Benefits Realization Methodology: – Most project managers believe that a project is a success when it has met its objectives and has been delivered on time, within budget and allocated resources. They believe their mission is complete once the closing report is completed. Yet, the work is not quite finished.
Too often, the product or service provided is never used or put in place by the customer. And this is a real frustration! This is partly due to the lack of time, energy and enthusiasm of the team or company that issued the project, which is often too busy to tackle the big new project that follows. The truth is that most projects considered successful have never provided the results or benefits originally planned.
The solution to this problem is called Benefits Realization. This methodology provides organizations with a means of measuring the value of their projects to the company that uses them. It has been developed to help organizations effectively manage the benefits of their projects.
One of the main reasons why organizations undertake changes is to get profits. A benefit is a positive and measurable impact of change. Benefits are defined as tangible improvements (money saving, job creation) or intangible (reputation of the company or improvement of employee morale) that are quantifiable and measurable, which are generally expressed in financial or resource terms, thus justifying investments that the organization might need. Profits are the result of the success of a project and represent the value created for the project sponsor or its beneficiary. This post is all about the benefits realization methodology.
Principles of Benefits Realization Methodology
The Benefits Realization methodology is a process that realizes, prepares and manages the expected benefits through change.
In order to measure the benefits of a project, Benefits Realization provides a set of questions and good practices that guide project management professionals by enabling them to:
- Identify the project benefits that are necessary to achieve the strategic objectives. These are generally defined in the business case (business case.
- Implement profit management to minimize risks to future profits and maximize the chances of obtaining additional profits;
- Maintain profits to ensure that whatever the outcome, the project will continue to create value.
Process of Benefits Realization Methodology
Here are 6 steps for implementing the Benefits Realization methodology.
- Create a Profit Management Strategy
Establish outlines that determine how your project will achieve the expected benefits and how these profits will be managed. How will you measure these benefits? Who will be in charge of this task? How long will you set up a profit tracking?
- Identify the Benefits and relate them to the Objectives of the Project
Benefits must be aligned with the organization’s strategic objectives. They must be measurable and quantifiable. You should also define how these benefits will be monitored and measured (indicators and KPIs) and when they should appear.
As for the tasks of your project, the benefits have dependencies. Determine the factors on which the benefits of your project depend. What are the benefits of your project? How do they all come together to deliver a coherent change?
- Plan when Profits will Appear
In the same way that you plan your tasks on a schedule, plan when your benefits should appear. Some deliverables will have immediate benefits while others may take longer before you begin to see tangible results. If it is expected that profits will appear after the project is completed, you must determine who will be responsible for recording and tracking. It is important to link this step with the profit management strategy.
- Set up Profit Management
It is now time to implement change and make these benefits possible.
- Look at the Benefits
Analyze expected benefits and actual results. Do I have to change trains? Are your departure plans still valid? Make sure that the benefits are always in line with the goals and strategy of the organization, and follow their progress.
- Identify new profits and Adjust Existing Profits
Part of the ongoing project management (or the role of the profit manager if the project is completed) is to see if the change can result in new benefits. Is there anything else that has been identified as a positive improvement to the project results? What improvements can be made to optimize current benefits?
It is up to the project manager to work closely with the client to ensure that the product or service delivered is adopted and properly integrated into the organization and that the organization can benefit from the benefits generated.
As soon as the project is launched, you must implement a profit-making plan. It is a document that presents the tasks necessary to achieve the expected benefits. This document sets out a timetable and the tools and resources needed to ensure that the benefits will be fully realized over time.
In the profit realization plan, we find:
- The various benefits associated with the project;
- How you will achieve each benefit;
- How you will manage the realization of benefits, specifying how to integrate them into the organization;
- The processes and the various indicators implemented to monitor the realization of the benefits;
- Means of communication and risk management;
- The roles and responsibilities required to manage profits.
The goal of a project is to create a new product or service. But what the customer really wants is the benefits that the new product or service will bring. Hence the importance of clearly identifying the expected benefits from the start of the project. Make sure that the expected benefits will be put in place at the end of the project through the Benefits Realization methodology.