Benefit realization usually becomes another add-on process that usually gets neglected and before it can achieve its full potential it will fail at least in most examples i have seen. What do you think are the various issues concerning the adoption of benefit realization process that you have dealt with and how have (or can) you overcome those
Benefit realization = post project completion process Saving Changes...
Business Benefits, as long as they hang high like in dreams they're mostly unattainable. Instead it's fair enough firmly standing on our toes and design the BBR strategies. Yes, it's the a)Ownership b) commitment and c) unbiased data that make sense.
Ramesh, I believe the benefit are defined clearly because to select the right project, one should have a sound strategy which is then linked with the organizational strategy. The business case should be sound enough so as to analyze and select the project. what I was mentioning was the postmortem part and how does it feedback into the selection aspect. This is where I lack some content or have questions.
But I do agree with Stephan and you on the topic of ownership, commitment... Saving Changes...
Ramesh ChalamalasettiPMI ATP Instructor – PMP®| PMI Certified Instructor - PMP Exam Prep®Hyderabad, Andhra Pradesh, India
Well, Kiran appreciate your feed back. Yes, I very much caught the cream of your question - Post mortem BBR. I would like to add yet one more analogy - "CHANGE" Typically our BBR strategies leverage status quo business environment live at the time of strategy designing. What if something changes enroute? What if the project is back seated for pretty many reasons usually beyond the control of PM or PgM? I firmly believe "Change is the ONLY Constant" in this evolving world. Waterfalls stay Oasis. Hence, when strategy architects afford to allot some kind of redundancy in their thought processes, then I think we can better our outlooks. This way, Accommodate & Commensurate be the manthra to see our hypes live. Saving Changes...
Sergio Luis ConteHelping to create solutions for everyone| Worldwide based OrganizationsBuenos Aires, Argentina
Beside to read the sources I mentioned, you have to take into account that benefits will be clearly stated before the project is started inside the business case or some other type of deliverable and you have to take into account that benefits will be achieved by the product/service/result created by the project. As some tools to do that you will find the Boston BCG matrix, the Organization Maturity Matrix (with relates amount of sales with organization time life), etc. Saving Changes...
Stephen DellConsultantBurlington, Nc, United States
Yes, this is why benefits realization can be so challenging. How can you measure the business value delivered if it's not expressed in measurable terms? The project was approved and funded for some value proposition - expense reduction, efficiency gains, revenue increase, customer satisfaction, cost or risk avoidance, compliance, etc. If these aren't articulated in measurable ways at the project proposal stage, you'll have a hard time measuring if its really been successful in delivering the business value. Really helps to have a project ranking model aligned with the organization strategies and goals as well as a cost/benefit template which demands that the benefits are examined with rigor. Saving Changes...
At program level, benefits are to be identified in measureable terms as outcome of the program and this should be linked to the outputs of the project as roadmap. Benefit register should lists the KPIs, milestones, etc. Benefit realization plan should elaborate how the outcome will be achieved from product/service/result of the project.
as you have referred to "achieving full potential", this depends on how the program outcome is accomplished, whether incremental or in one step. Anyway, benefit transition plan and benefit sustainment plan should elaborate on such issues by planning for developing the capability i.e. hiring the right personnel, providing training and ensuring smooth transition will facilitate such events. This should be backed with metrics and values should be agreed with the sponsor/key stakeholders/user department.
Such activities will ensure ownership is identified and metrics are measured and demonstrated with performance run or test run Saving Changes...
So my experience on key BR challenges:
- Benefits definitions - focused on $s instead of business KPIs, trying to get the right IRR to get the investment approved instead of being realistic, not capturing KPI baselines and expected evolution (change without the project impact)
- Change mgmt - project decisions made without assessing the business case impact, project team disconnected from business case, projects deliver "solution" without the "capability" to use the solution and achieve the benefits
- Benefits tracking - project team long gone by the time actual benefits can be measured, lack of ongoing project-independent tracking process, complexity of multiple projects and changes impacting the same KPIs, making it hard to isolate project impact (esp. after several years)
How to address these?
- C-level support to establish a project-independent investment governance process, that looks at the portfolio level (vs project) and reports both back (project that went live 1-2 years ago) and forth (projectsplanned to go live in 1-2 years)
- Exec compensation tied to project benefits achieved vs project golive on time
- Dedicated function to drive value mgmt / benefits realization best practices on a project level Saving Changes...
Stéphane ParentSelf Employed / Semi-retired| Leader MakerPrince Edward Island, Canada
My thought is that benefit realization should be the responsibility of either the project management office or the programme office. Saving Changes...
Stephen DellConsultantBurlington, Nc, United States
From an administrative standpoint, perhaps the PMO is in the best position to track and report on benefits, along with Finance and Data Analytics assistance, but the project sponsor needs to be held accountable for achieving the benefits tied to the project. I like what Arpad has said above about tying performance to value delivery, although one could argue that if an Investment Decision Board or some such entity exists and approved the project, then they bought into the benefits calculation as well and should share responsibility. I think the main point here is that the project management efforts and people focus on delivering the project within the time, cost and quality constraints. We can be successful in that and the project still seen as a failure to deliver the intended value.
...
1 reply by Stéphane Parent
Jan 07, 2016 2:18 PM
Stéphane Parent
...
Agreed, Stephen.
The accountability definitely rests with the project sponsor. The responsibility is usually delegated.
The project can be successfully managed without its product realizing business benefits.
Saving Changes...
Stéphane ParentSelf Employed / Semi-retired| Leader MakerPrince Edward Island, Canada
Jan 07, 2016 2:07 PM
Replying to Stephen Dell
...
From an administrative standpoint, perhaps the PMO is in the best position to track and report on benefits, along with Finance and Data Analytics assistance, but the project sponsor needs to be held accountable for achieving the benefits tied to the project. I like what Arpad has said above about tying performance to value delivery, although one could argue that if an Investment Decision Board or some such entity exists and approved the project, then they bought into the benefits calculation as well and should share responsibility. I think the main point here is that the project management efforts and people focus on delivering the project within the time, cost and quality constraints. We can be successful in that and the project still seen as a failure to deliver the intended value.
Agreed, Stephen.
The accountability definitely rests with the project sponsor. The responsibility is usually delegated.
The project can be successfully managed without its product realizing business benefits. Saving Changes...
Stephane - I can hardly imagine holding the PMO accountable for e.g. reducing the inventory or increasing business revenue...
At best the PMO can facilitate the benefits governance process - but even there it is the business leadership team accountable for any decisions and adjustments over benefits realization (same way as in portfolio mgmt the PMO will not approve or reject any project, just facilitates the process itself) Saving Changes...
