The big problem with understanding the benefits of a project is that the benefits happen after the project has finished.
That’s normal, and expected. So why is it a problem?
The problem is that once the project has finished, the project governance structures fall away. There is no project manager tracking and reporting, no PMO involvement, no regular steering group meetings challenging results and providing oversight. All of this disappears.
Benefits realization and management falls to the job of the people who have inherited the project’s deliverables. In many case they’ll do a good job of doing something with those and achieving some, if not all, of the benefits noted in the business case, but they aren’t set up to regularly track and report back on the results. That’s not their job.
It is, however, a major area where the PMO can add value and provide quality data about the success of project initiatives.
What’s Your Benefits Management Approach?
Before you start work on integrating benefits management and realization under the umbrella of your PMO, it’s important to understand what the organisation wants from benefits tracking.
PMI’s PMO Frameworks document says that the function of benefits realization is often found in enterprise, company-wide, strategic level PMOs. That’s because benefits realization, tracking and reporting is most often linked to portfolio management. If your business does not yet use a PMO for portfolio management, you may have to adapt your approach slightly to let you focus on what you can achieve. Always make sure that you link this back to the expectations of senior management so that they are clear about what benefits work is possible at this point in the life cycle of your PMO.
Even if you aren’t operating an enterprise, mature PMO, you can still incorporate a benefits-friendly approach into the work you do. Start by creating a culture where project managers look beyond the project closure document and consider how the deliverables of their projects will be used in real life. By making decisions throughout the project that always have the end users and the end results in mind, the company overall will find it easier to get benefit from the solution that is delivered.
Setting Up The Systems
Putting the effort into tracking benefits is only useful if someone is going to do something with the information. Ideally, your benefits systems should produce data that helps managers make decisions, much like all the other systems within the PMO.
Benefits tracking should flag problems early, for example, when a project isn’t going to hit the targets set out in the original business case. That gives managers the time to swoop in, provide corrective action and get the work back on track – or as a bare minimum, reset expectations to what is realistically going to be achieved.
However, successful benefits realization goes further than simply producing reports and forecasting trends – although if you start there you’ll already be in a great position to be managing your company’s resources more effectively.
Ideally you’ll also want to be blending benefits realization with the rest of your portfolio management approaches. For example, if the data show that the result of a project is not going to meet its benefits targets over three years as planned, you’ll have a hole in the company results. The Finance team have used those benefits forecasts to plan the company’s financials going forward, and now you’ve identified that there is going to be a gap.
As well as sharing that data with the team who needs to know, within the PMO you can proactively work to identify other projects that might have a revenue impact that would make up the shortfall. Or you could look across the portfolio at projects that are forecasting to over-achieve their benefits. Or you could review the risk opportunities across multiple programs and see what could be exploited to help rebalance the numbers.
Longer Term Results
Managing benefits isn’t something that you can switch on overnight. Projects take time to produce results that allow you to collect benefits data. It’s a big job to move to PMO software and processes that simplify producing complex reports.
You can take some small steps today to bring a benefits focus to your PMO such as:
- Updating project template to include detailed benefits information
- Providing checks and balances during the project life cycle to assess whether the project is on track to achieve the stated benefits
- Creating a culture where benefit to the organization is more important than ticking off tasks on a project schedule.
But even if you do these, a holistic approach to managing and tracking benefits is a long term objective and something you’ll need to work on over time. You might even choose to get help doing so because it’s probably not something that you’ll have internal expertise in.
The good news is that once you’ve decided to incorporate benefits realization as a role for your PMO, it’s relatively straightforward to build a plan to get you there.
Scaling Up for Benefits
The first thing to consider on your journey is that PMOs aren’t often set up with the aim of managing benefits – that’s the role of a mature PMO and something that most organizations decide to build up to.
When the time comes (and it will for you) then you might have to consider scaling up your team and processes to enable your PMO to support benefits management. First plan to get the initial framework in place in terms of resources, software, systems and processes, supported by a strategic vision and senior executive buy-in.
Once you start to add a benefits realization lens to the work of your PMO, your management team will wonder how they ever managed without it.