Managing Benefits: More than the Triple Constraint

Valarie Griep, MBA, PMP - June 2012

Why do we decide to initiate a project? At its most basic, isn’t it to enact change? There may be something lacking in the status quo and we believe a change will improve the situation— it could be in our competitive position, our ability to provide customer service, or our capacity to enact further changes in our environment. In other words, we perform projects to achieve the benefits attributed to the change.

So then why do we, as project managers, usually focus exclusively on managing the scope, schedule, and cost of our projects? Of course, there’s nothing wrong with defining and monitoring these performance indicators, but there’s another higher-level criterion of success we must not lose sight of. We must ensure the project realizes the benefits it was initiated to achieve for the organization.

Benefits Realization

Benefits are the positive effects resulting from a project. They flow from the needs of the organization as stated in the strategic objectives. Benefits should always be defined from the perspective of the project stakeholders. Projects can be thought of as benefits delivery vehicles! An effective benefits realization process starts in the initiating and planning phases of a project. It defines how you will organize and manage the work so that potential benefits are obtained. Without a benefits realization plan (why not add it to the Project Management Plan?), you are at greater risk of straying off course regarding the benefits. When you lose sight of the “why” of the project, you may not fulfill the reason the project was undertaken in the first place, even though your project meets its scope, schedule, and cost targets— the “what?”, “when?”, and “how much?” questions.

The project manager is usually brought into the project after it’s been justified by way of a business case, selected, and perhaps even chartered. The charter is your marching orders to begin planning and performing the project. At this point the triple constraint of scope, schedule, and cost are naturally foremost in your mind. Although this focus is appropriate, we need to also plan for how we will produce the desired benefits. Without this, it’s easy to lose sight of the benefits your project was intended to deliver as you respond and adapt to problems and changes during the execution phase.

Benefits Provide the Link

The benefits realization plan is the starting point. It should have a clear linkage to the business case and the business drivers which spawned the project. Let’s say one of the strategies for a kitchen cabinet manufacturer is to increase company profitability by 20% next year. They decide one way to accomplish this goal is to reduce the cost to manufacture their best-selling style of cabinets while maintaining their high quality. This project’s stakeholders include the manufacturing and procurement departments of the company. To start out, along with the scope planning, scheduling and estimating, the project manager must also determine who owns the benefits— the biggest beneficiary should be your project sponsor and he/she should also be accountable for the realization of the benefits! Ideally, the financial savings should be removed from the business beneficiary’s budget— furthering their motivation to achieve the project benefits.

All project planning documents should be developed to highlight the linkage between project strategy, the benefits of the strategy and how the project will deliver those benefits. It is important for project documents to describe how the changes will be made and by whom. A method of measuring benefit achievement must also be defined and agreed to by the stakeholders. Setting up a benefits focus from the beginning will give the project team a framework within which to manage the scope, the schedule and the budget to ensure the project benefits are realized.

Once the benefits realization plan is in place and project execution begins, it’s critical to keep the benefits in front of the team and the stakeholders. As risks occur, as change requests are evaluated, as workarounds are devised, the team must keep in mind how the benefits will be impacted. During project reviews, the project team should report on, and discuss, the status of benefits realization with the stakeholders. When environmental factors such as the competitive or regulatory issues drive benefits, be sure to reassess these often during the project.

Just Part Of The Process

You may be thinking, “Great! Here’s one more thing I need to do on my projects!” Just remember that it’s really the same sound project management practices you use now that ensures the benefits will be realized. Many of these things are incorporated into what you already are doing to be successful on projects. Highlighting benefits will simply give your project an edge in succeeding, put the accountability for achievement and benefits realization where it belongs, and keep the team focused on how their actions and decisions impact the benefits.

Here are some signs your project is on the right track regarding benefits realization:

  • The primary business beneficiary is involved and making project decisions based on impact to the benefits
  • There’s a transition plan to ensure changes are absorbed into on-going operations after the project disbands
  • The project scope includes all necessary training and coaching to sustain benefits.
The project has a much greater probability of success by keeping benefits realization as a top priority.

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