Benefits Realization Management
Benefits Realization Management (BRM) may be defined broadly as the process of organizing and managing, such that potential benefits arising from investments in change are actually achieved.
Unfortunately, organizations are not very good at measuring the benefits that their portfolios deliver and they especially fall short in comparing those benefits to the money spent to achieve them. Recent surveys, circa 2005, indicated that even amongst large national or international organizations committed to project management excellence, only around 5% achieved high scores for both their approach to, and their deployment of, BRM practices.
All of this means that in a majority of organizations, critical decisions about selecting portfolio work are made without adequate information. If you allow yourself to be one of those, you, or the management that you report to, have to rely on intuition and gut feel that is obviously not founded on solid evidence. In short, you have no way of assessing the quality of your recommendations or decisions without assurance of the careful and deliberate exploitation of the products that deliver the benefits.
In IT, it gets even more complicated. Impacts resulting from changes in one product may have far reaching effects on the validity and functioning of other products and these are sometimes difficult to foresee.
Implementing BRM Practices
The following four guidelines are suggested for introducing Benefits Realization Management as an integral part of portfolio management:
- Create a benefits management structure, mandated by the Executive, that involves Portfolio Management, Project Management and Operations
- Make sure that Business Cases always include an assessment of resulting benefits as a part of their justification for proceeding
- Make selection decisions based on the premises described in the Business Cases
- Refocus the management of projects on the ability of the resulting products to produce the expected benefits.
In order to establish this new mind-set, you will see that it will be necessary to instill the following five practices:
- Responsibility for benefits harvesting must be clearly assigned to Operations. This makes sense because at this stage of the overall portfolio life cycle, Operations can make or break the success of a product.
- Portfolio managers, project managers and Operations managers must all work together. That means establishing an integrated community of interested parties as distinct from the traditional "stove-pipe" functional organization. You can use "Roles and Responsibilities" charts to help here, designed on the basis that the product planning, transfer and delivery, and benefit realization are each in the hands of those best able to contribute to achieving ultimate benefits to the organization. And you should list those "hands" by name.
- All affected stakeholders must have an opportunity to be involved in the planning of product transfer and benefits harvesting from as early as the preparation of the Business Case. This makes sense because unless the clients are fully committed from the outset, their projects are not likely to make it through the portfolio Selection to Activation processes. In fact, this is one of the important jobs of the respective Sponsor.
- A set of consistent metrics, whether direct or surrogate, must be designed for the portfolio as a whole and applied to all end products of significance. This is necessary to enable comparison of benefit outcomes to the justification asserted in the corresponding Business Case.
- Ensure that the BRM plan is clearly communicated to all those responsible. Similarly, ensure that any subsequent updates are distributed along with project status reports. You will find this is necessary to ensure that when the product is ready for transfer, the transition will ensue smoothly and without delay in commencement of benefit harvesting.
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Benefits
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