Benefits Realization Management as a key driver of Project Management Effectiveness
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| − | Deliverables are the final output resulting from processing inputs over the course of a project endeavor. They are quantifiable, unique goods or services transferred to a third party upon the completion of a project which is very likely to be the project sponsor or beneficiary outside of the project. Deliverables are typically tangible | + | Deliverables are the final output resulting from processing inputs over the course of a project endeavor. They are quantifiable, unique goods or services transferred to a third party upon the completion of a project which is very likely to be the project sponsor or beneficiary outside of the project. Deliverables are typically tangible but can also be intangible. Most importantly, deliverable cannot be utilized as a metric to measure the benefits within an organization that are created by a project for it is indeed the impact of using and working with the deliverables that generates benefits. |
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Revision as of 22:32, 18 February 2019
Contents |
Abstract
Benefits Realization Management also referred to as BRM describes the concept of aligning projects, programs and portfolios to the organization’s strategic objectives by delivering measureable benefits and therefore maximizing project, program and portfolio value. BRM includes accountabilities across stakeholders to identify, execute and sustain benefits to drive strategic outcomes. Thus, it ensures benefits – meaning the value being created as a result of the successful completion of a project - are derived from project deliverables. Operating in a rapidly changing and highly complex business environment, companies find themselves in the need to generate and maintain a competitive advantage in the market. Many companies manage and assess projects, programs and portfolios in terms of efficiency based on traditional measurable outputs - such as time, quality and budget. Yet, they fail to constantly monitor whether the projects contribute to achieving the company’s overarching strategic objectives. A project may be successfully delivered in terms of time, quality and budget but it may not be in alignment of the company’s strategic goals therefore decreasing its value and not generating benefits for the company. Benefits Realization Management tackle this gap between corporate strategy and project management shifting project management towards an effective management practice by supporting support better decision making about which projects to prioritize and appropriate levels of investment. Even though Benefits Realization Management applies to project, program and portfolio management subject of this article is BRM in the context of improving the effectiveness of the project management practice. To ensure a better understanding of Benefits Realization Management the article will explore the differentiation between benefits and deliverables in light of the concept of efficiency versus effectiveness. It will continue to elaborate on the concept of Benefits Realization Management and outline its application in its main processes of identifying, executing and sustaining benefits. BRM focuses on generating benefits both tangible and intangible. Yet, the latter can be difficult to measure therefore the article will then reflect upon the limitations of the concept of Benefits Realization Management.
Benefits vs. Deliverables
It is crucial to differentiate between the terms deliverables and benefits in the context of project management for the further discussion of Benefits Realization Management.
- Deliverables
Deliverables are the final output resulting from processing inputs over the course of a project endeavor. They are quantifiable, unique goods or services transferred to a third party upon the completion of a project which is very likely to be the project sponsor or beneficiary outside of the project. Deliverables are typically tangible but can also be intangible. Most importantly, deliverable cannot be utilized as a metric to measure the benefits within an organization that are created by a project for it is indeed the impact of using and working with the deliverables that generates benefits.
- Benefits
Benefits are the advantages and gains derived from the deliverables of a completed project. Projects benefits are the created value for the project beneficiary as a result upon the successful completion of a project and are traceable back to project objectives. Benefits can be both tangible and intangible and can be categorized into four basic groups:
- Cost saving
- Overall efficiency gains
- Technical benefits
- Intangible benefits
- Effectiveness vs. Efficiency
The concept of effectiveness vs efficiency is a method of assessing and evaluating different processes. Efficiency is commonly referred to doing things right meaning that whatever is performed is being performed in an optimized way with best use of the given resources whereas effectiveness is referred to doing the right things thus making the right decisions such as selecting an output that there is a demand for.
Applied to the context of benefits realization management optimizing the processes necessary to produce the intended deliverables of a certain project may be an improvement in the efficiency of creating the project-linked outputs but it may leave an organization’s effectiveness unchanged as “[t]here is no logic in delivering a great project if it is not the right project for the organization. There is even less logic in delivering one that will fail at its intended outcomes. “
As of today, many organizations have not yet incorporated a benefits-centred approach in their project, program and portfolio management practice. Projects and programs may be completed successfully with the required quality, on-budget and on-time. However, they rarely align those projects with the business purpose due to the fact that they have failed to identify benefits before the start of projects. Delivering a project does not automatically entail the realization of the intended benefits. Thus, BRM ensures that benefits are translated into an increase in value for the organization making its management more effective as it supports making the right decisions within project, program and portfolio management.
Introduction to Benefits Realization Management
Application of Benefits Realization Management
Limitations
Bibliography
1. Benefits Realization Management: A Practice Guide. Project Management Institute: Project Management Institute; 2019.
2. Boston Consulting Group. Connecting Business Strategy and Project Management [Internet]. 2016. Available from: https://www.pmi.org/-/media/pmi/documents/public/pdf/learning/thought-leadership/connect-business-strategy.pdf?sc_lang_temp=en
3. Project Management Institute. The Strategic Impact of Projects: Identify benefits to drive business results [Internet]. 2016. Available from: https://www.pmi.org/-/media/pmi/documents/public/pdf/learning/thought-leadership/pulse/identify-benefits-strategic-impact.pdf?sc_lang_temp=en
4. Project Management Institute. Delivering Value: Focus on benefits during project execution [Internet]. 2016. Available from: https://www.pmi.org/-/media/pmi/documents/public/pdf/learning/thought-leadership/pulse/benefits-focus-during-project-execution.pdf
