Your project is completed successfully. That means it has benefited the organization, right? Not necessarily.
Just because you have your deliverables and have finished the project as planned doesn’t mean it’s bringing value to the business. But there is a way to ensure that your initiatives do deliver real benefits to the organization: Benefits realization management.
Benefits realization management (BRM) ensures you carry out the most effective projects. BRM practices are proven to be effective in successful strategy execution and show you how benefits can continue even after the project is completed.
The enterprise PMO plays a crucial role in BRM, creating long-term value and supporting change management. The approach should be at the heart of any project portfolio strategy.
Learn why benefits realization is key to PMO success and how shifting focus from outputs to outcomes leads to real strategic impact.
What Is Benefits Realization in the Context of a PMO?
Benefits realization means extracting and articulating benefits from a portfolio, program, or individual project. It can be both qualitative and quantitative. For example, how much money have you invested and earned? Have you met consumer needs? Have you improved efficiency within your organization?
BRM ensures that you’re realizing true value. It connects the concept of project prioritization to long-term value creation and supports change management.
So, what does benefits realization for PMOs involve? The project management office is responsible for evaluating project value, not just at the beginning of the cycle but throughout and even after the project has been completed. Taking a BRM approach indicates that you are prioritizing the right projects and deriving tangible and intangible benefits from them.
This framework informs your PMO strategy for both the present and future, helping you improve. Ultimately, it allows you to see whether your expectations for your project have actually come to fruition.
How Does BRM Differ from Project Delivery or ROI?
Benefits realization management is one approach to measuring project outcomes and value. It focuses on maximizing project value within the larger organization and ensures you are aligning projects and portfolios with the goals of your organization.
Project delivery and ROI also play an important but different role in confirming that your projects are contributing to your organization’s goals. Project delivery focuses on deliverables: It establishes that you are carrying out your projects as planned and producing the intended results. This is the actual work you’re delivering.
Meanwhile, ROI assesses the profit of your investment in the project and its overall contribution to your business. It measures and quantifies profitability to ensure efficiency and effectiveness.
Project delivery and ROI are still important. But they alone don’t convey the advantages your projects are bringing to the organization.
Pain Points Benefits Realization Management Addresses
“We’re delivering projects, but leadership doesn’t see the value.”
Executives don’t connect projects to real benefits. They focus on outcomes over processes and holistic organizational benefits. They don’t see the effort and resources going into projects or connect them to overarching strategies and business goals. Leadership is also unaware of real challenges involved with projects.
“Our PMO is seen as tactical, not strategic.”
The organization fails to analyze how project strategies define and impact the overall organization. You measure project success by deadlines, not business impact. There is minimal focus (or zero focus) on overall impact and long-term success. This is not sustainable.
“We need better KPIs that reflect actual outcomes.”
Traditional KPIs aren’t always consistent. They can lead to reactive rather than proactive plans and may fail to contextualize the project. They aren’t reflective of the benefits, just the deliverables, and don’t focus on future improvement. These metrics can be too simplistic as well.
Advantages of Benefits Realization Management
Aside from value realization for PMOs, benefits realization has holistic advantages for the entire project portfolio management strategy and the overall organization.
Delivering Real Benefits
A benefits realization approach helps you contextualize projects and ensures that projects and the overarching project management office are delivering benefits, not just completing projects. This allows you to meet your goals.
Better Project Prioritization
BRM changes project prioritizing, allowing you to focus on the initiatives that are delivering the most value for the organization. It contributes to better resource management. This approach leads to more effective and efficient project alignment and budget allocation. Ultimately, it allows you to allocate resources to the projects that will benefit the organization the most.
Alignment with Business Needs and Objectives
Benefits realization gives stakeholders a clear understanding of the value projects are delivering and how they aid the overall organization. With project alignment, you’ll make better, more strategic decisions when managing projects.
A Future-Driven Approach
This approach ensures you’re building a foundation to ensure value in the future. It helps the organization learn lessons and move forward, backed by data. You’ll focus on long-term, rather than short-term, success.
How to Improve Project Outcomes Through BRM
The Project Management Institute identifies three steps to implementing a benefits realization management strategy:
- Identify benefits
- Execute benefits
- Sustain benefits
Of course, the process is more complex and involved.
First establish and define goals, benchmarks, and milestones. Identify key benefits and KPIs you want the project or portfolio to produce. Your objectives should be measurable.
Next, create an action plan with the activities necessary for realizing these benefits. Include timelines, resources, and budget baselines. Being detailed will help you prevent scope creep and other issues like cost overruns.
Measure and monitor progress throughout the undertaking, using KPIs as indicators of success in terms of delivering the expected benefits (not just the expected results). Analyze the data and results collected post-project completion to evaluate the benefits.
Gather feedback through methodologies like surveys or interviews, as well as quantitative data, to evaluate whether the project or portfolio has delivered the intended benefits. Use this data to inform your strategy going forward with future projects. Remember to continuously monitor and adjust your BRM strategy, refining it wherever necessary.
Tools and Approaches
There are several established tools and approaches to use when implementing a benefits realization approach. For example, the Benefits Dependency Network (BDN) is a visual tool that depicts the relationships and effects of various activities to demonstrate how a project will impact the overall organization.
Another approach involves using guiding questions, such as:
- How will the project make our organization more efficient?
- Who are the anticipated users?
- What is the expected impact and value?
These are just a handful of techniques that will help you ensure a successful benefits realization process and project pipeline.
Using Prism PPM to Manage BRM
Prism PPM software provides a centralized location for tracking projects, collecting data, and measuring outcomes. It helps you stay focused on benefits realization for every project, as well as across all projects:
- Project prioritization — realizing the greatest benefits for the org starts with understanding which projects to prioritize and safeguard
- Resource management — ensuring the right people, skills, and other resources are available when needed, keeps projects from stalling out, delaying benefits
- Risk registries — collaborating on risks that might hinder project success is the best way to keep everyone focused on realizing benefits
Our solution allows you to demonstrate the value of BRM—and the power of managing across your entire portfolio of projects—to your stakeholders and organization. With the ability to better prioritize projects and allocate or reallocate benefits to real resources, you will be better prepared to adjust your strategy as you receive and visualize information and facilitate change management.
Tracking the Right Metrics
When implementing BRM, what project success metrics should you use? What metrics or KPIs best support benefits realization?
You should evaluate the benefits and establish metrics and KPIs for each intended benefit. There are many examples of metrics to use:
- ROI: Return on investment, or the financial gains compared to the cost or investment
- Cost versus benefits
- Time to value
- Customer Satisfaction Score (CSAT)
Note that you should use a combination of metrics to gain a holistic view of the benefits you are achieving through your project portfolios. Continuously track these metrics and KPIs to ensure that your projects are contributing to organizational goals.
Challenges with Benefits Realization
Benefits realization is an essential approach to ensuring project value, but it has some challenges.
First, bear in mind that BRM alone will not help you achieve project benefits and organizational goals. It must be used in conjunction with other approaches to measuring performance and results. You still need a set of solid PMO KPIs and other leading and lagging metrics to track progress.
In addition, stakeholders may be reluctant to rely on the PMO. It can be difficult to shift an organizational mindset that has relied on outcomes rather than processes. That’s why you need to demonstrate the value of BRM and explain how it benefits the entire organization, ensuring that they see the value in an iterative process that drives intended results and improves over time.
Benefits verification—measuring outcomes to confirm the project has achieved what it intended to—is another challenge. You must be proactive rather than reactive, putting a data collection strategy into effect early on. Gather ample data, both qualitative and quantitative, to demonstrate the case for the initiative.
Also, understand that this is not a short-term approach. It needs to be an ongoing effort and must be refined and adjusted to ensure long-term success.
Conclusion: How can a PMO shift its culture and mindset to focus on outcomes?
Benefits realization allows you to change your culture and mindset, not just your individual project strategies and approaches. It’s more than just outcome-based project management; it’s a way to rethink and reevaluate your entire approach to creating value for your entire organization.
Prism PPM helps you facilitate benefits realization, honing your processes to bring about real change. Learn more about our platforms and how they foster a data-driven mindset and approach.