Every project manager understands how hard it is to measure project success. Imagine that you take on a project to build a house for your customer, and deliver it on time and on budget. What you can’t foresee is that after one month in the house, the customer moves out because of several problems. Will you call that a successful project? If your answer is “yes”, then this article is all you need to become a competent project manager.
Many project managers associate the success of a project with the time and budget spent on that project. All they need is a project that is delivered on time and on budget. Sounds logic, right? However, projects that are defined successful regarding traditional aspects (e.g. time, scope, cost, quality, etc.) often fail to deliver the benefits for which they are guaranteed. It turns out that you can concisely achieve your project success by measuring the benefits that a project or program delivers. That means the success of a project or program underlies in obtaining the benefits.
In this article, we will discuss what Benefits Realization Management is, how it can help organizations, and what project managers do in Benefits Realization Management.
WHAT IS BENEFITS REALIZATION MANAGEMENT?
Before investigating further into this aspect, let’s recap those following terms that will be used a lot in this article.
- Outputs: the new products or services delivered by the project
- Objectives: the results to be achieved after a project concludes
- Benefits: the tangible or intangible value created for the project sponsor or beneficiary as a result of the successful completion of a project
Benefits Realization is the tool to ensure that benefits are reaped from project outputs. The purpose of Benefits Realization is to maximize the actual return on investment (ROI) from change regarding the realization of intangible or non-financial benefits (such as risk reduction and customer satisfaction).
Benefits Realization Management includes the activities of managing benefits during the project life cycle: Identify, Execute and Sustain. This should be elaborated as:
- Identify benefits: to determine the likelihood that a project, program and portfolio can produce defined business results.
- Execute benefits management: to minimize risk and maximize opportunities to derive extra benefits.
- Sustain benefits realization: to ensure that projects or programs continue to create value.
(to be continued)
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