PMI Announces 2016 Thought Leadership Series--Creating Lasting Value: Benefits Realization Management

Philadelphia

— Project Management Institute (PMI) today released its 2016 Thought Leadership Series--Creating Lasting Value: Benefits Realization Management. The series of reports, supported by The Economist Intelligence Unit (EIU) and The Boston Consulting Group (BCG) and launched at the annual PMO Symposium®, examines benefits realization management across all levels of the organization.

Collectively, the research demonstrates there is too much focus on metrics and too little on benefits. Metrics measure activities: a successful IT conversion, development of a new product or manufacturing process, or construction and staffing of a new facility. In contrast, benefits measure the value that is created as a result of the successful completion of a project — the market potential for the new product, cost efficiencies or improved customer satisfaction associated with a new IT system.

The year-long research endeavor identified three main challenges: (1) everyone is interested in benefits realization but few organizations are doing it well, (2) there is confusion within organizations about who is responsible for benefits identification, monitoring, and sustainment, and (3) there is no one path to benefits realization maturity that will work in every organization.

“Organizations are leaving their strategy to chance when they do not focus on benefits realization management as a central part of project and program management,” said PMI President and CEO Mark A. Langley. “This year’s Thought Leadership Series is designed to help ensure that expected benefits are realized and sustained once project implementation is completed.”

The 2016 Thought Leadership Series advances the conversation around benefits realization that began in the 2016 PMI Pulse of the Profession® in-depth reports with the following new volumes:

Strengthening Benefits Awareness in the C-Suite

Written by the Economist Intelligence Unit (EIU), this report examines how the practice of benefits realization management supports strategy implementation. Key findings include:

  • Interest in benefits realization management is growing, but few examples of maturity exist. Seventy percent of respondents say that increased use of benefits realization management is a “very” or “extremely high priority” at their organization; only 1 percent say they do not currently engage in any element of benefits realization management. However, the application of benefits realization management to general project implementation—let alone strategy—is only about a decade old and it lacks standardized best practices.
  • Relative maturity at benefits realization management yields substantial business benefits. The EIU compared responses from two subsets of the survey sample – those who say their organizations are very mature at benefits realization management and those who consider their companies immature. The very mature fare better at project completion and benefits delivery, have much closer alignment between strategy and project portfolios and enjoy better business outcomes. For example, 51 percent of mature respondents report well-above-average financial performance compared to 22 percent of immature organizations. These differences exist even though the mature companies have yet to fully embed benefits realization management in strategy implementation processes.
  • Barriers to effective benefits realization management vary. For the immature, attitude is a problem; for more mature organizations, the primary challenge is identifying a best practice approach in a poorly defined discipline. Immature organizations do not seem particularly interested in the practice and are more likely to report cultural resistance. For example, only 6 percent say increased focus on benefits is a high priority compared with 50 percent of mature organizations. For the mature, the barriers are more practical. Issues that are particularly challenging are measurement of benefits, especially intangible ones; a lack of skills; and where to assign accountability for benefits realization.

Establishing Benefits Ownership and Accountability

This report examines the specific roles and responsibilities of benefits realization management. It finds organizations that are highly mature in their benefits realization management practices do the following:

  • Create a value-driven culture. A benefits realization-driven culture, part of an organizational-wide culture of alignment, is key to effective decision making. Mature organizations create a value-driven culture by effectively aligning expected business benefits with strategic goals (95 percent); developing a formal process for identifying, maintaining and sustaining business benefits from projects (92 percent); effectively capturing and leveraging lessons learned to make improvements in benefits realization (95 percent); and cultivating high levels of organizational transparency around the achievement of benefits (97 percent).
  • Establish clear accountability and responsibility. Because benefits realization management can influence project and strategic success, it’s important for organizations to establish ownership for benefits measurement. Those responsible for benefits realization management maintain this focus and confirm benefits are identified, executed, and sustained – essentially ensuring whatever a program or project investment produces continues to create value, as per the business case. Ninety-four percent of mature organizations formally identify person(s) accountable for achieving business benefits versus 19 percent with low maturity.

Connecting Business Strategy and Project Management

This report, developed in collaboration with The Boston Consulting Group (BCG), outlines ways to improve the maturity of benefits realization management processes by focusing on the following priorities:

  • Managing the portfolio of projects based on real strategic outcomes – and, specifically, value creation for the organization.
  • Encouraging dialogue among executives, business owners, and project managers right from the start of each project, to secure alignment, assess projects, and course-correct as needed.
  • Establishing the right conditions for success, including setting expectations regarding required behaviors, having the right project managers in place, and securing senior-level sponsorship.

Benefits Realization Management Framework

PMI’s framework provides a set of questions and good practices that project leaders can use to identify, analyze, deliver and sustain benefits.

“Effective benefits realization demands a focus on outcomes, sometimes over the very long term. Many organizations still manage by measuring only traditional project outputs such as time, scope, and budget without tracking whether each project drives the organization toward its strategic goals,” noted Langley.

To download the 2016 Thought Leadership Series reports or framework, visit http://www.pmi.org/learning/thought-leadership/series

About Project Management Institute (PMI)

Project Management Institute (PMI) is the world's leading association for those who consider project, program or portfolio management their profession. Founded in 1969, PMI delivers value for more than three million professionals working in nearly every country in the world through global advocacy, collaboration, education and research. We advance careers, improve organizational success and further mature the project management profession through globally-recognized standards, certifications, communities, resources, tools, academic research, publications, professional development courses and networking opportunities. As part of the PMI family, ProjectManagement.com creates online global communities that deliver more resources, better tools, larger networks and broader perspectives. Visit us at www.PMI.org, www.projectmanagement.com, www.facebook.com/PMInstitute and on Twitter @PMInstitute.

Media Contact:

Rick Alcantara
PMI
+1 610-356-4600  x7030
Rick.Alcantara@pmi.org