Benefits Realisation Management (BRM)
Contents |
Abstract
Benefits Realization Management or BRM, is a method used in management to define and measure the value that a project, program or portfolio management will bring into a company.
The BRM is based on identify and work with the benefits of a determinate project, program or portfolio.
Although the method and its techniques can be used either for a project, program or a portfolio, in the remainder of this article it will be covered the BRM related with a program.
This article will also discuss the relation between the method and the success of a determinate program.
The benefits realisation management purpose is to identify the benefits that the organisation is going to acquire. Moreover, it aligning them with the interest and the vision statement of the company and it strongly increase the possibility that they will be gained. Indeed, one of the key point of the benefits realisation management is not only to define the benefits, but as well to decrease the possible risks related to these benefits.
The BRM method can be decomposed in three different steps : identify benefits, execute benefits and sustain benefits. Firstly, is important to understand wether a project, program or portfolio management will add value to the company. Secondly, the addition of new benefits and the decrease of risk in the existing one. Finally, in the sustain the manager ensure that whatever the project or program produce, it will keep adding values to the company, even beyond the end of the program.
These three aspects of the method and their techniques will be deeply discussed in detail further on the article.
Even though using the benefit realisation management bring to the company many advantages, it also has some limitations that will be introduce and analysed.
Introduction to Benefits
With the term benefits are considered all the outcomes of a program that increase or add value to the organisation or the stakeholders.
“Benefits are measurable and quantifiable improvements, which are normally expressed in financial terms, so they can justify any investment that may be required from the business”. *
Different kinds of benefits may be generated by a program and even if they have all positive effects they may require different kind of approaches. Indeed, although some of them are certain or they are related with a specific condition or achievement, others may be difficult predictable or highly uncertain.** Furthermore, the benefits may be either quantifiable or not. In particular, if they are not financial benefits, the measurement of them may be difficult. For example the increase of employee satisfaction with the program he is working with, is not as quantifiable and predictable as the achievement of a precise quote on the market.
Another classification is the three Es, that allows to cover the majority of the benefits and it help to better organise and manage them.The three categories are:
ECONOMIC BENEFITS: all the positive benefits related with the financial aspect and the cashflow.
EFFECTIVENESS BENEFITS: Improvement on the standard
EFFICIENCY BENEFITS: Improvement on the allocation of resources. ****
One of the characteristics of benefits is that they often have a defined beneficiar, and it may be either the company, the stakeholders or even the customers. By the way, even if the direct beneficiaries is not the organisation, the latter may also gain value from the improved service or the new ability gained through the process of delivering those benefits. ** To give an example if the customer benefits come from a in time delivery, the new or improved skills of the organisation may be considered as a benefit.
On the other hand, if the defined beneficiaries of a program do not realise the advantage of an outcome, it could have negative impact on the sponsor of the program. Some stakeholders may see the benefit as a negative outcome for them (dis-benefit).**** Consequently, is important to minimise this risk by communicating the benefits and aligning them with the interest of the beneficiar. It is extremely important that every stakeholders is aware of the positive outcomes of a program and how them can help achieve the main company’s objectives.**
The benefits of a program do not have a specific period. Indeed, they may be an outcome during one of the activities of the not ended program. For instance a project within the program may end and produce a positive outcome for the company, even if the program is not completed. Besides, they may be delivered when the program finishes or, furthermore, they can be showed after the closure of it.
The value gap between the real situation of the company and the future desired one, may be filled with all the benefits provided by all the successful programs.*
Relation between benefits and success of a program
In the last 20 years most of the companies (60%-80% according to a study conducted in 2008*) fail in delivering the expected outcomes of their projects, consequently even the business strategies are coming to nothing. * Decide wether a program is successful or not can create some ambiguity. Indeed, most of the time it depends on the criteria that are chosen to evaluate it. As a matter of fact even though a program ends within the expected budget and perfectly in time, it may be a failure in terms of additional value acquired by the company. On the contrary, it could happen that the outcomes provided by a program outweigh the failure in terms of cost and timing. As a matter of fact is not sufficient that the outcomes are positive if they are not in the interest of the company. In order to increase the value of the company a program should generate benefits that are aligned with the company main objective to aim for either the success of the program and the company. * To give an example a t-shirts company, that would like to compete on the sport sector, may be able to produce them in time and budget and sell all of them, but on another market. Still all these positive aspects do not add value to the company or move it towards its objective.
In short, the success of a program is achieved when the gained benefits are aligned with how an organisation would like to improve. Consequently, the Benefits realisation management may be fundamental for the purpose of a successful program and achievement of the business strategies.*
What is BMR and why is it important?
The Benefits realisation management consist in a series of processes that aim to ensure that a program outcomes will increase the value of the stakeholder and the company. Moreover this method measure the value that will be added and manage the possible risks of during the progress of the program. The BMR plays a critical role in a program management. In fact, it allows the manager to understand the impact that the program will have and its importance for the organisation. Furthermore it helps the program manager to recognise the amount of resources and effort that will be implied in the program.
First of all the BRM establish wether a program can produce value to the organisation identifying possible benefits of it. Indeed a project could have benefits that will be not aligned with the vision statement of the stakeholders and it will move the organisation towards a different direction instead of the desired one. For this reason is important during the planning to deeply understand wether the program can decrease the value gap between the current position and the desired one. In addition all the benefits should be understood as a result, due to the fact they are the main reason a program is started.
Secondly, this method point to achieve the minimum risk possible for each of the existing benefits. Indeed most of them may be compromised during the development of the projects within the program, therefore is enormously important keep monitoring and managing the benefits even when the program has started. Indeed, the intermediate benefits, that the projects within the program may produce, are as important as the final ones. Besides, the achievement of those benefits will increase the confidence on the achievement of the final benefits. Most of the time benefits are dynamic, hence monitor them may decrease the risk related to their acquirement. Besides, a risk structure of the benefits should be created in agreement with the risk appetite of the company. Further more the benefits realisation management has the purpose to increase the possibility to gain new benefits. Indeed, during the development of the project new possible benefits could arise and more value may be added by them inclusion.
Finally, is important that whatever will be the outcome of the program, it will be adding value to the organisation and the stakeholders. Indeed the goal of the benefits management is to ensure that the developing program will have a positive impact on the business.
This three different phases can be identified respectively as: Identify benefits, Execute benefits and sustain benefits.
The Benefits realisation management allows the manager of a program to link the reasons of the project with the impact that its delivery will have on the business.
The crucial reason to implement the BRM in a program is to move forward to the achievement of the business principal goals. Indeed a successful business is made by consecutive successful programs and projects. To identify what success looks like in a program the knowledge of business goals is necessary. Indeed, knowing the objectives of the organisation and the positive outcomes of the program, the decision of how many resources use on it or wether prioritise it or not become easier.
Furthermore, although the program structure may change during the execution, the BRM ensure that the benefits will be achieved whatever the program produce.
The management of the benefits is a crucial aspect in the program management. In fact the positive outcomes of a program (benefits) are the main reason behind the investment. If one can ensure to have the benefits and, besides, these benefits are aligned with the goals of the company, consequently, the possibility that the program will be a success increase.
Most of the time an improvement is due to a change that occurred in a organisation. As a matter of fact the only way to produce benefits is through a change, correspondingly to change a company needs to realise the benefits of the change. Hence, to implement and motivate a program is of great significance to identify its benefits.
Even though the benefits are one of the many criteria to decide wether a program is valuable or not, the BRM allows to measure how valuable a program is.
In addition, since the resources of an organisation are not unlimited, the use of benefits realisation management can improve the quality of the choices in a program. Indeed if a company know from the beginning of a program that the positive outcomes are not oriented with the vision statement of the company, it may avoid the implementation of resources in a wrong direction. As a consequence of this both the misuse of resources decrees and the right path of success is reinforced.
Benefits Realisation Management Framework
As introduced in the previous chapter the Benefits Realisation Management consist in three main phases through which it is possible to identify, manage and ensure the benefits of a program. Each of these stages may also implement the use of one other methods and techniques that at the time will be briefly described.
Identify Benefits
The purpose of this first step is to comprehend if the benefits of a program are aligned with the business plan of the company, in order to bring value to the company. Besides, the analysis of the individualised benefits will improve their further managing. In order to pursue the right benefits a deeply understanding of the business case of the organisation.*****
As just mentioned before, the benefits should be identified and qualified through a process of analysation using all the available informations about the program.
Different tools can be used to quantify, plan and give a profile to these benefits such as: benefits register, benefits map or a benefit profile. To better understand the point, the benefits register will be introduced.
BENEFITS REGISTER: It is a document that include and list the benefits of the program and is used to estimate and share all the benefits that are going to be delivered throughout the program, form its beginning to the end. The benefits register should be update during the benefits analysis and planning. In fact, a first development of this document is written during the identification of benefits, then an update with the stakeholders is necessary to determine the measures and key performance indicators that will be used. In order to grasp whether the program will be adding value to the organisation is important to classify this benefits in terms of time and life span. For this reason, the timing and the dependencies of each benefit should also be identified and communicate. Indeed, this practice will help the monitoring part to understand whether a benefit will be on time and what could be the problems that affect it .
BENEFITS MAP: The benefits road map is a representation that relate the benefits with all the elements around them that have a cause-effect relation with them. The map shows the dependencies of those benefits, including outcomes which failure have an impact on the benefits, even though it could be negligible for the program.
BENEFIT PROFILE:
Is a brief description of the benefit and its main characteristics. Informations such as what is the benefits, who is the beneficiar, the timing and the criteria to measure it are written and explained in this document.
In this phase of the Benefits realisation management the key performance indicators (KPIs) should be pointed out. Those are indicators that will help the managers of the program to follow the actual state of delivery of the benefits during the developing of the program and they will allow him to compare these result with the planned ones. As well the decision of the future monitoring and controlling process should be developed in this stage.
It is critical that the stakeholders or the sponsor of the program approve the benefits that arise from those studies. Besides, the communication plan of these benefits future progress is also established. A deep analysis of the stakeholders and their idea about the benefits should be developed. The benefits distribution of stakeholders matrix may help with this task.
[[File:IMMAGINE LIBRO**** ]] Once all the benefits will be identified and classified, the attention will move to understand if these positive outcomes of the program are something that is needed from the organisation. The task consist in realise wether they are relevant or not for the vision statement or the business goal of the company.
As more information arise is also important define the possible positive and negative risk related to the identified benefits. To give examples of these risks, they may be the disagreement from the stakeholders, unexpected outcomes or change in program activities.
Execute Benefits
In this part of the methods the manager will guarantee the minimum risk for each benefits previously outlined and, in addition to this, he will focused on the discovery of possible new benefits that may be gained.
One of the first step on this stage of the Benefits Realisation Management is to confirm that the stakeholders have deeply comprehended the positive outcomes of the program and how they are going to affect in a positive way the business. This will ensure that when the benefit will have been delivered they will see it as an earned value. Furthermore is important that the stakeholders will act in harmony with the benefits of the program, therefore they should be aware of the dependencies related to these benefits.
Besides, even the team, that is working with the program, should understand the importance and the impact of these benefits on the business of the company. In fact, they are the people that are more involved in the program delivery and changes.
The process between the benefits analysis and planning and their delivery is not a linear process. Indeed it is most of the time an iterative process, in which corrective action are continuously necessary as the planned conditions change. This information about the environment come from the continuous monitoring of the organisation. The progress of the benefits has to be continuously reviewed to realise if some change in the program activities may be needed to move the actual positive outcomes closer to the expected one. Besides, the progress can be monitored using the previously defined measures and key indicators. During all the duration of the program is critical that benefits will be continuously reviewed to better reflect the ongoing business objectives. This will avoid that benefits, identified before a program beginning, will be no longer an adding value for the company at the moment of the delivery.
In fact, it is possible that with the development of the project the business goals of the organisation may change. For this reason is critical monitoring and controlling whether a formerly identified positive outcome is still adding value to the company.
Moreover, the manager should realise, through the the risks and KPIs related to other part of the programs (such as financial, safety…) , whether these affect or not the benefits delivery. On the contrary, the impact, that the benefits’ delivery may have on the program or on the company, should be implemented in the general issues and risk management.
The stakeholders must be informed about the progress and delivery of the benefits.
Is also critical seek the opportunity for new benefits to be implemented in the program benefits list as the program advance or a change occur. Indeed during the program evolution new opportunity may arise and is important to be proactive and ready to gain that positive outcome
Sustain Benefits
The last part of the Benefits Realisation Management ensure that regardless of which is the program outcome it will still be adding value to the organisation, even though the program is ended. In point of fact is necessary that even when a program is closed, its positive outcomes are sustained and managed to keep adding value and this is possible through the use of some techniques.
First of all, the benefits sustainment should be considered prior the end of the program. Most of the organisation with a great experience in BRM used to define a plan of sustainment in the beginning part of the program. In fact, even though this plan regards a period of time that is outside the one of the program life cycle, the program manager has the responsibility to create the above.
More specifically, a benefits sustainment plan should be created before the end of the program, and it should include all the risk, the measure and the tools to guarantee that the delivered benefits will be continuing generating value. The importance of a quality sustainment plan lies on the fact that after an end of a program the management of the benefits pass to other people. Consequently, the more the plan is clear and competently developed, the better the new organisation will gain from those benefits.
Moreover, once the program finishes is critical to effettuate a post-program evaluation. Indeed it can give important and useful informations. Firstly, is important to comprehend wether the benefits have been greatly update and optimised with the stakeholders and efficiently delivered. Secondly, the lessons that the team group or the manager have learned during the program development should be really understood and shared. Indeed, the only way to avoid the same errors in the future programs benefits realisation management, is that the lessons are deeply comprehended by all the interested people.
Furthermore, the new benefits gained during the execution phase, the ones that were not planned, have to be collected and comprehended by all the involved people.
Besides, in some case, beyond the program, new benefits for the future may be identified. If it occurs they would have to become a part of the future positive outcomes of the organisation.
Some of the activities that may help the sustainment of the benefits are:
Implementing the right changes to make sure that even though the resources used for the program will be back to the organisation, the positive outcomes performance will be monitored.
Monitoring the risk defined in the sustainment plan for the delivered benefits and implement the right changes if needed.
Limitations of Benefits Realisation Management
It is now more clear what is the benefits realisation management, why is important and how to best perform it. However, sometimes its application could be more difficult and complicated in comparison to how it appears. The main limitations of this method are related to:
BENEFITS: As just was previously mentioned, the benefits are sometimes uncertain and unquantifiable. If the program contains many of those working with the benefits realisation management could be really laborious and complicated. However, an analysis of those benefits, still will help the organisation in the program success better than if the benefits realisation management would have not been done.
STAKEHOLDERS: An other possible limitation that may be arise during the use of this method is a discrepancy between the stakeholders visions. Indeed benefits may have different impact on different stakeholders, hence some of theme may not shared the positive effect of an outcome and consider them as a dis-benefits. In this occasion this stakeholders will try to oppone themselves to the program to avoid it impact them negatively. If these benefits will arrive at unacceptable level for those stakeholders, they could be a threaten for the program itself. It is critical to find a way to reduce the impact of this dis-benefits, in order to decrease the risk of failure of the program.*****
In short Benefits Realisation Management requires experience and practice, but a correct use of it can really make the difference in the success of a program.
Annotated Bibliography
Project Management Institute - The standard for program management (2017)
Chapter 4- This chapter “Program Benefits Management” briefly introduce the concept of benefits and their importance. Further, it analyse the main activities conducted during a benefits management operation. Some of the techniques introduced in this article are deeper explained and analysed in this chapter.
Carlos Eduardo Martin Serra-Benefits realisation management (2016)
Chapter 1- Introduce the concept of benefits realisation management and present an overview on why it is a powerful instrument for a program success. Moreover, in this book are presented many case studies to better comprehend how the benefits are managed in real programs.
Project Management Institute - Benefits realization management framework (2016)
These slides present an overview of the method that was discussed in this article. They were used as a guide line for the structure of the method.
PMI - Benefits Realization Management: practical guide (2019)
This book was mainly used to clarify some of the concept that need a deep understanding. In particular this book was used to understand the tools used in benefits realisation management and theirs template. Further, the book explain the BRM and outlined the different use among project, program and portfolio management.
Axelos- Managing Successful Programmes (2011)
Chapter 7- "Benefits Management”, this chapter introduce the management of the benefits and outlined the main approach and phase in dealing with them. In this chapter were analysed and deeply comprehended the Identify, Execute and Sustain phases. The chapter offers more detailed approach of this three part and the techniques previously introduced.
