With the complexities of our programs and projects today, the increasing use of virtual teams for our work, and our many stakeholders and challenges, our focus has shifted from only considering the triple constraint and customer satisfaction to a view of the business value of our work and its contribution to strategic goals and objectives from its outcomes. While we continue to focus on deliverables, we also focus on benefits, which represent a culture change for many people in different organizations. This emphasis on benefits involves identifying the benefits a program or project can provide in order to justify it, planning for how the benefits are to be realized successfully, monitoring and tracking the benefits and preparing a benefit report on a regular basis, and closing the program or project once all of the benefits have been attained and can then be transitioned to customers or an ongoing operational unit so they can be sustained. It is a new approach for many people to think of the work they are doing in terms of its ultimate benefits. Benefits realization is a positive change but one that needs to be ingrained in each person's work. This paper, and the accompanying interactive presentation, describes how best to manage and deliver the tangible and intangible benefits of programs and projects. It presents ten guidelines for use by the portfolio, program, and project manager and his or her team in terms of strategies for organizational success through effective benefits identification, realization, and management by implementing or enhancing a benefits realization program in one's organization and thereby delivering business value.
Introduction
Success has numerous definitions, but one way to think about it is to view it as contingent on making predictions and meeting commitments relative to products, services, or results and providing sustainable benefits for customers and end users in the process. As we work toward success, it is essential to determine our priorities for the short and long term, the various deliverables our organization should pursue through its programs and projects plus their benefits, needed resources, and especially to determine how our programs, projects, and operational work support strategic goals and business value.
Realizing this success is easier said than done. The Project Management Institute (PMI®), in its recent Pulse of the Profession® report, has been tracking the effectiveness of maturity in benefits realization, and data collected show that the more mature an organization is in realizing benefits, the more likely it is an organization in which projects are completed on time and within budget, and an organization that meets its original goals and business intent. PMI's 2015 report notes, “Though only one in five organizations report having a high level of benefits realization maturity, we've seen an increase of 63% compared to the level in 2013” (p. 4). This report also states that benefits realization is the way one can manage how programs and projects add value to the organization, and that organizational leaders who understand this value recognize what is necessary to realize their investments on programs and projects. It further explains that only a few organizations have a benefits realization program, which contributes to the inability to achieve the desired rate of success.
Although much has been written on benefits realization since the 1980s, primarily regarding return on investment in the information systems field (Thorp, 2001), it began to be discussed in the project management field in the 1990s in program management (Pellegrinelli, Partington, & Geraldi (2011). Drawing on work of Darwin, Johnson, and McAuley, who questioned whether benefits realization management was a passing fad or a “false dawn” in 2002, Breese (2012) discusses its emphasis and importance to the project field and its association with value management. He explains it shows how project management has broadened its focus and notes its current interest is not a “false dawn” as it bridges “the gap between strategy/change management and project/programme management” (p. 350) but recognizes it is a challenge because of the complexities facing organizations.
Definitions and Relationships
Projects have been in existence forever, and many use the pyramids as an example to see the differences between portfolio, program, and project management. A portfolio “refers to projects, programs, subportfolios, and operations managed as a group to achieve strategic objectives” (PMI, 2013a, p. 8); a program is “a group of related projects, subprograms, and program activities managed in a coordinated way to obtain benefits not available from managing them individually” (PMI, 2013a, p. 8); and a project “is a temporary endeavor undertaken to create a unique product, service or result” (PMI, 2013a, p. 3). Using the pyramid example, assume that someone in ancient Egypt recognized the pyramids’ importance to the country and building pyramids was part of the country's portfolio. If only one pyramid was built, it would lack the appeal, or sustainable benefits, of several pyramids; thus there is the need for a program with individual projects and other work involved. Building the pyramids was a complex undertaking, with numerous changes, but the strategic goal was achieved, and the benefits have been sustained for years thereafter.
Benefits are a domain in PMI's The Standard for Program Management – Third Edition (2013d). From the first edition of the The Standard for Program Management through this Third Edition, benefits are emphasized. It defines a benefit as “an outcome of actions, behaviors, products, or services that provide utility to the sponsoring organization as well as to the program's intended beneficiaries” (p. 165). The same definition also applies to a single project. Managing Successful Programmes states a benefit is a direct contribution to the organization's strategic objectives, with an advantage accruing from its outcome (OGC, 2007). The Office of Government Commerce (OGC) further suggests a program with a chain of benefits, building on the concept that if a benefit is realized early in a program, it can provide needed funding for later benefits; the process then continues until all benefits are realized.
Program and project managers then work to prepare plans to realize the identified benefits and manage them until they are transitioned to an operations or support group, customers, or end users.
In PMI's The Standard for Portfolio Management – Third Edition (PMI, 2013c), benefits realization analysis is a tool and technique in its Manage Portfolio Value process in the Portfolio Performance Management Knowledge Area. It serves as a way to support the portfolio optimization and authorization processes and enables the easy comparison of benefits to one another if carefully selected and consistently applied criteria are used. This standard explains, “benefits may be categorized and the categories can be prioritized” (p. 99). It suggests using a results chain and an outcome probability analysis of the portfolio to help increase the achievement of benefits. The results chain approach shows cause-and-effect relationships between the components to deliver the planned benefits. Considering this approach, one then can see what might happen if a component were terminated or finished earlier or later than planned to other components. The standard explains, “it also shows gaps and overlaps that need to be addressed to more effectively or efficiently realize planned value” (p. 103). The outcome probability analysis enables the portfolio manager to estimate portfolio outcomes considering success criteria. He or she does so by listing the possible values of the various performance indicators along with their associated confidence levels. When these are expressed as a cumulative distribution, the portfolio manager can analyze it to set more realistic targets for benefit achievement that support the risk tolerance levels of the organization's key stakeholders. These techniques then support the portfolio goals, especially if the portfolio ideally consists of all the work under way in the organization, to ensure this work delivers benefits, whether internally or externally.
Through the realization and hopefully the sustainment of benefits, the program or project contributes to business value for the organization. Although business value means different things depending on the type and functions of the organization, PMI (2013a) defines it as “the total sum of all tangible and intangible elements” (p.15). The goal, as stated by PMI, is to use portfolio, program, and project management to better meet strategic goals and objectives, thereby attaining greater business value. Further, as Serra and Kunc (2015) explain, “benefits are usually achieved using programme and project management techniques. Therefore, the creation of value for business, by the successful execution of business strategy, strongly depends on programmes and projects delivering the expected benefits” (p. 55).
This paper and its interactive presentation describe how best to manage and deliver the tangible and intangible benefits of programs and projects. It presents nine guidelines for use by the portfolio, program, and project manager and his or her team in terms of strategies for organizational success through effective benefits realization and management by implementing or enhancing the benefits realization program in one's organization.
Benefits Life Cycle for Programs and Projects
For project professionals, a life cycle is typically followed, generally from initiating to planning, executing, monitoring and controlling, and closing. A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition (PMI, 2013a) states the importance of a life cycle in enabling project professionals to know what is expected in each phase. In the first to the third edition of The Standard for Program Management, the benefits life cycle is noted, and by reviewing it, one can see that it correlates to the project life cycle in the PMBOK® Guide (PMI 2013a) as well as to the program life cycle in the The Standard for Program Management – Third Edition (PMI, 2013d).
Breese (2012) notes that benefits realization and its management involve change management, and in a way, its implementation occurs though a life cycle of change management. He states that this life cycle begins with identification and ends with realization.
This section presents a brief overview of this benefits life cycle, as defined by PMI (2013d), with some examples and best practices to consider.
Benefits Identification
Identification is step one, but it is not a one-time endeavor. It continues throughout a program as new projects are added and also continues in work in project or portfolio management. Why? To realize and sustain benefits, it is necessary to identify them, and this benefits identification process is similar to that in risk management and stakeholder engagement; however, it precedes developing a plan and is proactive because the work is to deliver business value. Approaches to identifying benefits include review of work on previous programs and projects, brainstorming sessions, interviews with various stakeholders, and focus groups, to list a few. Ideally, the organization's leaders appoint a benefits champion, and program and project managers select a team member to fulfill this role; the champion leads the process.
Next, the identified benefits are classified. One approach to do this is analogous to classifying stakeholders, typically in a four-quadrant format. This approach differentiates between financial and nonfinancial benefits and tangible or intangible ones (Williams & Parr, 2006). The tangible and financial ones include return on investment, an increase in net profits, resource availability with the desired competencies, new customers, new markets, cost reduction, or net present value, capture the attention of executives; however, the intangible ones can be equally important. Often, the intangible benefits, such as an increase in customer satisfaction, improvements in staff morale, enhanced strategic alignment, recognition of legal or regulatory compliance, or using a customer-centric approach in work in portfolio management, outweigh the tangible, financial metrics. Typically, these intangible benefits need to be translated into tangible ones through surveys—for example, of customers—to see their satisfaction with the end product or provided services. Another survey can be sent to staff members to determine their satisfaction with the processes and procedures used. The results may find some processes that are not being used, which leads to finding out if they can be eliminated and then saving time if they are not needed or can be streamlined or tailored.
As another example, consider an internal program to restructure all information systems used so there is a single point of entry, and they are easy to access. Though the financial benefits need identification, intangible ones can include alignment of the benefits to the organization's strategic goals and objectives and an increase in employee productivity and even morale as a person does not have to search numerous databases to find needed information. In turn, the organization realizes its return on investment through an increase in productivity and a reduction in the need to make numerous contacts with the information systems group, hopefully leading to greater satisfaction among the staff.
Shao, Müeller, and Turner (2012) propose a classification system to lead to program success in which delivery capability is a tangible benefit, while organizational capability, marketing capability, and innovative capability are intangible benefits. Arrivabene (2013) suggests consideration of the organization's strategic plan and the need for a clear alignment with the long-term objectives; therefore, he proposes an order-of-magnitude estimate to show the program's contribution to the organization's key performance indicators. He also explains that such a comparison is useful at the portfolio level to show the impact if the program is not undertaken. He emphasizes a dynamic link between benefits and the business strategy, with recognition that when the strategy changes, a review is needed to evaluate any impacts on the program and its expected benefits. Thiry (2010) explains identifying benefits is a difficult job, referring to them at the program level. He proposes a hierarchy based on the purpose and strategic goals of the organization to the delivery of the program's products or services to then enable benefits measurements.
If set up correctly, data then become the “new middle manager” (Mims, 2015), and people through data analytics can then turn their attention to work that is more creative and innovative rather than spending hours searching for information or needed subject experts and devoting time to preparing reports, as data transparency becomes the norm.
The identified benefits then are documented and expanded upon in a benefit register, comparable to a risk or stakeholder register, throughout the life cycle.
Benefits Analysis and Planning
The next step is to analyze the benefits and prepare a benefits realization plan. Analysis sets metrics and key performance indicators for each identified benefit. Examples of benefit metrics are ones that show cost versus benefits, the time it will take to realize each benefit, the resources needed to do so, and contribution to strategic objectives, to list a few. The metrics ideally are ones of interest to stakeholders and are easy to collect. For example, if the cost to realize a benefit is too great, it enables leaders to rethink their strategic goals and objectives as the benefit may not be able to be attained in sufficient time to make it a worthwhile strategy. Analysis is ongoing and becomes easier with rapid access to data, and it is necessary at the portfolio, program, and project levels.
It then precedes preparing the benefits realization plan, as it may mean that an identified benefit may not need to be part of the plan. However, the best practice is to involve stakeholders in preparing the plan for buy-in and support, including those stakeholders who will be responsible for benefit transition and ultimate sustainment, even if they are external to the organization. This benefits realization plan differs in scope at the portfolio, program, or project levels, yet its objective is the same: to guide the realization of the benefits and to be a baseline plan at all three levels. Once complete, the benefits register is updated, and often the analysis and planning phase results in additional benefits that may have been overlooked during the initial identification.
Arrivabene (2013) extends the discussion by suggesting that a benefits realization monitoring plan also be prepared to ensure agreement on the benefits realization criteria. He suggests having this plan, among other items, it focuses on measurement units to promote a clear understanding and for further comparisons to any key performance indicator values, the date to start measuring benefits, the frequency of their measurement, required resources, the new value for key performance indicators after the benefits are delivered, how the benefits will be communicated to stakeholders, and the accountable person.
Benefits Delivery
In most cases on a project, benefits are delivered when the project is complete and has closed. On a program, benefits often are delivered incrementally, when different projects close, or they are delivered all at one time when the program closes. Here, the delivery depends on whether it is a product versus a service or result, with service and results-oriented programs more likely to deliver benefits incrementally, with programs focused on products typically delivering benefits once the product is complete. At the portfolio level, it is an incremental process, making a roadmap an excellent way to show the benefits status and to link them with the organization's strategic goals and objectives. This approach enables executives to ensure enough programs and projects are in the pipeline and to then focus as well on revisiting each portfolio component whenever strategy changes to see if the component should be retained, deferred, or terminated. To do this effectively, the benefits champion works in collaboration with the business development team for a greater awareness of external factors and customer anticipated requirements. A roadmap at the program and project levels is similarly useful. In this phase, the established metrics for benefits realization are maintained and updated, and the benefits register also continues to be updated.
Benefits Transition
In this phase, the program or project manager prepares a benefits transition plan, hopefully with active involvement from the stakeholders who are the benefit recipients. Its execution then concludes the program or the project, but ideally the program and project managers are available if needed for consultation. The benefits register is updated and archived. At the portfolio level, data show the benefits have been realized, and the transition has occurred. The portfolio manager updates the roadmap, but if the program or project was done for a major customer or for a unit within the organization, the actual benefits may continue to be tracked to evaluate the realized business value.
Benefits Sustainment
The goal for a program or project is for its benefits to be sustained for years or centuries, as with the pyramids. Though there are numerous examples, such as the Sydney Opera House, with changing technology the norm, often sustainment does not last as long as desired. However, the program or project manager works to prepare a benefit sustainment plan to promote ongoing sustainment activities. Often, the result is the need for a new program or project based on the sustainment activities, and if so, it becomes part of the portfolio, and its benefits are part of the roadmap. Additionally, as Thiry (2010) notes, program sponsors seek a greater degree of success criteria with a drive toward sustainability rather than short-term results, providing a greater link between expected benefits and business results.
Benefits Realization Roles and Responsibilities
With change and complexity the norm and not the exception, the traditional ways of managing programs and projects, and even portfolios, are not appropriate. One no longer can be successful with a focus on time, cost, scope, and quality, and one must be exemplary in the work that is done. Each organization ideally has a champion for benefits realization who reports to the Portfolio Management Office (PfMO) or to a senior executive. This section discusses an overview of some key roles and responsibilities.
Communicating Its Necessity
In 1985, Stuckenbruck and Marshall noted that 90% of a project manager's job is communication, and he or she spends about 50% of that time communicating with the project team. Therefore, as benefits realization is implemented, the benefits champion must have the ability to communicate effectively at all levels: upward to executives; lateral to peers and those at comparable levels; downward to those involved in programs, projects, and operational work; and externally to influential stakeholders, including customers. Throughout, as benefits realization becomes ingrained in the organization and is considered a standard way of working, the benefits champion continually communicates its value, focusing on active communications and welcoming new ideas as a way to promote buy-in at all levels. Additionally, he or she actively listens to the views of others, regardless of their position in the organization, to further a transparent process. Rather than explaining and convincing, the benefits champion emphasizes conversations and participation. He or she projects an atmosphere of open communications throughout the organization that people at other levels can emulate.
Working with Stakeholders
Engaging stakeholders so they recognize the emphasis on benefits realization and business value takes time. The benefits champion easily can find positive stakeholders who want to be involved and supportive, and he or she then enlists them regardless of their level in the organization. Many, however, will have difficulty understanding the concepts, and it is normal for people to resist change (PMI, 2013b). By engaging the positive stakeholders, the benefits champion will have his or her network to help overcome the negative resisters. One approach is to invite resisters to come to meetings or orientation sessions, using a variety of social media, and ask questions. Interviews also can be held with influential stakeholders who may be resisters to listen to their points of view using open-ended questions. Then the benefits champion can think about the resisters’ concerns and provide feedback, trying as much as possible to incorporate their ideas as to how to best promote benefits realization in the organization.
To keep stakeholder engagement high, a best practice is to note his or her preferred communications style and try to use it as much as possible. The benefits champion also pays attention to his or her own barriers and obstacles to communicate more effectively, as it is easy to have barriers such as denial, projection, displacement, and objectification from time to time (Levin, 2010). Often the problem is people lack of information as to why benefits realization is being implemented. People may wonder whether their work has value and whether they will profit when it is completed, whether they will be assigned to another program or project once their work is complete, if there is a career development path, and how they are perceived by managers at various levels. These concerns show the importance of communicating using a variety of media and knowing which type of approach is preferred by various stakeholder groups. Further, consistent messages are needed.
Establishing Metrics and Procedures to Define Benefits
Because portfolio management is a decision-making process, it requires data in a format that is easy to understand to track component progress in delivering benefits and in preparing forecasts to determine whether the portfolio is adding value. These success metrics consist of ones that are quantitative or tangible or qualitative and intangible, as previously discussed. Hopefully, a portfolio management information system is in place so the data are easy to collect from a single system and can be presented in the report formats desired by the Portfolio Review Board members or members of comparable groups. Such an approach can facilitate decisions made based on facts that are in turn communicated to others.
The benefits champion is charged with developing and maintaining the processes to follow and the tools to use. The administrative system ideally is useful but is not considered too cumbersome. The benefits champion can create a draft of its contents and then request feedback on it from a variety of stakeholders at different levels. A balance between excessive structure and a “laissez-faire” approach is the desired goal so people can commit to the process. The goal is continuous improvement to the benefits realization process through eliciting regular stakeholder feedback.
Leadership and Benefits Realization
Leadership is embedded in some way into everyone's jobs whether it is stated explicitly or implied. First, the project professional, who is the benefits champion, sets a vision for benefits realization, which ideally is embraced at any level. Crafting the vision is not easy; it must represent the future state and cannot be considered a slogan or passing fad. Therefore, benefits realization is the business driver for organizational success, as it ensures that only those programs, projects, and operational activities with defined benefits, which support organizational strategic goals, will be pursued and continued with experienced people to do the work to attain and sustain the business benefits. It also leads to the creation of a mission statement for benefits realization to show why it is important; without it, resources may be misallocated and will not support organization strategy. Next, the values to follow in making decisions are developed. These values require transparency to avoid personal agendas that drive decision making. Implied goals must be explicitly stated to show the added value benefits realization can bring. Congruence follows as the benefits champion demonstrates the values in his or her actions to others throughout the organization.
Embracing and Implementing Cultural Change
Culture is defined in different ways by different organizations. In his discussion of program culture, Thiry (2010) provides suggestions for promoting a program culture, which by extension can be applied to a benefits culture. He explains that a common view is required, meaning the organizational leaders set the stage for which benefits are important to business value. Next, he explains goals and objectives should be shared, noting here the importance of ongoing communications to foster the change. He also focuses on processes and procedures, which also are required for benefits realization; ensuring that they are useful at the program, portfolio, and project levels; and defining the contribution each project makes to the program, extended to the benefits each project provides.
Additionally, an overreliance on tools is not the answer. Instead, the culture focuses on benefits and business value by each member of the organization such that by taking a strategic approach rather than one purely focusing on executing, one can better understand this change and why it is needed.
Further, it is beneficial if a top-down approach is used, with leaders showing their commitment to benefits realization and business value and appointing a benefits champion. However, often it is up to project professionals to take the lead and use a pilot initiative to demonstrate why a culture change to one focused on benefits is required to demonstrate the added value it will bring.
Ten Guidelines for Successful Benefits Realization
Each person needs to see how his or her work contributes benefits to the organization's strategic initiatives. However, few organizations have focused on implementing benefits realization, or if they have done so, many leaders view it as a competitive advantage and are reluctant to share how to implement it effectively. Others may implement it but not follow through or will focus efforts on tools and techniques, rather than processes and competencies required for success. Some organizations may lack a documented, defined strategy and plan as to how to put it in place. Ten guidelines for successful benefits realization follow.
Working with the Program Management Office and the Portfolio Management Office
Ideally, at the enterprise level and then at other levels, such as a business unit, department, or division, the organization has a Program Management Office (PMO) and a PfMO. The benefit champion can reside in either organization, but ideally in the PfMO since it works with executives to select programs and projects to pursue, prioritize them, and terminate ones that no longer support strategic objectives. The benefits champion can review business cases for proposed programs and projects to ensure stated benefits are reflective of organizational strategic goals. He or she also can assist program and project managers in preparing a strategy that emphasizes benefits in concert with business value. By doing so, the champion encourages the program and project managers to continue to execute their work effectively but with a different and broader focus with benefits playing a key role throughout the life cycle and before it begins as the business case is prepared. He or she prepares policies, procedures, and guidelines emphasizing the work to be done following PMI's (2013d) benefits life cycle, determines tools and techniques to identify and classify benefits, and prepares templates that can be tailored easily for a benefits register, benefit reports, and benefits realization, transition, and sustainment plans.
Leadership
An interpersonal skill in leadership is one in which the benefits champion establishes the vision through active engagement with stakeholders and recognizes when changes are required. To do this, the benefits champion forecasts the future seeking business and competitive intelligence to propose new products or services to position the organization to increase its market share and reach more valued customers in the process. As the leader, the benefits champion establishes the overall direction and structure for benefits and identifies and communicates critical success factors to stakeholders. For example, he or she could follow a best practice in benefits realization and prepare a roadmap containing interdependencies between the work under way and milestones as to when a benefit is to be realized. Arrivabene (2013) notes that the roadmap also serves as an “effective communications tool in order to clearly set the stakeholder's expectations” (p. 83).
Designating a Team Member to Be a Benefits Champion
On a program and also on a project, the manager should identify a team member to be its benefits champion. This person would interact with the organization's benefits champion. He or she would build the benefits breakdown structure (see the next section), identify and maintain the benefits register, prepare the benefits realization plan, and set up the metrics the program or project will use to track benefits realization. Additionally, this team member, by working closely with the PMO and PfMO, can build a program or project roadmap, which can be incorporated into that at a higher level so there is communication as to when these benefits will be realized and what their contribution will be to business value. As well, he or she works with the program or project manager to effectively transition the benefits once they are realized, engaging the appropriate stakeholders in the process.
Using a Benefits Breakdown Structure
Thiry (2010) suggests use of a benefits breakdown structure (BBS). He notes the use of functions analysis to focus on functionality rather than features, following a “how-why” logic. With this approach, he explains that benefits then are synonymous with functions in a process. However, the difference is, with a focus on benefits rather than products, the team ensures that the strategy is supported, and products correspond to a real organizational need.
While the BBS is used especially at the program level, it is also useful on individual projects. It builds on the familiar work breakdown structure (WBS) and can be an extension of it. To use it, consider each level one element in the program or project WBS and engage a core team or a small group of interested stakeholders to then identify any benefits with this element. Some elements in the WBS may have tangible benefits associated with them, while others will have intangible benefits, even the program or project management element. Considering this element, for example, an intangible benefit may be following repeatable processes, which in turn saves time and resources. By doing so, it can lead to enhanced team productivity and may enable more programs and projects to be completed on time without a cost overrun with realized benefits. If the core team participates in its development, it also is a motivating factor and helps them buy into the concept of benefits as the scope of the program or project is determined.
Working Effectively with Stakeholders
The benefits champion has limited time to spend with each stakeholder or stakeholder group in conveying why benefits realization will lead to a competitive advantage to the organization; therefore, one must assume swift trust from the beginning until proven otherwise and listen carefully to comments anyone makes to obtain buy-in and support (Meyerson, Weick, & Kramer, 1996). In listening, one requires an open mind to possible suggestions to avoid future roadblocks and asks how-, what-, and when-type questions to ensure the suggestions are heard correctly for feedback. By following such an approach, the benefits champion demonstrates that he or she sincerely respects the views of others, recognizing organizational goals and stakeholder expectations change continually, rather than at set milestones, and highlighting the necessity of people working in concert instead of in silos. This approach is difficult in the face of exponential change and complexity to maintain a long-term, strategic focus, to be able to forecast external and internal trends, and to alter direction quickly in what appears to others to be in a seamless fashion.
Effectiveness in identifying stakeholders is ongoing at all levels, and some stakeholders will lack interest at certain times, while others will want information on only certain items in the benefits roadmap and their status, and others may have an interest in all the benefits and their corresponding programs or projects in the roadmap. The benefits champion works with stakeholders who are not actively engaged to find out why and to recognize their concerns. To do this, the benefits champion can encourage these stakeholders to offer ideas and suggestions because benefits realization is a culture change for many. The objective is to follow up and seek solutions if there are issues that need resolution.
The goal is to build winning relationships. Trust between the benefits champion and stakeholders is required to leverage political dynamics to focus on business value through benefits realization. Continually expanding one's own network is recommended, along with focus groups to engage stakeholders at various levels and gauge their attitudes to how best to inculcate benefits realization in the organization.
Involving Appropriate Governance Boards
In portfolio, program, or project work, governance boards are increasingly used. When they meet to assess progress or perform reviews, an agenda item should be the status of benefits realization. Piney (2013) explains that at each review, a benefit performance index, a benefit schedule performance index, and a benefit value performance index be discussed, noting that any values less than 1.0 in these areas indicate “a slip in either cost or time—or both—which will need to be explained” (p. 118).
The performance review meetings, rather than a phase-gate session, serve as an ideal time to review progress toward benefits realization. They can address alternative approaches if it appears, for example, that the cost of realizing an identified benefit is too great to see if an additional approach can be used. These sessions also may uncover other benefits that were not identified earlier. They additionally enable a focus on benefits to overall organizational strategy each time a review is conducted.
Incorporating Benefits Realization into One's Performance Evaluation
Although work at the portfolio, program, or project level is team-based, it is rare for one's performance to be evaluated according to the ability to work well on the team. Even if a team-based evaluation system is used, individual performance also will be evaluated. Each person is motivated differently, but each person works in one's own self-interest. Therefore, to adequately encourage a culture change to benefits realization, it needs to be part of each person's performance evaluation. This approach shows the commitment of organizational leaders to benefits realization and easily captures one's own recognition of it as a desired competency to ensure one's own success and future in the organization. Within the performance evaluation, regardless of one's roles and responsibilities, the benefits realization criterion focuses on the benefits of the work one has done, not solely on the deliverables or activities completed but on the benefits of doing so. The evaluation further can reward someone if he or she feels his or her work is not in synch with the organization's strategic goals and objectives and points it out to senior leaders. If there is agreement then by the leadership team that the work now is no longer needed because goals and objectives have changed, this person can be recognized for elevating it and then can seek new opportunities rather than finishing something that once completed will lack business value.
Providing Training and Orientation Sessions on Benefits Realization
As Breese (2012) explains, organizational culture implies the organizational leaders must see why benefits realization is necessary and then focus on its value so it can be understood and part of the decision-making process. He further notes that people in many organizations may not recognize the need for benefits realization.
To expand on this concept, training and orientation sessions on benefits realization are a best practice. It is a fairly new concept to the practice of project management and expands on the typical performance based on planning, executing, and monitoring and controlling techniques as it focuses on strategic business concepts. People working on programs and projects of any type then can attend sessions on why business benefits are now an area of emphasis, and others in the organization can take an orientation session to see from a leadership perspective why an emphasis on benefits is a new direction for the organization.
Monitoring and Tracking Benefits Realization for Organizational Value
To demonstrate why benefits realization is important, each organization through its benefits champion determines methods to track its overall contribution to business results. Zwikael and Smyrk (2012) note the difficulty in measuring benefits as many organizational leaders continue to evaluate projects by efficiency given the measurement difficulties. One approach is to begin with the organization's vison, followed by its objectives. Then the emphasis shifts to outcomes in terms of benefits by objectives, subdivided further into outputs and then to activities, building on the work of Breese (2012) in regeneration projects. In a way, it is similar to a BBS, but instead it links directly to the organization's vision and the strategic objectives to attain this vision.
Piney (2013) suggests another technique, earned benefits management, to plan and track benefits realization. He explains it is an extension of the earned value method focused at the program level since the program's purpose is to achieve benefits. In his approach, he explains how to calculate the total earned benefit by summarizing the components’ earned benefit contributions. He also describes the planned benefits, earned benefit at completion, the benefits variance, benefits schedule performance, and equivalent benefit cost with specific formulas and with an example.
Additionally, from an executive perspective, the benefits champion can weigh the various benefits in the roadmap for a more equal contribution of their value, because some obviously have greater significance than others. The champion also describes each benefit in as much detail as possible for ease of understanding.
Focusing on Continuous Improvement
Continuous improvement is needed in many areas and especially in something that may be new to an organization, such as benefits realization. Then it is necessary to monitor its implementation carefully and review each business case for new programs and projects to see from the beginning whether the stated benefits are achievable and to ensure these benefits will result in business value as defined by organizational leaders. Its implementation is not easy, given people's natural tendency to resist change, which means even though each organization is unique and complex, specific accountabilities for benefits realization are a prerequisite. And as Serra and Kunc (2015) explain, it may be necessary for organizational leaders to redesign the definition of success to show the link between benefits and business value rather than defining success on the effective completion of deliverables.
Summary
As project professionals, our objectives are to deliver the expected benefits from portfolio, program, and project work. To do this, each program and project is managed effectively with an overarching focus on organizational strategy such that the benefits that were relevant when the program or project was approved remain relevant when the program or project is complete. By doing so, success can be measured through benefits realization. However, program and project managers, to better recognize the business value of one's program or project, need greater exposure to why it was selected to be part of the organization's portfolio and its business case to recognize the benefits it is supposed to deliver.
Are you ready? Benefits realization is a reality and is not a “false dawn”!
