Achieving Benefits in Project and in Program Management Guidelines for Success Dr. Ginger Levin, PMP, PgMP Certified OPM3 Professional A Member of PMI s Registered Consultant Program linkedin.com/in/gingerlevin 1 Here Is What We Will Cover Benefit definitions Benefit identification The benefits realization plan Managing benefit delivery effectively Guidelines for success 2
But First... The GAO Recently it has its 90 th Anniversary! 3 Boeing 787 Dreamliner Boeing 787 4
The Sydney Opera House Exceeded Estimated 4 Year Construction Time By 10 Years 5 FDA s Center for Food Safety and Applied Nutritiom 6
However... Organizations don t do projects because they can; they do projects because they add to a strategic outcome... And those organizations that measure benefits realization understand that value. PMI s 2012 Pulse of the Profession Benefits Realization In-Depth Report 7 Here Is What We Will Cover Benefit definitions The benefits realization plan Managing benefit realization effectively Guidelines for success Parting thoughts 8
What is a Benefit??? An opportunity that provides an advantage to the organization, such as increased profits, improved operations, growth, or improved morale PMI The Standard for Program Management Second Edition, p. 309 Program management goes a step further by focusing primarily on the intended benefits and ensuring that those benefits remain at the highest level for the duration of the program (and component projects ) life cycle. Brian Grafsgaard, Program Management: A Life Cycle Approach, 2012 9 F i n a n c i a l Types of Benefits Non- F i n a n c i a l Direct, Tangible Indirect, Intangible Adapted from Williams and Parr, 2006, p. 173 10h
F i n a n c i a l Types of Benefits Reduced Costs Improved Cash Management Increased Revenue Improved Staff Morale Enhanced Customer Satisfaction Quick Access to Information Improved Processes Greater Access to Markets Non- F i n a n c i a l Improved Quality of Service Meeting Metrics/KPIs Reduced Staff Turnover Fewer Customer Complaints Improved Productivity Direct, Tangible Indirect, Intangible Adapted from Williams and Parr, 2006, p. 173 11h Now for the Next Topic! Benefit definitions The benefits realization plan Managing benefit realization effectively Guidelines for success Parting thoughts 12
Benefits Realization Plan Purpose: Ensure all program stages are managed to satisfy the utilization of the program s outputs Link outputs to the planned program outcomes Assess program s outputs Perform corrective action if needed Ensure planned program outcomes are achieved prior to formal program closure The Standard for Program Management, p. 109 13 Ways to Develop This Plan Identify the benefits Interview stakeholders Conduct brainstorming sessions Use lessons learned Look at checklists Submit drafts and obtain signoffs when it is finished!! 14
Typical Contents Purpose Definition of Each Benefit Impact of Each Benefit on Objectives Metrics for Each Benefit Process to Collect Each Metric Roles and Responsibilities Benefit Communications Management Benefit Schedule Benefit-Related Risks Changes to Processes or Systems Benefit Transition Benefit Sustainment SIGNOFFS!! Adapted from Levin and Green, 2010 15 Moving Along Benefit definitions The benefits realization plan Managing benefit realization effectively Guidelines for success Parting thoughts 16
Did we identify the right benefits? Why Is This Hard?? No one is responsible The project is over, why worry if we realized the benefits? We tried benefits management before; it did not work then, why will it work now? The benefits are too vague to quantify We had benefits in the business case, but they irrelevant when the project ended 17 Manage Program Benefits Purpose: Ensure there is a defined set of reports and/or metrics reported to the PMO, stakeholders, governance board, and/or sponsors Continuously monitor and report benefit metrics so stakeholders can assess the overall program health and take action as needed for successful benefit delivery The emphasis is to show: The program/project meets the goals of the strategic plan The Standard 18 for Program Management, pp. 66, 263
Why is This Important? about half of projects meet their original budget and schedule and contribute to the organization s strategic objectives. However that number increases to 65% as companies [become] proficient in measuring benefit realization PMI s 2012 Pulse of the Profession Benefits Realization In-Depth Report 19 How Can We Do It?? Conduct Reviews Make sure benefit delivery is not compromised Describe benefits effectively to show value Reassure stakeholders all is well Evaluate Benefits Metrics Planned versus actual benefits Do the benefits exceed their input costs? Are benefits delivered in a timely way? Perform a Benefits Realization Analysis and consider: Strategic alignment Value delivery Resource management Risk management Performance measurement The Standard for Program Management, pp. 264-265 20
Prepare a Benefits Realization Report Recognize some benefits are realized incrementally They require quantification to measure their realization Consider dimension of the benefit (the date the realization must start) Consider quantifying qualitative benefits Benefit report shows the status of projects in programs or a single project against the benefit realization plan It may lead to a program or a project to be realized, terminated, or started early It is analyzed by the team and reported to executives The Standard for Program Management, p. 156 21 Benefit Report Template Background Information Program Overview Reporting Period Prepared By Benefits Realized During the Reporting Period Benefit Description Date Realized Benefits Not Realized During the Reporting Period Benefit Description Contingency Plan Benefit Description Approvals / Sign Off New Benefits Assigned To Date 22 Adapted from Levin and Green, 2010
Use a Benefits Register Benefit identification number PWBS number Benefit description Identified by Type of benefit (tangible or intangible) Baseline date Measurement approach Reporting frequency Benefit owner Change if necessary Benefit realization date Benefit transition date Notes 23 Ginger Levin, 2012 24
Optimize Benefits Use Forecasting Earned value ETC and EAC predict likelihood of planned outcomes and consider EARNED BENEFITS Perform a Variance Analysis variances may be positive or negative consider cost, schedule, quality, issues generated, stakeholder satisfaction levels Use What if Analysis Scenario Analysis construct potential outcomes based on known facts, other risks, and current plans; identify potential aggregated effect of multiple uncertain events Perform Causal Analysis Cause-and-effect diagrams, root cause identification cause of a risk to sharpen risk definition and provide an effective proactive risk response by identifying the root cause 25 And You Thought It Was About The push for benefit realization is paying off. Nestlé became the first global food and beverage company to meet the A+ requirements for an annual sustainability report, set by the Global Reporting Institute, a not-for-profit that promotes corporate social responsibility measurements. COOKIES!! PM Network, June 2012, p. 24 26
Ways to Reduce Risks to Benefits Have direction and inspiration from sponsors Build a focus on value delivery Have an optimized program approach Manage all required resources explicitly Build an ongoing benefit emphasis Foster extensive communications Manage the program through integration of benefits, costs, risks, rewards, people, and planning Williams and Parr, 2006, p. 151 27 Considerations Each benefit will have risks associated with its realization These benefits are more than just the sum of the benefits risk from program components They involve the overall effect of interlinked project risks on benefit delivery status The transition plan focuses on how the program will transition to operations Transition activities provide for continuous management of benefits The risks associated with the transition require management The Standard for Program Management and Levin and Green, 2010 28
Set Up a Baseline for Benefits Collate key organizational, financial, and operational metrics against which improvement can be measured objectively and have a mechanism is in place to manage changes to costs and benefits. Source: Williams and Parr, p. 180 29 Prepare a Sustainment Plan Develop a sustainment plan to identify the processes, measures, metrics, and tools necessary to manage benefits beyond the completion date to best ensure the continued realization of the intended benefits (PMI, PgMP Examination Content Outline, 2011) 30
We Are Almost Done! Benefit definitions The benefits realization plan Managing benefit realization effectively Guidelines for success Parting thoughts 31 Nine Guidelines for Success 1. Foster a culture focused on benefits 2. Identify benefits in the business case 3. Prepare a benefits realization plan 4. Prepare regular benefit reports 5. Conduct benefit realization analyses 6. Conduct benefit reviews 7. Focus on ways to optimize benefits 8. Prepare a transition plan 9. Emphasize benefit sustainment 32
Last But Not Least! Benefit definitions The benefits realization plan Managing benefit realization effectively Guidelines for success Parting thoughts 33 What Has Had the Most Impact on Project Business Success?? Stated Strategic Objectives? Formal Portfolio Management Process? Benefit Realization Process? Project Team Responsible for Full Integration? High Project Management Maturity? Mature Benefit Realization Process? The PMO? PMI s 2012 Pulse of the Profession 34
What Has Had the Most Impact on Project Business Success?? PMI s 2012 Pulse of the Profession 35 What was wanted What was wanted 36
What was needed What was needed 37 What was specified What was specified 38
What was delivered 39 Thanks a lot for coming!! let s continue the conversation Dr. Ginger Levin, PMP, PgMP, Certified OPM3 Professional Portfolio, Program, and Project Management Consultant and Educator 954-783-9819 (office) 954-803-0887 (cell) ginlevin@aol.com linkedin.com/in/gingerlevin 40