse of the profession continues to stress that mature benefits management practices distinguish high performing organizations from less successful ones.  Besides obtaining higher success rate at meeting project objectives, organizations with mature Benefits Realization maturity have better on-time and on-budget results.  The text below is extracted from PMI’s annual Pulse of the Profession.

Benefits realization illustrates—and measures—precisely how projects and programs add true value to the enterprise. Organizations that implement benefits realization programs understand this value, because they are capturing the hard facts needed to showcase the return on their project management investments.

But far too few organizations have effective benefits realization programs in place—in fact, many have no program at all—so they are missing an opportunity to understand what would help them increase the rate of project success. We need to continue studying the challenges of benefits realization to gain insight into ways organizations can meet those challenges.

Our 2015 Pulse research indicates that only one in five organizations reports having a high level of benefits realization maturity. While low, this still represents an increase of 63 percent since 2013, indicating a high level of interest in this topic, even while organizations struggle to become adept at it. High performers are over four times more likely to report high benefits realization maturity (39 percent compared to 9 percent of low performers), because they recognize it as a business imperative.

In addition, organizations that report high benefits-realization maturity have significantly better project outcomes, as noted in the chart. Benefits realization is challenging, but when executed well, it helps ensure that the outcome of a project produces the desired benefits, as projected in the business case. This is achieved by establishing, measuring, and communicating the results of an organization’s initiatives. Such insight into performance is also an essential planning tool for future projects and resource allocation, including talent.

“What we are realizing now is your performance in the job today is what is actually going to dictate work that you get tomorrow,” said Mark Childers, PMI-ACP, PMP, Project Manager III, DOD & State, FLUOR Government Group.

While we have seen a significant increase in the number of organizations that are highly mature with this competency, we still see a lower-than-ideal percentage of organizations investing in benefits realization, considering the return.

Organizations with mature benefits realization processes can benefit from:

•        Clearly identifying the strategic rewards prior to starting a project

•        Effectively assessing and monitoring risks to project success

•        Proactively planning for making necessary changes in the organization

•        Explicitly defining accountability for project success

•        Routinely extending responsibility for integration to the project team

A combination of Organizational Agility and compliance to mature Benefits Realization Practices will help an organization achieve superior results andtranslate into a competitive advantage.

Benefit Realization and Analytics

One of the most compelling reasons for benefit realization the ability for the program manager to report back to the business that the investment value is being realized. In order to perform this task properly the program manager is going to apply many of the principles of analytics. This blog wants to give high-level definition of analytics and how they will apply to program management and benefits realization.

As the image shows analytics have a couple major components to them that are right in line with the entire benefits realization concept. First analytics is a higher-level of looking at your data and communicating results visually as well as tactically. Analytics is looking at patterns in the data, it may be trends in maybe cause-and-effect it may be direct or indirect relationships. So the first step is understanding the data in the enablers to create. Second analytics relies on statistical disciplines, this includes using tools to extract data in the appropriate research in business intelligence in order to quantify the performance of that data.  Finally analytics does favorite data visualization to communicate the inside of the knowledge that has been obtained by the program manager that is reporting the actual results of the benefits realization.

In some ways the use of analytics expands the role of the program manager into a couple different areas both the delivery of the solution as well is running of the business. Analytics falls mainly under a business analysis skill set, and PMI now has a certification in business analysis, as well as performance analysis of the different components with in the program itself.  The program manager will need to be able to look at production data and be able to identify the patterns and communicate those and how they relate to the program itself. Analytics will require the current state the future state of the KPIs and how the benefits are going to be able to measure is associated KPIs. The other area that analytics will expand the program manager skill set is on analyzing a series of data points as opposed to just a snapshot in time traditionally project managers are able to give a readout of the current earned value, with respect to schedule and cost and project be earned value to completion. Analytics, as applied to the program, will also need to look at past performance and project future performance across multiple components and the people aspect of implementing these components.

What analytics will drive is a new means of communicating for the program manager. As mentioned in the definition above analytics resonate with the visual explanation. The program manager will be expected to provide that visual explanation interrelationship between expected results in actual results and the approach to close the gap is the variance is about tolerance level. This is not to be dependent on good data which will drive the program deliverables to ensure the proper hand also milestones are defined. It will also require the program manager to be able to map out the relationships between project results and business performance.

This is an exciting growth area for program managers and a great opportunity for a strategic project management office to be able to deliver more value to the business. This is another step in the journey to aligning the strategy of the company with the investment is being made. The program manager be looked at to be able to explain the journey and demonstrate where the organization is on that journey. And be able to do so in a visual data proven presentation that will transcend all components of the value chain.

I have a one hour chapter presentation or webinar on benefits management.  I have also developed and delivered workshops and prestation for many organizations including ProjectWord and PMI.

Introduction to Benefits Realization

Are we getting what we need?

At the 2015   PMI Annual Leadership Institute Meeting, PMI CEO Mark Langley told the audience that his single most frequent request from the Business Community was to have Portfolio/Program/Project Managers utilize Knowledge, Skills, and Abilities in Benefits Realization. This session will introduce the concept of Benefits Realization and how it is an important subset of Program and Project Management.  It will cover a definition of Benefits, a discussion on the currency of the benefits, and conclude with an interactive definition of a benefit in a Benefit Realization Plan.  Designed for practitioners at all levels, this will cover an in-demand skill for PPPM professionals in the 2010’s and beyond.

Complimenting Benefits Workshops, this presentation is an opportunity for you to better understand the relationships between Benefits Realization and Corporate strategy and establish yourself a Project Manager “who can do it!”.  It is an energized, pragmatic presentation, with many real-life examples, humorous anecdotes, and proven methods to the map between project objectives and corporate strategy.  It also includes time  for Q&A where you will learn:

• What are  benefits and dis-benefits and what are some of the human bias that make it a difficult process for most organizations?
• The purpose of a Benefits Map and how defining the Project Benefits can transcend the project completion through a transition to operations.
• The role of the project manager and the project outcomes and how they interact with Benefits Realization.

A project must be designed to provide benefits back to organization.  Whether they are revenue centered benefits to reduce cost or maximize revenue, or cost effective benefits forced by external mandates, there is a reason the company is making the investment.  This presentation helps to bridge the gap between the strategy and implementation and how the project manager fits into the picture.

The presenter, Dave Davis, PMP & PgMP is a practitioner of PPPM and a recognized professional in helping organizations. He has 30+ years as a manager (business, project, program, & knowledge), business analyst, curriculum advisor, instructor, and course developer. His PMI roles include Chapter President, Standards committees, and certification question writing. He is currently on the PMI COP Advisory Group. Dave holds 3 master’s degrees including an MBA from Xavier University, and eBusiness Project Management Certificate from the University of British Columbia.  He has published many articles and delivered presentations at professional conferences throughout Europe and North America.  Dave has developed and delivered advanced training for many universities and private companies.  Besides the Project Management certifications, Dave is certified as a Professional Business Analyst, Benefits Management, and Mindjet Mind mapping.  He also holds a Master’s in Business Administration, the PMI Leadership Masters Certificate and is a Six Sigma Green Belt.

This meeting is your opportunity to strengthen your Distinguished Project Manager toolbox!

This is a small video regarding how many organizations fund their programs for a year.  I am working on a new software package to start sharing knowledge via "whiteboard" snippets.

http://youtu.be/HiqO0EiivpI

We're All in This Together !!!

Dave

The Project Management Institute® (PMI) has defined a Benefits Realization model for a Program Manager to use to help the company capture the expectations of an investment.  The concept of the model is to provide a structure from the initial planning through to actual realization (or booking) of the benefits into a new Business As Usual change.  The five steps are loosely structures to be hierarchical in flow, but allows for a progressive elaboration approach as more information becomes available during program implementation.

Benefits Identification

This is the initial step of capturing the potential benefits that can be realized by the program.  This step is analogous to a brain storming session and will result in a canonical listing of potential benefits.  There are many sources for gathering this information including business documents, brainstorming sessions, extraction from a business plan, external factor analysis, organizational strategic objectives, and expert knowledge.  Many organizations will group the list into various categories to assist in analysis and eventual ownership.   The outcome of this step should be a list of potential benefits in a benefits register.

Benefits Analysis and Planning

This is the means of qualifying and quantifying benefits.  If the benefits Identification step produces a canonical list of benefits, then each benefit needs to pass a “test” to see if it truly qualifies as a benefit, or to help prioritize benefits.  The benefits register should contain the associated algorithms and business rules/logic required to define the value of the benefit.   The analysis will also include setting an expectation for the value of the benefit and a relationship of the benefits against sequence, time, and dependencies.  A significant portion of this step is to align company performance metrics (KPI) to be able to measure, demonstrate, the results of the implementation.  The end result of this step should be the Benefits Realization Plan (BRP) which formally documents the activities required for achieving the program’s planned objective.  Included in the Benefits Realization Plan is a program roadmap which documents the expected delivery of the value of the benefit against time.   The BRP will also define how the benefits will be transition to operations at the end of component deliver and the sustainability expectations.  The Benefits Realization Plan is a control document and needs to be baselined and managed under strict change control throughout the life of the program.

Benefits Delivery

This is the means of actually placing the changes into the business and the start of seeing the expected benefits in the business reporting infrastructure.  Since Programs will include multiple components, the delivery will be an iterative process and will span from the first project completion through to Program Closure.  Using the baselined BRP, the program resources will conduct monitor and control activities to analyze the results and prescribe corrective action.   Part of this prescriptive corrective action is to ensure the Benefits Register is aligned with the monitor and control activities.  The final litmus test of the benefit delivery is to ensure the results are properly accounted in the company Profit and Loss (P&L) applications (or  they are “booked”).

Benefits Transition

This is the means of recognizing the programs have defined ends and that benefits might be realized long past the closure of the program.  The Benefits Owner will eventually assign benefits realization to an operations function where it measures the benefits as part of a “Business As Usual” process.  This implies that monitor and control and associated prescriptive action is no longer the responsibility of the Program manager, but not the operations manager.

Another important aspect of the Benefits Transition is that operations team will often view a suite of benefits as one item.  For example there may be six benefits included in a project software enhancement, the operations team will most likely look at that as one enhancement.  Therefore, the benefits transition process, and associated artifacts, will consolidate coordinated benefits into the package to east transition.  The outcome of this phase will be the standardized reporting of benefits to associated benefit and business owners.

Benefits Sustainment

Finally, benefits need to be sustained over the lifecycle of the change initiative.  Many times the benefits will be forecasts over time, as defined in the benefits roadmap, and the time frames will expand past the life of the program.  After benefits are transitions, they need to be sustained.

Monitor and control and taking corrective action is a portion of the sustainment steps, but it can include much more.  It is possible that during the lifecycle of the change that previously unidentified benefits are realized, these “emergent” benefits should be documented and through the use of structured change control, incorporated into the benefits reporting models. 

Conclusion

The PMI Benefits realization model defines a structured set of phased to support the identification of, analysis of, monitoring and control of, the transition of, and the sustainment of benefits throughout the lifecycle of the change.  The model also encompasses the “care and feeding” of benefits after transition to operations and helps to validate the true return on investment to the organization.  Benefits Management needs to be incorporated into an organizations knitting and be considered in all aspects of the program.

Sources

Letavec, Craig J. Strategic Benefits Realization: Optimizing Value through Programs, Portfolios and Organizational Change Management. Plantation, Fl.: J. Ross, 2014. Print.

The Standard for Program Management. Vol. 3. Newtown Square, Pa: Project Management Institute, 2013.

We're All In This Together !!!

Dave