Benefits Realization Management (BRM) or Benefits Management is one of the new subject areas included in the PMP Exam with the Jan 2016 update. Project Management Institute (PMI®) has been conducting extensive research on BRM for the past 2 years. In this post, we’ll learn what BRM is, what its benefits are, and where it fits in the context of project management. We’ll also look at the role of project managers in BRM and why PMI has been focusing so much on this discipline. This post could also serve as study notes for the PMP® exam.

Benefits realization management (BRM) is an emerging discipline and is not very well understood in a large majority of organizations around the world. PMI has been conducting extensive research on this subject in order to find a correlation between benefits realization maturity of an organization and success of its projects and programs. Recently they published three Pulse of the Profession reports covering benefits realization in depth. Through this post, I’m organizing and summarizing what I learned so far on BRM from those reports and other material on the subject in a manner that it aligns with the project management Process Groups defined in the PMBOK® Guide, 5th Ed.

What is the measure of Project Success?

Let’s say you conceptualize, plan, design, build a house for a customer, and deliver it on time and on budget. However, after spending just 1 month in the house, the customer moves out due to various problems. Would you call the project successful? If your answer is ‘yes’, then this post may be of particular interest to you.

Many organizations measure a project’s success by whether it comes in on time and on budget. Often times projects that are termed successful using traditional measures of success (i.e. scope, time, cost, quality etc.), fail to deliver the benefits for which they were undertaken. Very few organizations monitor and measure the benefits that projects and programs deliver. The success of a project or program lies in achieving the intended benefits (benefits realization).

What is Benefits Realization?

Benefits realization is the means to ensure that benefits are derived from project outputs.

Definitions

Before we go further, let’s review the definition of some key terms that we’ll be using throughout this article.

  • Outputs: Outputs are the new products or services delivered by the project.
  • Objectives: Objectives are the results to be achieved after a project concludes, such as a successful IT conversion, development of a new product or manufacturing process, or construction and staffing of a new facility.
  • Benefits: Project benefits are the value that is created for the project sponsor or beneficiary as a result of the successful completion of a project. Benefits can be tangible or intangible.

What is the purpose of Benefits Realization?

The purpose of benefits realization is to maximize the actual return on investment (ROI) from change, including the realization of intangible or non-financial benefits (such as risk reduction and customer satisfaction).

How can Benefits Realization help Organizations?

PMI’s research has found that project success rates have fallen from 2012 to 2016. But, organizations with benefits realization maturity have better project success rates and waste less money on projects compared to others.

Organizations tend to confuse new products and services (project outputs) and new capabilities (project outcomes) as benefits. Executive leaders fail to connect project management with achieving strategic goals. Benefits realization will help them recognize that projects and programs deliver benefits to the business and enable the necessary change.

Benefits realization is the 3rd largest driver of project success behind actively engaged executive sponsors and high alignment of projects to organization strategy.

What is Benefits Realization Management?

Benefits realization management incorporates the activities of managing benefits throughout the life of the project: Identify, Execute, and Sustain. Successful BRM consists of 3 main areas:

  • Identify benefits: to determine whether projects, programs, and portfolios can produce the intended business results.
  • Execute benefits management: to minimize risks to future benefits and maximize the opportunity to gain additional benefits.
  • Sustain benefits realization: to ensure that whatever the project or program produces continues to create value (post implementation).

Benefits Realization Management - Identify, Execute, Sustain

Let’s look at the activities involved in each of these areas.

Identify Benefits

  • Before the start of the project, identify benefits as part of the business case development.
  • Define key performance indicators (KPIs) and quantitative measures to track benefits.
  • Establish processes for measuring progress against benefits realization plan.
  • Create a communications plan necessary to record progress and report to stakeholders.

Execute Benefits Management

  • Establish a benefits realization plan. A benefits realization plan outlines the activities necessary for achieving the planned benefits. It identifies a time line and the tools and resources necessary to ensure the benefits are fully realized over time.
  • Define key performance indicators (KPIs) and quantitative measures to track benefits. Measuring the progress of benefits throughout the project life cycle can also guard against scope creep.
  • Monitor and control the project to ensure that it remains aligned with the organization’s strategic objectives.
  • Track and report project progress to key stakeholders as per the communications management plan.

Sustain Benefits Realization

  • Transition the project deliverables to the business.
  • Maintain strong cross-functional communications, engagement and sharing of lessons learned.
  • Monitor and measure benefits performance and reporting results to key stakeholders.
  • Support users and develop business cases for future initiatives to address operational needs.

Who is responsible for BRM?

Even though benefits are realized on the business/operations side of the organization, benefits realization management is a shared responsibility between project managers, business owners, executive sponsors, and senior leaders, even when a dedicated benefits owner is appointed for the project.

The continuity from project to operations can be achieved by embedding someone from the operations or strategy development team into the project team, or transitioning some project team members into operational roles.

What is the role of Project Manager in BRM?

Benefits realization is a central component of project and program management. Project managers are in a unique position to help their customers gain the benefits detailed in the business case. Emphasis should be put on engaging project managers early in the discussions around benefits analysis, alignment of projects with business strategy. The idea is that when project managers participate in such discussions, they are more likely to focus on creation of business value rather than keeping a narrow focus on project deliverables and traditional measures of success (such as on time and on budget).

Before project initiation

  • Collaborate with executive leaders and business owners in the identification of benefits as part of the business case development.

During Project Initiation

  • Validate benefits and their alignment to organizational strategy.

During Project Planning

  • Create a benefits realization plan.
  • Define key performance indicators (KPIs) and quantitative measures to track benefits.
  • Establish processes for measuring progress against benefits realization plan.
  • Create a communications plan necessary to record progress and report to stakeholders.

During Project Execution, Monitoring and Controlling

  • Monitor whether the project is on course to deliver the expected benefits.
  • Track metrics, flag and manage emerging risks, and communicate the information that executive leaders need in order to decide the future of a project if targeted benefits are in jeopardy or no longer relevant.
  • Fully understand the operational realities (such as operability, maintainability, total cost of ownership, etc.)

During Closure

  • Transition the project deliverables to business/operations. This includes knowledge transfer to business to help them derive maximum benefits from the deliverables, and avoid potential issues.
  • Share lessons learned that could impact future deliverables.
  • Update the benefits realization plan. Note that benefits realization plan may continue to be updated during the sustainment phase.

What is the role of leadership in BRM?

Executive leaders plays a critical role in creating a successful benefits management culture. They set the tone at the top by emphasizing the value of BRM. They embed that value into the organization’s culture and assign responsibility for benefits management to leaders and their teams—on both the project and operations sides of their businesses.

Conclusion

Benefits realization is a key to achieving organization’s strategic business goals or objectives. Projects and programs are primary vehicles to deliver the benefits to help meet those strategic goals. Organizations that use formal project management for benefits realization management tend to be more successful in delivering value. Benefits realization is a shared responsibility between project managers, business owners, executive sponsors, and senior leaders.

If you have any questions or comments, please post them below.


Reference:

PMI’s Pulse of the Profession reports

  • Identify Benefits to Drive Business Results
  • Focus on benefits during project execution
  • Sustain benefits to optimize business value

Harwinder Singh

I blog to learn and share what I learn.

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