Each season, it tops the delegate issues agenda and this year’s #gartnerppm conference in London is no exception.
Without an effective benefits realisation process, it is difficult to measure the business impact of projects, the contribution made by the PMO to achieving strategic goals or to justify ongoing expenditures and investment in PM maturity initiatives. According to PwC, only 62% of programmes can demonstrate a relationship between project objectives, company strategy and the resulting benefits. This is an essential aspect of strategic portfolio management to master and this article outlines 5 ways to improve benefits realisation in your organisation.
A continuous lifecycle
The first thing to understand is that benefits realisation is not a single step, but a process that can be sub divided into lifecycle components. This starts with the planning of anticipated project benefits and concludes with understanding how a project has not only been concluded successfully, but has also contributed as expected to strategic objectives.
Secondly, there needs to be an initial baseline against which benefits can be measured. Without it, there is nothing to compare and track. For instance, taking operational efficiency as a simple example and target to improve that can be measured, how long does it take to generate reports today? If getting the monthly reporting pack out takes a week to prepare, use this as the baseline and then by putting in the right sort of assistance to create reports in a day, you can easily see what the improvements are.
The diagram below created by Serra & Kunc, 2015 illustrates the complexity of all the inter-relationships very well as an interconnected ‘Chain of Benefits’. Starting with project outputs, how can the PMO help to steer the outcomes towards a clear realisation of strategic objectives? What needs to be in place and understood?
Firstly, the use of IT systems – PPM and EPPM software - can significantly improve measurement outcomes, through built in reporting and tracking features. IT solutions can provide the PMO with a clear view of the interdependencies between portfolios, programmes and projects. It is also possible to utilise integrated PMO dashboards and control sheets to support improved decision making, monitoring, reporting and measuring. Before IT can contribute at this level, foundations need to be in place.
These are as follows:
The five foundations for successful benefits realisation
- Benefits realisation needs to be an integrated part of the whole project management process and built in from the outset. It sounds obvious, but projects should be started with a clear view of what ‘success’ looks like – and all too often this isn’t present at the planning stages. Together with PwC, we recommend creating a framework from which to measure the achievement of strategic objectives at a high level, including how project governance and metrics will be applied
- Stakeholders at all levels need to be engaged to avoid a disconnect between strategy and operations. Using PPM software makes this significantly easier to achieve, by providing a central communications portal through which all aspects of the projects can be recorded, tracked and measured. At the top of the organisation, the C-suite needs to understand the strategic benefits and those who manage outputs at a tactical level should be able to see that their individual contributions are on track to achieve the required changes.
- A benefits dependency map helps to ensure the right stakeholders and decision makers are both engaged and aware of their involvements. Who needs to do what, when, why and how. This helps to crystalise how project goals will link to wider strategic objectives.
- What are the project objectives?
- What are the measureable end outcomes?
- How can project outputs be transformed to business outcomes?
- What specific deliverables are required?
- Identify what is important to measure and how to go about it. One key aspect of this is to ensure that all the stakeholders are equally engaged to be able to agree a common starting baseline for measurement. This ensures that future disputes about what benefits have actually been realised are avoided.
- Communicate the proposed benefits realisation plan widely. How this is achieved will vary between organisations but there needs to be a consistent way to communicate how benefits are being achieved with all the stakeholders, in a way that is relevant to them. For example, Network Rail achieves this using a graphical benefits tracker and visualisation boards, with clear accountability and ownership at each stage.
It is important that organisations try to embed benefits realisation into their project and portfolio management and to make it as scientific as possible. This means having a clear view of the ‘why are we doing this’ at the outset and creating a set of processes, which can be supported by software tools to take away any subjectivity and make it objective and clear for all stakeholders to appreciate.