Benefits Realization Management as a key driver of Project Management Effectiveness

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. Project Management Institute.

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 equally subject of this article is BRM in the context of improving the effectiveness of the management practice within the domain of project management. 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, deliverables 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

Figure 1: Example of Potential Benefits that may be realized by an Organization. Inspired from "Benefits Realisation Management: A Practice Guide"

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. Therefore, they are measurable improvements that contribute to an organization's competitive advantage. Figure 1 displays examples of potential benefits that may be realized by an organization. As depicted in the figure, the range of realized benefits can be fairly broad. Hence, it is important to identify potential benefits before the commencement of a project to add value to an organization. Furthermore, benefits can be categorized in the following groups:

Tangible or Intangible Benefits

• Tangible benefits are measurable based on evidence i.e. a company may execute improvement efforts to directly reduce costs that are connected to providing a given function

• Intangible benefits are not measurable objectively as they rely on a substituting measure representing them i.e. customer satisfaction or a company’s image

Planned or Emergent Benefits

• Planned benefits are also referred to as anticipated or expected benefits meaning that they are intended gains chosen and approved by the Benefits Realization Management in place i.e.

• Emergent benefits are unexpected benefits that may emerge across the lifecycle of a project. They may have a significant impact on the perception of success of a project. i.e. the increased engagement of an organization in community activities may improve the public perception of the organization leading to an increase of its sales.

Direct or Indirect Benefits

• Direct benefits can be measured as a result of realizing benefits as defined before the start of a project i.e a customer service expands additional call centers in several time zones to better handle the incoming calls across these time zones. The increase in the capacity of the call centers is a direct benefit of the company’s expansion.

• Indirect benefits are derived from direct benefits. They may occur both planned or unplanned. Picking up on the previous example, the call center expansion may also result in an increased employee satisfaction as they are supported in better and more timely responding to incoming calls.

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 the best use of the given resources whereas effectiveness is referred to doing the right things meaning 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 overall 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, within-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. Even if benefits have been identified before the commencement of a project, 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.

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