Enterprise Benefits Realisation Management. Managing the creation of strategic value to the organisation

Transcription

1 Managing the creation of strategic value to the organisation Project Management in Practice 14 th February 2017 The presenter: Carlos Serra MSc in Program and Project Management (University of Warwick / UK), Masters in Project Management (UFRJ/ Brazil), BSc in Production Engineering (CEFET/ Brazil). Certified PMP- Project Management Professional (PMI), APMP- The APM Project Management Qualification (APM- UK), Prince2Foundation & Practitioner (Axelos/APMG), MCTS : Managing Projects With Microsoft Office Project(Microsoft). 16+ years experience in Project, Program and Portfolio management in Brazil and United Kingdom, having worked for Exxon Mobil, Petrobras, Lloyd s Register Energy and Gazprom Marketing & Trading; Lecturer for MBA programs, conferences, events and organisations; Author of academic articles and white papers; Reviewer for the International Journal of Project Management; Author of the book Benefits realisation Management: Strategic Value from Portfolios, Programs, and Projects, CRC Press. 1

2 Agenda Benefits Realisation Management and Project Success Key principles for benefits realisation Business success Enterprise Benefits Realisation Strategy Organisational Environment Pillars BENEFITS REALISATION MANAGEMENT AND PROJECT SUCCESS Presentation Title 2

3 How can project success be assessed? Project Success can be perceived in different ways depending on the criteria. Final or Overall perception Success on project management performance Schedule Goals Required Outputs Budget Goals Success on creation of value to the business Adherence to the Business Case Expected Outcomes Undesired Outcomes Return on Investment Source: Carlos Serra [6] How can benefits management influence project success? 100% Generation of strategic value to the business Project Success Business Case (49%) Expected Outcomes (44%) Return on Investment (42%) Undesired Outcomes (37%) Project Management Performance Schedule Goals (26%) Strong Influence Required Outputs (23%) Budget Goals (18%) Weak Influence 0% Utilization of Benefits Realization Management Practices 100% Source: Adapted from Carlos Serra [5] 3

4 Findings from PMI Pulse of the Profession In-Depth Reports on benefits realization Identify Benefits to Drive Results Focus on Benefits During Project Execution Sustain benefits to optimize business value ( ) projects are undertaken so that benefits will accrue. Those responsible for authorizing projects mainly executives are also responsible for ensuring that benefits are delivered. The topic of benefits (..) is the primary shared interest between project managers and business executives. Organizations that invest in benefits realization identify a significant role for project managers, especially during project execution. Organizations that more fully realize benefits engage crossfunctional teams. Organizations that successfully deliver on strategy have the right tools and processes in place to monitor and measure benefits. Organizations with high BRM maturity invest in the discipline and establish its value organization-wide. Organizations that commit to the transition and sustainment activities highlighted in the report perform better. Organizations that are more mature with BRM ensure they sustain benefits over time by establishing clear communication and encouraging robust dialogue ( ). Source: Project Management Institute [8] Source: Project Management Institute [9] Source: Project Management Institute [10] KEY PRINCIPLES FOR BENEFITS REALISATION 4

5 Key principles for benefits realisation Benefits are improvements Benefits add value to the business Benefits realisation is manageable Carlos Serra Benefits are improvements The quantifiable and measurable improvement resulting from completion of deliverables that is perceived as positive by a stakeholder. It will normally have a tangible value, expressed in monetary terms... that will justify the investment. Source: Association for Project Management [4] A result of actions and behaviours that provide utility, value or a positive changefor the beneficiary expected. Some benefits are relative certain, easily quantifiable, and may include concrete or finite conditions, such as the achievement of an organisation s financial objectives or the creation of a physical product or service for consumption or utility. Other benefits may be less quantifiable and may produce somewhat uncertain outcomes" Source: Project Management Institute [3] 5

6 Benefits add value to the business Desired Value Benefit 4 Business Value Desired Value (vision) Benefit 3 GAP Current Value Benefit 1 Benefit 2 Current Value Process of change Time Current Value Project Outputs Project Outcomes Benefits Desired value Source: Adapted from Carlos Serra [6] What does Benefits Realization mean? To Realise means: 1 -To become fully aware of (something) as a fact; understand clearly. he realized his mistake at once 2 -To cause (something desired or anticipated) to happen.. his worst fears have been realized 3 -To make (money) by selling something... I realized $60k on the sale of my apartment (Benefits) realization is a process to make benefits happen and also to make people fully aware of them throughout the entire process of realization in order to ensure the creation of strategic and measurable value to the business. Carlos Serra 6

7 Benefits realisation is manageable Benefits Realisation Management (Bradley, 2010; OGC, 2007), Project Benefits Management (Melton, et al., 2008) and Benefits Management` (Jenner, 2010) are terms regarding a set of a set of practices Source: Carlos Serra [5] needed to ensure that programs, projects, portfolios, and day-to-daybusiness operations work together in a meaningful and organized way to realize the benefits required by the business strategies to perform a meaningful and sustainable creation of value. Source: Carlos Serra [11] Benefits realisation is manageable: Benefits realisation lifecycle Value Planning benefits Typically Programme and Project Delivery Traditional focus on Benefits Realisation Realising benefits Benefits Realisation Strategy Benefits Reviewing and measuring benefits Timeline for change Source: Carlos Serra, adapted from Peter Glynne and Mark Stubbs [2] Organisational Benefits Realisation Management Carlos Eduardo Martins Serra, BSc, MSc, PMP 7

8 Essential practices identified bythe PMI Pulse of the Profession In-Depth Reports on benefits realization Identify Benefits to Drive Results Focus on Benefits During Project Execution Sustain benefits to optimize business value LINKING benefits identification to both project and programme management. ESTABLISHING benefits identification as a shared responsibility between an organisation s executive leaders, business owners, and project professionals. ALIGNING identified benefits to the organisation s strategic goals. SUPPORT the role of project managers in benefits realization management. ENGAGE cross-functional teams to fully realize benefits. PROVIDE the right tools and processes to monitor and measure benefits. CARRYING OUT post-project evaluations. CAPTURING and SHARING of lessons learned. MAINTAINING strong crossfunctional communications and engagement. MONITORING and MEASURING benefits performance and reporting results to key stakeholders. SUPPORTING evolving user needs and product improvements. DEVELOPING business cases for future initiatives to address operational needs. Source: Project Management Institute [8] Source: Project Management Institute [9] Source: Project Management Institute [10] Benefits Realisation Management Key Definitions Outputs Products delivered to the business by projects that enable new capabilities or promote required changes to existing capabilities. Outcomes Improvements resulting from the changing process, which can most times be understood as being new capabilities or as enhancements made to existing capabilities. Benefits Benefits Realisation Benefits are measurable and quantifiable improvements, which are normally expressed in financial terms, so they can justify any investment that may be required from the business. Benefits Realization is a process to make benefits happen and also to make people fully aware of them throughout the entire process. Benefits Realisation Management Benefits Realization Management is a set of a set of practices needed to ensure that programs, projects, portfolios, and day-to-day business operations work together in a meaningful and organized way to realize the benefits required by the business strategies to perform a meaningful and sustainable creation of value. PMI UK Chapter Source: Adapted from Carlos Serra [5] 8

9 BUSINESS SUCCESS: THE RESULT OF A COMBINATION OF STRATEGIES Organisational Benefits Realisation Management Carlos Eduardo Martins Serra, BSc, MSc, PMP Benefits realisation management and strategy execution Investment objectives Organisational issues Business drivers Strategy execution Benefits Realisation strategy Portfolio, Programme and Project management strategies Strategic Objectives Strategic Initiatives Improvements (end Benefits) Carlos Serra Organisational Benefits Realisation Management Carlos Eduardo Martins Serra, BSc, MSc, PMP 9

10 EBRM: LAYING THE FOUNDATIONS FOR STRATEGY EXECUTION Enterprise Benefits Realisation strategy Business strategy Strategic drivers Strategic objectives End benefits Strategy execution Selection criteria to deliver the end-benefits Governance process to ensure realisation of the end-benefits Ideas Benefits realisation Initiatives to be implemented Changes required Programme & project Delivery Business Success Carlos Serra 10

11 ORGANISATIONAL ENVIRONMENT PILLARS: STEER, RUN & CHANGE Organisational Environment Pillars: Steer, Run & Change Governance Governance Generate value to shareholders and society Organisation Programme and Project Management Manage business change Programme and Project Management Business Process Ownership Carlos Serra Business Process Ownership Manage business performance (BAU) 11

12 Organisational Environment Pillars: Steer, Run & Change Competence Governance Generate value to shareholders and society Organisational capabilities demand the adequate levels of competence from de workforce Technical skills Soft skills Organisational Capabilities Programme and Project Management Manage business change Business Process Ownership Manage business performance (BAU) Carlos Serra Which are the key roles involved in benefits management within an organization? Group of roles Description Provide executive leadership. Program and project governance Ensure strategic alignment. Give prioritization and support. Deliver the required outputs. Program and project management Satisfy the stakeholders needs. Be aware of their projects success criteria. Maintain the alignment between project and expectations. Own the business processes. Benefits ownership Receive project outputs. Realise the required benefits. Source: Carlos Serra [3] 12

13 CHALLENGES TO ORGANISATIONS IN MANAGING BENEFITS Challenges to organisations in managing benefits Low levels of competence/qualification to the production of business cases and to the identification/measurement of benefits. Culture of assessing success based on the delivery (performance), not by long-term results and the contribution to the overall business strategy. Lack of integration between processes/departments (e.g.: portfolio management, operations management, project governance and change management). Gap of specific processes for managing benefits when an organisation is delivering products/services to its external customers. Lack of benefits realisation strategies on corporate level, what contributes to a lack of processes in place for managing benefits realisation after program and project close-out. Source: Carlos Serra [5] 13

14 ADDITIONAL RESOURCES, REFERENCES, Q&A Presentation Title Additional resources Benefits realisation Management: Strategic Value from Portfolios, Programs, and Projects, CRC Press Programs/Serra/p/book/ Award winning paper available for free download from APM UK website: rlos_serra_apm_postgrad_student_award_2 012.pdf Research article available for free download from ScienceDirect (Elsevier / IJPM): /pii/s Other resources available for free download from the author s blog Projectizing.com: 14

15 References [1]: APM, Glossary: Benefit, Association for Project Management, available on 12/10/14 at [2]: Glynne, P. & Stubbs, M., Benefits SIG Scottish Conference, Association for Project Management, available on12/10/14 at: [3]: PMI. (2013). The Standard for Program Management (Second ed.). Newtown Square: Project Management Institute, Inc. [4]: PMI. (2014). Pulse of the Profession. Project Management Institute. [5]: Serra, C. E. M. & Kunc, M., Benefits realisation Management and its influence on project success, project governance, and execution of business strategy -Analysis of Brazil, the United Kingdom, and the United States of America, Project Management Institute, available on 12/10/14 at: Summary-EngUS.ashx [6]: Serra, C. E. M. & Kunc, M., Benefits Realisation Management and its influence on project success and on the execution of business strategies. International Journal of Project Management, Issue [7] Serra, C. E. M. (2015). Benefits Realisation Management and Strategic Project Success -Analysis of UK, USA and Brazil. London, Project Management Institute. [8] PMI. (2016 ). Pulse of the Profession in-depth research. Strategic Impact of Projects: Identify Benefits to Drive Results. Project Management Institute. [9] PMI. (2016 ). Pulse of the Profession in-depth research. Delivering Value: Focus on Benefits During Project Execution. Project Management Institute. [10] PMI. (2016 ). Pulse of the Profession in-depth research. Beyond the Project: Sustain benefits to optimize business value. Project Management Institute. [11] Serra, C. E. M. (2016). Benefits Realization Management: Strategic Value from Portfolios, Programs, and Projects. CRC Press. Common Questions Question What do we call benefits? What are benefits expected to add to the business? What does benefits realisation mean? How can the benefits realisation be managed? Which are the key roles involved in benefits realisation management within an organisation? What are the major gaps and barriers that organisations are currently facing in managing benefits? Summary Answer Strategic and measurable improvements. Increasein value. a)cause benefits (make them happen); b) become fully aware of the benefits achieved; and c) generate value. By having benefits planned, reviewed and measured, and realised, all these under a BRM strategy. I Benefits Realisation Governance; II Programme and Project Management; III - Benefits Ownership (business process owners). a)low levels of competence; b) lack of BRM strategies on organisational level; c) lack of support (and understanding) from the steering levels;d)reactive approach to strategic project management;e)low alignment between different departments and policies. Source: Adapted from Carlos Serra [7] 15

16 Questions & Answers Thank you! Organisational Benefits Realisation Enterprise Benefits Management Realisation Management Carlos Carlos Eduardo Eduardo Martins Martins Serra, Serra, BSc, MSc, MSc, PMP PMP Presenter: Carlos Eduardo Martins Serra, MSc, PMP Website (blog): LinkedIn: rtinsserra 16