How to Drive Measurable Impact Through Benefits Realization and OKRs

The realization of benefits is why investments are made. Sounds obvious, right? Yet, for many, benefits realization management and how it relates to projects is still seen as a low priority.

Let’s break down that first sentence to understand its implications. It contains key ingredients that should not be neglected.

• First: what is meant by “benefits”? Benefits refer to the impact of change and something that someone understands as an advantage. Think about sales increases, reduced costs, or efficiency gains.
• Then: “realization of” means it’s not enough to identify the benefits we’re after; we must ensure they materialize. Hence, we require tracking with a target, a baseline, and a due date.
• Next: “reason”; this keyword drives a mindset shift from business-as-usual to value-as-usual. By reason, we’re referring to the drive or motivation; ultimately, this is the “why” that leads to what happens next. Now, let’s return to the real world: how often have your projects been initiated without clear identification and mapping of benefits? Where do you then have that tiresome exercise of conjuring a list of benefits to put in the business case to justify the project? Exactly.
• Finally: “investments”; sometimes we are so entangled in daily projects that it’s easy to forget that they are much more than a schedule, status reports, and progress meetings every Friday. Projects are investments. Every time an organization decides to do a project, they’re investing money, people, and time. It has an inherent cost but also an often hidden opportunity cost. If you invest in something, you expect to receive value from it. And that, my friend, is what we call benefits.

A lot could be said and written about benefits realization management. However, we’ll focus on that first sentence. It may look simple, but what it means can be revolutionary!

1. Make it a principle: principles refer to the pillars of what someone believes to be a truth and are the basis for organizational (and project) culture. They are more important than any pretty benefit trackers you can put together; if people don’t acknowledge or believe in the “why”, the “what” quickly becomes a routine, tick-the-box activity in which people don’t find any value. Instead, when it becomes a principle, benefits drive the selection of projects, not the other way around.
2. Make it stick: never lose an opportunity to position your project management culture as benefits-led. That means more than just printing some pretty posters and putting them on a wall or delivering a thorough course on the theory and practice of benefits realization management. Use what is already at your disposal to build the new mindset, from making benefits a standard topic at meetings to identifying champions in the different departments to ensure that governance, assurance, and reporting mechanisms are in place to drive transparency and accountability. The culture should allow for honest conversations about benefits while enabling capabilities to manage benefits. Start with “why”, and the rest will follow.
3. Make it a priority: what percentage of your portfolio of projects has realized their intended benefits? Many organizations do not know what they are getting from their investments and throw money down the drain. One may even think they have unlimited resources and deep pockets. We know for most that is not true, but unfortunately, people start to pay attention if they feel pressure where it hurts. Stories (and lessons) are important, but numbers, like money wasted, impact decision-makers the most. Make no mistake: if you frame it right, it will be impossible not to make it a priority.

Adopting a benefits management approach early will help develop a credible business case and foster future benefit stakeholder engagement. It will also ensure that project planning and design focus on the objectives and benefit outcomes instead of the technology or project deliverables.

“Outcome: The results obtained through portfolio, program, and project outputs.
Output: The expected deliverable of a portfolio, program, or project.” (PMI, 2020)

One of your first actions should be facilitating a workshop with known key benefit stakeholders to identify the predicted benefits, clarify expectations, and obtain business buy-in. Once you have identified the high-level benefits, specify who will receive each benefit by name, role, function, or geographical area. If possible, quantify how many people will benefit, e.g. thirty administrators from Human Resources or the whole organization (approximately 12,000 staff).

Don’t forget to identify high-level disbenefits, defined as, “A consequence of change perceived as negative by one or more stakeholders” (APM Body of Knowledge, 7th edition). For the business case to be viable, your identified disbenefits mustn’t outweigh the identified benefits.

Also, remember to set SMART project objectives (Specific, Measurable, Achievable, Relevant, and Time-bound) to avoid misinterpreting your organization’s goals.

For benefits that can be measured, identify how you want the organization to evidence that they have been realized. Engage with benefit stakeholders to collect baseline measurements so that you have some data for comparison. For example, if you want to reduce overhead costs by 10% for the next five years, you should obtain data available for this financial year and a reasonable number of previous years. To increase staff satisfaction, consult the latest staff survey report for key metrics.

”Tangible Benefit: A benefit that can be measured objectively based on experience.
Intangible Benefit: A benefit that cannot be directly measured objectively and instead relies on a proxy or representative, measure, or evaluation.” (PMI, 2020)

Where appropriate, cite your organization’s strategy documentation to demonstrate how your business case aligns with the long-term vision and goals. In addition, interdependencies with inflight or planned change initiatives should be considered. For example, your project could leverage benefits realized by another program, or your project may create a disbenefit for another change initiative.

In the next stage of the plan, create tasks and target dates for completing detailed benefits planning. Also, identify the support you need to develop the associated artifacts. For example, you may request that a Business Analyst join your project team.

You can move to the Definition Stage if your business case is approved.

Once your project has moved to the Definition Stage, work with your team to ensure that benefits management is embedded in the heart of the project. One way to do this is to refer to the process in what you document for your project roles and responsibilities. All team members should agree to be responsible for identifying and communicating any emergent benefits or disbenefits and logging any risks that could impact the planned outputs.

“Emergent Benefit: An unexpected benefit that arises during or after a programme, a project, or within the context of a portfolio. Also known as an unplanned benefit or unanticipated benefit.” (PMI, 2020)

This stage calls for detailed benefits planning. Depending on the size of your change initiative, you might receive support from business analysts to facilitate workshops with benefit stakeholders and document key information in benefits management artifacts, such as the benefits register.

“Benefits Register: A repository in which benefit profiles are recorded. This may be used in aggregated ways at different levels of the organisation to fit its needs.” (PMI, 2020)

Populate your benefits register with the planned benefits and relevant information you documented in the business case, and include any emergent benefits in the future. Once created, you must maintain this document throughout the benefits management process. Otherwise, there is a risk that the register will become out of date very quickly.

Categorize your benefits by benefit vs disbenefit, tangible versus intangible, financial versus non-financial, planned versus emergent, direct versus indirect, internal versus external, the stakeholder groups impacted, and strategic alignment. These categorizations can be used to organize your benefits and for communication purposes.

Once you have gathered the basic information required in your benefits register, engage with your stakeholders to analyze and further develop the benefits profiles.

“Benefit Profile: A description of the benefit, its intended beneficiaries, and criteria for its realisation. This is a component of the benefits register.” (PMI, 2020)

In each profile, provide the following:

• What: Describe the benefit your organization will offer once realized.
• Who: Determine who will gain (or lose) from this (dis) realized benefit.
• How: Decide the method for delivering and measuring this benefit’s success.
• When: Declare when the business should expect to measure this benefit.

Agree on roles and responsibilities with your benefit stakeholders so that everyone can understand their duties during the project and post-project. For benefits management to be successful, you must secure a long-term commitment from your stakeholders to undertake enabling activities, take measurements at the agreed frequencies using the appropriate methodology, and provide timely reporting to senior management.

“Benefit Owner: The individual or group accountable for direction, related decisions, realisation, and sustainment of benefits throughout the organisation’s benefits realisation management life cycle.” (PMI, 2020)

Therefore, each benefit should be assigned an owner to take accountability for these activities, and their names should be included in the benefits profiles. Typically, a benefit’s owner will come from an area of the business impacting the benefit. That way, they should be invested in the change. Once you have assigned a benefit owner to all benefits, ensure that you obtain their sign-off for the contents in the benefits register and its supporting profiles to establish ownership and avoid any later confusion about items such as the measurement methodology or target and forecast values.

Once your benefit owners have validated the contents in the benefits register and accompanying profiles, you should prepare a benefits realization management plan.

“Benefits Realization Management Plan: The planned activities, timeframes, and criteria for achieving one or more planned benefits or group of related benefits.” (PMI, 2020)

In this plan, supply a list of all your project’s benefits. For each benefit, consult your project management plan for the tasks to produce the planned outputs and enable the desired outcomes for the realization of benefits. In doing so, you will incorporate your project plan with the benefits realization management plan. Consider creating a benefits traceability matrix to help map your benefits to your outputs. Don’t forget to include key dates and names of assigned resources to demonstrate that you have planned for the project team to deliver the change required.

“Benefits Traceability Matrix: A grid that maps the planned benefits to portfolio, program, and project outputs. This is a benefits realization management plan component and may supplement the benefits register.” (PMI, 2020)

Identifying the dependencies between benefits, changes, and enablers can help the benefits owners and the project board prioritize in the future.

In addition, refer to your benefits register and profiles to prepare a benefits realization schedule. Include key dates and quantify the resources required to support the benefits monitoring, realization, and sustainment activities. That way, there shouldn’t be any nasty surprises later.

Share your benefits realization management plan with your benefit owners and stakeholders so that they can validate it and provide their support. Inevitably, you will be handing this plan over to the benefit owners at project closure, so they must be on board.

Together with your benefits register and benefit profiles, take your validated benefits realization management plan to the project board for approval. If the business case is still viable, you will be ready to move to the Delivery Stage.

Once your project has moved to the Delivery Stage, your team will be ready to develop the project’s outputs and manage change. Continue to engage with benefit owners so that you can update them on progress and retain focus on the intended uses for the outputs being delivered.

Consult your benefits register regularly, especially when you are identifying/raising new:

• Risks
• Issues
• Dependencies
• Emergent (dis)benefits
• Change Requests
• Exception Reports

Benefit owners and the project board must be informed of any (potential and actual) impact on benefits before they can prioritise the scope, accept changes to the benefits profiles, and agree on a way forward. If the benefit owners and project board determine that the benefits no longer outweigh the costs, the project may be terminated early.

Whenever the business accepts any changes to the benefits, you must update the living benefits management documentation accordingly. Do this immediately; otherwise, there is a risk that you may misinform key project stakeholders in the future.

As and when you produce more outputs, review them against the agreed success criteria. Typically, this involves some testing. Meeting success criteria will increase the chances of the project’s benefits being realised. Identifying missed criteria as early as possible may allow the project team to change the outputs before the outputs are due. However, the project team must alert the benefit owners when one or more outputs risk not delivering the desired benefits.

Once all outputs in scope have been produced, prepare for the Handover & Closure Stage by ensuring that all your benefits management documentation reflects the present day.

Before you close your project, arrange a meeting with your project team, benefit owners, and other appropriate business stakeholders to hand over your project’s outputs. You must ask your stakeholders to confirm that the outputs received meet their expectations for use in business as usual.

During this meeting, hand over the project’s finalised benefits management documentation to your benefits realisation team, your sponsor, benefit owners, and key business stakeholders. They should reaffirm their commitment to carry out the post-project activities detailed in the plan. You must also present this documentation to the project board so that they can provide a sign-off on the final project version.

Before your project team disbands, ensure that you collect and document all lessons learned. These lessons could be helpful to other projects and programmes in your organisation when facing similar benefits management challenges.

In your project closure documentation, ensure that you detail all the outputs your project has delivered, partially or not. This will help your organisation identify and communicate the benefits it can(not) achieve post-project.

Provide an evaluation of all the benefits in your benefits register. Determine if they are likely to be achieved post-project. Share the rationale for partially delivering and not delivering specific outputs. Use your project’s decision log to reference changes in scope, time, cost, etc.

Also, identify appropriate remediation actions. For example, some partially delivered outputs could be developed further as part of further investment.

Once a project is approved for closure, it is expected in larger organisations that the project manager and their delivery team will move on to other projects and not continue their involvement in the final stage of the benefits management process: post-project. However, the project sponsor should remain involved because they are accountable for the realisation of benefits.

This is also known as the extended project lifecycle. In this stage, the benefits realization team begins monitoring, realization, and sustainment activities outlined in the benefits realization management plan.

During this stage, benefit owners shall fully own the project’s outputs. They enable benefits realization, primarily by encouraging their teams to use the outputs for their intended outcomes.

Benefit owners are likely to be senior people in the organization. Therefore, they may delegate and oversee some of their responsibilities, such as measurement capture. They must closely monitor their teams’ progress to ensure that measurements are recorded promptly in the benefits register.

“Benefits Realization: “The practice of ensuring that benefits are derived from outputs and outcomes.” (APM Body of Knowledge, 7th edition)

The benefits realization management plan should indicate when to review the listed benefits, typically after a reasonable period of time. Sometimes, multiple reviews are required to reflect the number of years that benefits have been forecasted.

An independent facilitator should conduct this review. Your organization may dedicate an assurance function to conducting these reviews. The organizer and facilitator should ensure the benefits realization team completes the review. Additionally, all benefit owners need adequate time to record and share measurements before the meeting is scheduled to take place.

The benefits realization team will come prepared for the review to provide progress updates and share lessons learned. The facilitator will determine why there are variances between the actual measurements and those forecasted.

After the review, the facilitator produces a report. This evaluates the team’s effectiveness and performance, records lessons learned, highlights benefits not realized by the plan, and recommends actions for the team. It will be circulated to the benefits realization team and senior management for broader review.

The benefit owners will manage any recommended actions. Subsequent benefits realization reviews may be used to assess the team’s performance in following through with these actions.

Where benefits are forecasted to be realized over a series of years, the benefits realization team’s performance mustn’t dip at any point during the post-project stage. Otherwise, there is a risk that benefits may not be fully maximized.

“Benefits Sustainment: The ongoing activities performed by the benefits owners and beneficiaries to ensure the continuation of outcomes and benefits achieved through portfolio, program, and project outputs.” (PMI, 2020)

The benefits realization team can analyze its performance through appropriate monitoring and measurement. Dashboard reporting can help the business visualize the benefits register and determine which benefits are at risk.

Once the post-project stage has ended, the benefits realization management plan should be completed. Each measurement should have been captured, analyzed, and reviewed. If you conducted multiple reviews, a post-benefits realization management report should be written to summarize findings and recommend further action.

Continue professional development:

• Join the Wellingtone Benefit and OKR workshop
• Managing Benefits™ Foundation & Practitioner (APMG Accredited)
• Professional Certificate in Benefits Management and Business Acceptance (BCS Accredited)
• Professional Certificate in Benefits Planning and Realisation (BCS Accredited)
• Ask Wellingtone to conduct a PMO & P3M3 & Project Management Maturity Assessment
• Join the APM Benefits and Value-Specific Interest Group (SIG)
• Network with your peers at the FuturePMO Conference

References:

• Bradbury, P., Jamil, T., Mills. C, Shermon, D. (2019) APM Body of Knowledge, 7th edition, Buckinghamshire, Association for Project Management.
• Paul, D. and Cadle J. (2020) Business Analysis, 4th edition, Swindon, BCS, The Chartered Institute for IT.
• Project Management Institute (2019) Benefits Realization Management: A Practice Guide, 1st edition, Pennsylvania, Project Management Institute.