Benefits Realization Management (BRM) encompasses the standard methods and processes that an organization uses for identifying benefits, executing its benefits realization management plans, and sustaining the realized benefits facilitated by portfolio, program, and project initiatives. BRM requires alignment with an organization’s strategy, a solid understanding of key principles, and techniques as described later in this article.
BRM is about capturing the business value (tangible and intangible) from a project or program or portfolio, following the completion of planned scope of work. Benefits realization is part of the accountability framework to increase the likelihood that organizations receive the intended benefits from completed components. Measuring benefits and value validate how well the portfolio governance selected the right projects and program under a portfolio.
The terms benefit and value are often used interchangeably. However, it is important to understand their differences and the direct relationship between benefits and portfolios, programs, and projects. A Benefit is defined as a gain realized by the organization and beneficiaries through portfolio, program, or project outputs and resulting outcomes. Value, however, is the net result of realized benefits less the cost of achieving these benefits, as shown in Exhibit 1 below. Value may be tangible or intangible.
Exhibit 1- Benefit – Value Equation
Benefits Realization Management and Organizational Strategy
Organizations develop visions, missions, and strategies to guide their direction. Those strategies are tied to larger, overarching goals that have associated benefits. For example, a city may have a strategic objective to improve the local economy. Some associated benefits of that strategic objective could be increased revenue from tourism, more jobs, and more attractions/facilities. Goals are then decomposed into organizational objectives that are executed via portfolio, program, and project management initiatives to deliver outputs, which result in outcomes. The outcomes then yield planned benefits that ultimately deliver the value sought by the organization. The below exhibit provides an overview of how strategy is linked to the initiatives of portfolios, programs, and projects to deliver outputs.
Exhibit 2- Connecting Organizational Strategy to BRM
Benefits realization is the intended beneficiaries’ integration of gains resulting from the outputs of portfolios, programs, and projects. The need for the integration of these gains and the resulting value to the organization serves to drive organizations to pursue more effective BRM practices. The ties between strategy, goals, initiatives and benefits are interconnected. Special care should be taken to ensure goals and planned benefits are aligned. This alignment can be facilitated using Benefits Register, Benefits Management Plan, and Benefits Traceability Matrix artifacts. Time and measurement horizons are important factors in the assessment, planning, realization, and measurement of benefits, costs, and resulting value as they vary over time. Benefits realization management is the day-to-day organization and management of the effort to achieve and sustain planned benefits arising from investment in portfolios, programs, and projects.
Benefits Realization Management Core principles
Five core principles considered as guidance for BRM within the context of portfolio, program and project management.
- NET BENEFITS JUSTIFY THE USE OF INVESTED RESOURCES
Outcomes deliver benefits against funded investments made in pursuit of the organization’s strategic goals and business objectives, for which management of the portfolio, program, or project is undertaken.
The rationale for this principle is that the net planned benefits are what justifies the sponsoring organization to use valuable resources on the effort. Value needs to take into account the benefits and the investment in the resources required to realize benefits.
- COMMENCEMENT OF WORK IS DRIVEN BY BENEFITS IDENTIFICATION
Planned benefits during development and after delivery of outputs require clear identification before the work commences. These benefits should be unambiguously articulated to all delivery stakeholders and beneficiaries.
The rationale for this principle is that delivering the expected value from planned benefits is what guides the decision making about the work to be undertaken. The value derived from benefits management should be clearly articulated so that all decision makers are able to make informed decisions regarding the work to be undertaken to eventually realize planned benefits.
- PLANNED BENEFITS ARE AUTHORIZED VIA DOCUMENTS
All planned benefits should be estimated, verified, and agreed by the organization, key stakeholders, and appropriate beneficiaries in an authorizing document (business case, benefits management realization plan, and portfolio/program/project charter). These benefits are monitored and managed as part of the portfolio, program, and project management life cycles.
The rationale for this principle is to enable the organization to effectively monitor progress toward achieving those planned benefits.
- BENEFITS REALIZATION IS HOLISTICALLY PLANNED AND MANAGED
Benefits realization is considered holistically, planned and managed from the organization’s perspective of needs and requirements, and not limited to those of the portfolio, program, or project delivery.
The rationale for this principle is that for BRM to be successful, a broader, holistic perspective of the sponsoring organization should be built into the overall planning approach. This reduces the likelihood of shortcomings that may stem from the narrower focus of delivering only outputs through portfolio, program, and project management efforts. A holistic approach also includes taking unexpected changes into account, with opportunities and threats for benefits realization aligned to organizational goals.
- GOVERNANCE IS ESSENTIAL TO BRM SUCCESS
BRM requires adequately provisioned resources, working within a clear governance structure, with those responsible for managing and achieving the agreed outcomes being identified correctly as authorized to do so.
The rationale for this principle is that organizations should invest resources and effort to realize and sustain benefits. Organizations should provide a clear and adequate governance structure. They should give authority to the appropriate individuals and hold them accountable for overall success.
Benefits Realization Management Framework
The BRM framework is an integrated set of governance and management practices designed to define, develop, deliver, and sustain planned benefits derived from the outputs of portfolios, programs, and projects. It includes a life cycle structure, key activities with associated roles and responsibilities, and depicts their general relationships. Using a framework helps organizations to focus on the reasons for undertaking projects and programs—the realization of benefits created through their outputs. This framework is intended as guidance for practitioners and can be adapted for use in their organizations.
BRM LIFECYCLE
The BRM life cycle component of the framework is expressed in the stages of Identify, Execute, and Sustain.
Exhibit-3 serves as an organizing model to use BRM for organization specific applications.
Exhibit 3- BRM Framework i the context of Portfolios, Programs and Projects
IDENTIFY Stage
In this stage, the organization’s executive leadership decides what benefits to pursue and whether portfolios, programs, and projects are the best route to achieve strategic objectives and their associated benefits. Planned benefits are then defined and organized. Each benefit should have a designated owner.
Ideas for benefits come from many sources. Commonly, strategic planning workshops, annual budgeting planning, updates of benefits mapping, and stakeholder insight identify potential benefits followed by their qualification and quantification. Quantification includes forecasting or estimating the scale of benefits anticipated to be achieved through a portfolio of programs and projects.
EXECUTE Stage
During this stage, portfolios, programs and projects begin technical and management planning to create the outputs—products, services, and capabilities—that lead to outcomes for beneficiaries to realize planned benefits.
The benefit owner is responsible to ensure that:
- Planned benefits are clearly communicated to key stakeholders
- Program or project teams understand how their outputs contribute to planned benefits
- Progress reviews are punctual
- There is a clear way of discovering emergent benefits as well as the threat of disbenefits
- The programs and projects remain relevant, aligned, and produces outputs for planned benefits in the face of unexpected events
SUSTAIN Stage
This stage focuses on the acceptance and use of the outputs that create outcomes leading to the realization of benefits. Benefits sustainment, the ongoing activities performed by the benefit owners and beneficiaries, ensures the continuation of outcomes and benefits achieved through portfolio, program, and project outputs. Benefit owners, beneficiaries, and business analysts, rather than program or project managers, typically focus on this stage. Concerns they may need to address, include:
- Are benefits (tangible, intangible, short-term, and/or long-term) being tracked?
- Have outputs been transitioned to and approved by beneficiaries), including accountable, operational or business owners?
- Are realized benefits being measured and verified against applicable plans?
- Are benefits being realized within the timeframe of the benefits realization management plan?
- Have emergent benefits and disbenefits been identified, and if so, are they properly managed?
Concluding Remarks
To summarize, BRM is a continuous journey in which organizations learn by doing and improving their performance over time. Organizations can advance BRM capabilities significantly through incremental steps, for example, launching multiple quick-win measures to build up experience rapidly.