Demystifying Benefits Realization
It’s always a thrill to see one’s name in print … especially, these days, in an actual book you can hold in your hands! So I was happy to note the release last month of The AMA Handbook of Project Management, Fifth Edition, which is co-edited by PM Solutions’ own editor-in-chief, Jeannette Cabanis-Brewin. (More about this book here.)
Jeannette tapped me to write a brand-new chapter for this edition on benefits realization management, a topic which is trending as one of the top concerns and areas for improvement in the project management field. Here’s a sneak peek at my take on this crucial practice area:
Why do companies exist? What is the purpose of projects? These might seem like obvious questions, but when we consider that most corporate strategies are never implemented, we have to wonder if the answers are clear. A 2012 Gartner CFO Advisory Forum report about portfolio investment success rated revealed that only 25% of projects considered to be transformational for the organization’s future achieved success. They pinpointed a major cause of this poor performance as the “failure of organizations to adopt a discipline to maximize the business value of projects and investments.”
To put this in perspective: imagine if only 25 percent of what you bought at the grocery store turned out to be edible. On the family level, no one would put up with this kind of waste and disappointment for very long! On the corporate level, it’s a wonder that company shareholders are not rioting in the streets. And of course, these figures do not apply only to publicly traded companies: small businesses, nonprofits, and public institutions are plagued by the same depressing rates of failure. This should be a wake-up call: organizations must adopt “a discipline to maximize the business value of projects and investments,” and the sooner, the better.
What is that discipline? Obviously, we feel it is project management … and that project management includes benefits realization, not as an add-on, but as an integral piece of our processes. To go back to my original question, Why else do projects exist?
For this chapter, I drew heavily on multiple research efforts we have done at PM College over the past decade, interviewing leaders of project management and training functions within organizations to discover how … or if … they measure the success of initiatives. These findings were the basis of more than one white paper PM College has produced, including one focused on benefits realization (you can also view a webinar about this topic here). I called the chapter “Benefits Realization, Demystified” because it’s our view that it really is not necessary to develop brand new processes and models to begin tracking benefits at the project level. We just need to redefine “success” as delivering identified benefits; and then keep benefit realization in mind throughout the project processes and phases … and beyond.