Benefits Realisation Management (BRM)

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.