Episode 370: Benefits Realisation for Project Managers. An Introduction. (Free)
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Here is the first sentence in Mark Langley’s foreword of the in-depth report Delivering Value - Focus on Benefits during Project Execution, which PMI published as part of it’s Pulse of the Profession Series:
A project is truly successful only if it delivers the benefits an organization envisions.Mark Langley, PMI President and CEO
At first glance this sentence is awfully obvious to us project managers. But having good and successful benefits realization management and thereby turning this statement into a reality is what makes our job so hard. And rewarding.
So what exactly are benefits realisation and benefits realisation management? Is there a benefits management process and how does all of this fit into project benefits management?
How about if I let Dave L Davis (https://www.linkedin.com/in/dldavispmp) explain it all to you? He has authored one of the articles in that Pulse of the Profession report from where I took the earlier quote. The article is titled “The Benefits Management Journey” and serves as our guide.
We’ll learn what exactly benefits realization management is, review the process of implementing it on projects, meet the people involved, and we’ll even talk about tools.
And at the very end of this episode you’ll learn that even failings project have benefits
Below are the first few pages of the transcript. The complete transcript is available to Premium subscribers only.
Cornelius Fichtner: Hello and welcome to Episode #370. This is the Project Management Podcast at PM-podcast.com and I’m Cornelius Fichtner. A project is truly successful only if it delivers the benefits an organization envisions. This is the first sentence in Mark Langley’s foreword of the in-depth report titled “Delivering Value Focus on Benefits During Project Execution” which PMI published as part of its Pulse of the Profession series.
At first glance, this sentence, “a project is truly successful only if it delivers the benefits an organization envisions” is awfully obvious to us project managers but having good and successful benefits realization management and thereby turning this statement into a reality is what makes our job so hard and rewarding. If you are a project manager who wants to become PMP or PMI ACP certified, then the easiest way to do is so is with our sister podcast, the Project Management PrepCast or the Agile PrepCast and study for the exam by watching the in-depth exam prep video training from PM-prepcast.com. What exactly are benefits realization and benefits realization management? Is there a benefits management process and how does all of this fit into project benefits management? How about if I let Dave Davis explain it all to you? He has authored one of the articles in that Pulse of the Profession report from where I took the earlier quote. The article is titled, “The Benefits Management Journey” and serves as our guide. We’ll learn what exactly benefits realization management is, review the process of implementing it on projects, meet the people involved and we’ll even talk about tools. And now, do failing projects have benefits? I’ll tell you all about it at the very end of the episode. But first, please enjoy the interview.
Project Management Podcast feature interview today with Dave Davis, Project Manager for General Electric Brilliant Factory
Cornelius: Hello Dave. Welcome back to the podcast
Dave Davis: Thank you.
Cornelius: Our topic today is benefits management. I don’t think here on the podcast we’ve actually talked about benefits management with anyone else, you’re the first one and so let’s start relatively basic here with my first question. Why is benefits management important and also how will our listeners and their project benefit from our discussion here today and yes, pun fully intended with that question.
Dave: [laughs] I got it. Gosh. That’s such a intricate question and there’s so many different tangents I can take from it. First of all, I don’t think it’s any more “important” today than it has been in the past. It just is as organizations have matured, they’ve become pretty good for the most part of handling the triple constraint so the projects we’re doing were getting good at. But are we doing the right projects and that’s where I think the benefits realization / management comes in. Are we doing the right things and we used to, pretty well in the past, I’ve been in the business for over thirty years and cost benefit has always been a term but it’s just been that cost versus benefit which is usually determined very quantitatively in some sort of monetary return. But benefits management, benefits realization, however we want to phrase it, is trying to look beyond just the financial benefits being returned back to the organization. It’s looking at different tangible and intangible things and giving a handle on those and trying to come up with what is our best overall investment return for a company, it’s what’s making benefits management and benefits realization much more important.
It also does bring in a time factor when you start to realize some of these benefits but the thing that I find exciting with benefits management and why it is getting so much attention is that it’s going on, as I said, just beyond financial aspect. It’s really what is my company going to be able to do in the future that we can’t do today? It is a benefit to be able to expand capacity to be able to do more things with the same resource you have or gained some efficiency productivity enhancement. But now that we have this digital world and instantaneous customer feedback, these benefits “capturing” things, which is a net promoter’s core. How likely is a customer to recommend me to another person and those types of metrics and benefits are becoming much more a part of the equation of the overall value of are we doing the right thing?
I think with benefits, what’s driving hard with benefits attention now is not just the ROI and did I spend $2 to get $3 back? But did I spend $2 not only to get more money back. Did I get my name promoted in the way I want? Did I get my corporate image the way I want it to be? Did I get my message to a certain target audience? Is my brand being positioned the way I want it to be done? Truly expanding that type of work beyond just a deliverable and outcome and capability of the projects and other thing that I think that’s making it more important, true benefits management realization has to be enterprise-wide. With IT, doing it is kind of a tail-wagging dog and just as an investment in an IT product to capability and it can deliver certain amount of productivity, etc. But as I said, if we look at what can a company do in the future state that they can’t do now, that becomes an enterprise-wide equation and we’re putting discipline around that and that’s what I find exciting about the whole benefits realization ideal.
Now why do we care of a project? How do I benefit from them? I want to go a little bit in the PMI standards here and how it fits and then we’ll go into it. Benefits is considered at a program level. It’s in the PMI hierarchy between portfolio program and projects and it’s kind of the bridge between strategic investment and tacticl implementation. What really becomes the factor from a project level which is a tactical implementation is what benefits I’m delivering back to the business from the outcomes and capabilities this project delivers. And then you need to start make decisions as a new decision-making model on my change request and other things in the project. How do they impact the benefit we’re bringing back to the customer or to the organization, I should have said. So, the triple constraint’s still there but now let’s look at triple constraints through a lens that says, “What’s the benefit?” You can’t do that unless you have a good benefits model. Do you know what you’re trying to get? Did you forecast whether it’s coming back to you? And those things all factor together, so being able to answer that question back to your stakeholder not only just how does this affects my schedule, (my edit out) scope and my cost but how does it impact the benefit that we’re trying to give to the organization. That’s a pretty powerful mindset.
Cornelius: OK. Thank you very much, that’s a wonderful overview here. Let’s make this a little bit personal because you said that you’ve been in the business for about 30 years. We’ll learn in a minute that you have actually recently written about benefits management but how did you personally get involved with benefits management and your interest in it.
Dave: It’s been several years but I was involved with—I had a long career with AT&T for 25+years and was involved in the foray into electronic bonding between major customers and that electronic bonding, in a nutshell, is if the customer has an application and we have an application that do similar functions. For example, in telecommunications if you have a network issue. The big customer probably has their own help desk that’s tracking down people that are having problems on their network and AT&T has the same tracking down the (problem in the) customer network. In the past we pick up the phone, call each other, we key it in, etc. They had a system that tracked their trouble. The trouble we had at AT&T, a system tracked their trouble. Build an application interface so if something is found in the AT&T network, they can immediately notify the customer electronically that something’s down and the customer knows without having to call in and have that verbal exchange and we (key in redundant data real time) have a sharing of the application information.
As I started to work on that and help develop ROI models to persuade customers to invest in an enhancement to their application so we could talk electronically to a supplier application or we also involve semantic services and there’s some big contracts etc. To be able to put together the story of what the benefit was of doing this is when I started beginning into looking beyond the, as I’ve said, just the financial impact and what’s the value of being able to be proactively notified that there’s a hiccup going on in your network. That started getting me involved in the early part of the 2000 and that expanded a little bit, a little bit more. I’ve been very active in PMI. PMI then introduced version 1 of the program management standard and that just clicked with where I was in my career at the time as far as working on helping to define this value propositions with customers to do electronic bonding. It just sort of evolved into that to get a better understanding that I talked about before the program management standard which actually can be used to get a program manager’s certification a PGMP, of which I think I was the 27th PGMP in the country. I’ve been involved in this from a while I’m going back but those things started to work together and it has become a foundation for a lot of the work I do nowadays. Being able to present with customers. let’s think beyond just the productivity savings and what does traditional time management and stopwatch click on and off, we’re now starting to look enterprise-wide. What are some more things we can do? That challenge of evolving the business was very instrumental. Are we getting more engaged?
Cornelius: Based on everything that we’ve heard and talked about so far in the interview, can you summarize maybe what the goal of benefits management is?
Dave: Yes and actually I’m working with PMI right now and I’m letting the cat out of the bag for the upcoming PMO conference later on this year. PMI is going to have an information kiosk available but one of the products in there will be sort of just an overview of where benefits fit in and to get people aware and interested and I’m a little knowledgeable on benefits management so I look forward to that and at a (website) near you or at the conference. But in a nutshell, what it is is I have a current state and I want to get a future state what do I need to get there? What is my future state going to look like and why is it worth my spending resources to get there? Then you look at that and say OK over time I’m going to forecast what my benefits are and I’m going to know said expectations for when I should start to realise this back and I go back to the things that we said – is it the right thing to do? One thing that probably everybody would agree with is over the last couple of years the number of demands of enhanced and/or work-improved business has not gone down. It’s getting larger and larger managing that funnel and that pipeline becoming more and more of a challenge and we probably know several companies that invested in the wrong thing and are no longer with us today because they invested in the wrong thing or didn’t know that. Not to pick on anybody in particular but I think Blackberry is a good example of a company that kind of didn’t make the right investment decisions and came too late. So this, “Am I investing in the right thing” is where the benefits is becoming more and more important. Then if I, OK, I’ve invested in the right thing, do I now have a govnence model that I evaluate minor control when I’m getting is this still worth keeping the investments going? Am I getting back what I expected or if I discovered new things that whole idea of “Okay we do things right for the most part but now we need to do the right things”.
Cornelius: You published an article in PMI’s Pulse of the Profession. It’s called the Benefits Management Journey and in that article, you discussed three areas on how to do benefits management. They are Plan and model of benefits, Align the plan with the stakeholders and Realize the benefits. Why don’t we, on a high-level, look at each of this three and you can tell us a little bit more about them. So let’s begin with the first one here. Plan/model the benefits. What do we do here?
Above are the first few pages of the transcript. The complete transcript is available to Premium subscribers only. Please subscribe to our Premium Podcast to receive a PDF transcript.