Delivering benefits

the who, the what and the how!

 
img

Olivier Lazar, Msc., MBA, PMP, PMI-RMP, PMI-SP, PMI-ACP

In recent years, project management has faced an impressive evolution in the expansion of its scope. One of the best illustrations of that evolution is the emergence of standards addressing program or portfolio management, and not only at PMI.

Thus, the roles and responsibilities of the project manager have also evolved tremendously.

As this role is basically described in the different project management standards, the project manager is responsible for delivering the outcome of the project, taking into account the classical triple constraint of time, cost, and quality. And that's it, most of the time, in most organizations. This vision of the performance of a project, and very often then of its success, describes the “technical” and “complicated” aspects of project management representing one dimension for the project manager to address.

But, even if respecting and delivering the parameters of the triple constraint reflects good project management performance, this does not reflect the success of a project anymore. These days, the success of a project has to be measured in regards to the value produced by the outcome of the project. And in many organizations, it is easy to deliver on time and on budget an outcome which doesn't produce the value expected by the project stakeholders. Even if the project is delivered within the triple constraint, and if its outcome fails in delivering that value, the optimal usage of resources by the project manager is a waste with regard to the organization.

The delivery of value can only be done by applying a strong management process that takes into account the stakeholders and their expectations throughout the project, extending the very scope of the project manager to deliver not only the project right, but also ensuring delivery of the right project—the right way for the right stakeholders to fulfil the right expectations. This is definitely adding new dimensions to the single project management technical aspects of the triple constraint. And by adding new layers and dimensions, the value context to be addressed by the project manager moves from complication to complexity.

In this paper, we will explore these new dimensions, connecting projects, operations, programs and strategy, relaying with principles of value management and complexity management to define, address, and achieve project success. As a conclusion, we will also show operationally how to define and measure value through a project value chain helping project managers to identify stakeholders, express their expectations, identify their needs, and formalize project objectives.

The first aspect to consider is the definition of project success. What is project success?

For the project manager, it's usually related to the delivery in scope, time, cost, and quality. But what about a project delivered in this constraint and for which the organization has never been able to sell the outcome and get the expected profit? Obviously it's a failure. Even if properly delivered, it was an efficient wasting of the organization's resources. What also about a project which was four times over budget, two times over timeline and was not conforming to the specification, but for which the outcome delivered a high unexpected value? Success or failure?

Sometimes a project considered a success is finally turned into a failure and another which was considered a failure turns out be a big success. How thus to ensure that the organization is undertaking the right investment? And for the right reasons?

The role of the sponsor is of course essential. According to the definition given in A Guide to the Project Management Body of Knowledge (PMBOK Guide®) – Fourth Edition, the sponsor is responsible for the delivery of the business benefits expected from the outcome of the project to the organization and to the stakeholders. Stating this, we accept that the project itself is not delivering the value; the value is only realized through the exploitation of its outcome. The project itself as a process is only a cost; at best it is an investment. Success is only achieved by realizing the benefits expected from this outcome, the delivery of which is the responsibility of the project manager. But the sponsor can't realize any benefit if the project manager doesn't deliver, and the project manager can't deliver if the sponsor doesn't provide him with the required resources and doesn't ensure that the business case is reliable and that the project justification is solid.

The first conclusion we can draw from these statements is that the success of a project lies in the ability of its outcome to produce value, and secondly that at the end, the project manager and the project sponsor are jointly responsible for the realization of that value.

A project is then not anymore measured toward the triple constraint, but also by its ability to deliver the benefits expected…Delivering the expected benefits is usually considered to be the outcome of a program if we rely on the definitions given in the The Standard for Program Management – Second Edition. It even makes one of the main differences between a project and a program; it's also what makes the link between these two layers of the organization's strategy.

The first factor of success for a project will lie in the alignment of this component with the strategy of the organization.

img

Exhibit 1 – The alignement of stategic components, from “The Project Driven Strategic Chain” (Lazar, 2010).

The alignment guarantees that the outcome of the project will contribute to the achievement of the goal of the program, itself having to be aligned with the strategic vision of the organization and the performance targets of the different portfolios in place (see Exhibit 1).

To produce an outcome which will realize the organization's strategic vision, the project manager must have a clear understanding and perception of this strategic vision. The goal of the programs comes directly from the split of the strategic vision into smaller and easier to apprehend elements. The objectives of the projects are extracted from these goals, splitting them into more concrete and seemingly more manageable elements rather than a broader statement of expected benefits. Does that mean that a project is obviously integrated into a program? Or that a stand-alone project has to be considered as a program? Not necessarily, but its objectives have to be derived from this strategic vision, which shows to the entire organization which direction the efforts have to be oriented, making the factors of this strategic alignment key metrics in the definition of the project success and its measurement.

One could argue that the steering of this strategic alignment is the responsibility of the project sponsor and not of the project manager. But this statement is not true anymore in times where resources are so scarce and productivity targets so high. The project manager's responsibility is to ensure that the resources placed under his control are used efficiently, not only delivering the project right, but also delivering the right project. It will be his responsibility to alert the sponsor and the organization that the resources committed to the project and thus the project itself are not able to deliver the expected value and recommend the early closure of the project or reconsideration of its business case anymore—even if the time/cost/quality metrics are good.

The second factor of project success, which will effectively define the operational aspects of operational success, will be related to the perception the stakeholders will have about the project.

Each will have his own perception of the value related to the project's outcome, and this perception will be subjective. It lies in the responsibility of the sponsor, by owning the initiation processes of the project driving to the project charter to ensure that the expectations of these stakeholders have been taken into account and that, most of all, no important stakeholder has been forgotten in this analysis.

The practical approach will be based on the construction of the project value chain, starting with the identification of the stakeholders and their categorization according the “3 i's”: Influence, Interest and Intent (See Exhibit 2).

img

Exhibit 2 – Stakeholder analysis from “Value Management Practice” (Thiry, 1996).

The second step is expressing stakeholders' expectations, gathering their perception of the project:

Expectations are diverse, and competing; the third step will highlight the ones which will deliver potential value, excluding the cosmetic aspects and making trade-offs between the elements to identify the needs.

Value is based on the balance between benefits and resources. Then we will define which of the needs will be addressed, formalizing the objectives of the project and committing to deliver them, and defining the scope statement of the project.

These objectives will be defined and specified to be measurable by performing the functional analysis, describing objectives by functions. For each function there must be a deliverable allowing achieving it, shown in the WBS.

Each function can be also measured according to related key performance indicators (KPIs), defining the quality targets and used as metrics for the quality control process.

The value chain provides measures to define project success and its metrics, feeds major planning and monitoring processes, and secures a proper integration of the different project's components.

img

Exhibit 3 – The project value chain (Lazar, 2011).

It's only when the project manager can be sure that all the indicators related to the value chain are fulfilled that he can expect to have delivered a certain value to the organization and by extension to the stakeholders (See Exhibit 3).

The sponsor will be held responsible for the delivery of these benefits, but the project manager shares with him the responsibility.

It's the project manager's role to ensure that the project is aligned with the expectation of the stakeholders, that the project management process is properly conducted, and that finally, the resources put under his responsibility are effectively utilized.

All of these aspects, going far beyond the classical triple constraint are adding new dimensions to the project manager's job, making the frontier between projects and programs, between project managers and program managers, even thinner by including a complete set of strategic perspectives, considerations, and constrains.

Above the single dimension of time, cost, and quality, the constraints put on the organizations to use their resources more effectively and to deliver value in a sustainable manner are adding new dimensions and layers: the strategic alignment and the sustainable value.

This step into complexity, into the integration of the different strategic layers of the organization is changing and has already changed the profile of project management.

From the simple complication of technical aspects, the project managers are shifting into the paradigm of managing complexity.

They have to take into account the global picture and how their projects are included in the wider perspective of their organization.

References:

Lazar, O. (2010, October). The Project Driven Strategic Chain. PMI Global Congress 2010, North America, Washington, D.C., USA.

Project Management Institute. (2008). A guide to the project management body of knowledge (PMBOK® guide) – Fourth edition. Newtown Square, PA: Author.

Project Management Institute. (2013). The standard for program management – Third edition. Newtown Square, PA: Author.

Additional Resources

Bucero, A. & Englund, R.L. (2006). Project sponsorship. San Francsico, CA: Jossey-Bass

Lazar, O. (2007). 3PM and Strategic Alignment: A Way for Corporate Governance. Proceedings from the International Project Management Workshop, Lille, ESC-Lille, 2007.

Shenar, Milosevic, Dvir & Thamhan, (2007) Linking Project Management to Business Strategy. Newton Square, PA: Project Management Institute.

Thiry, M. (1996). Value management practice. Newtown Square, PA: Project Management Institute

Thiry, M. (2010). Program management. Burlington, VT: Gower Publishing Company.

Advertisement

Advertisement

Related Content

  • PM Network

    China's Net Gain member content open

    The 5G revolution has come to China, where the government views the technology as an essential way to boost its economy. From 2015 to 2018, China sponsored projects to build roughly 350,000 cell…

  • PM Network

    Sustainable Change member content open

    By Supekar, Rajeev Japan's energy landscape has turned upside down in the past few years. A country once dependent on nuclear energy was forced to rush into renewables after the 2011 Fukushima Dai-ichi power plant…

  • PM Network

    Best in Class member content open

    By Fister Gale, Sarah The public school system in Tacoma, Washington, USA needed to transform its learning environment. The goals for the state's third-largest district were lofty: boost sagging graduation rates, invest…

  • PM Network

    Full Recovery member content open

    Hurricane Katrina decimated thousands of buildings in New Orleans, Louisiana, USA, in 2005, including a U.S. Department of Veterans Affairs (VA) medical facility that served approximately 40,000…

  • PM Network

    Ties that Bind member content open

    By Fister Gale, Sarah Health and safety is a goal for all communities. And this year's PMI® Award for Project Excellence winners helped deliver new life in unique ways. One improved training for emergency room doctors.…

Advertisement