Less than 30 percent of organizations actively try to measure their projects' benefits and value. And many that do use the simplistic 'put it in the budget' approach. However, internal and external events during the project can cause the value of the benefits to legitimately increase or decrease, and this dynamic interaction between benefits and their value should be recognized, tracked, and measured.
Value management's question for the end of a project is not so much "Did we deliver the business-case promised value?" as much as "Did we deliver the maximum available-at-the-time value?" (This at-the-time value could be higher than that originally promised).
Critical to benefits management is that all benefits-related dimensions are known and measurable.
- Has the project delivered its agreed outputs? Each project output should be measurable with a 'true/false' statement measure.
- Has the business delivered the agreed desired business outcomes that will deliver the benefits? Each shortfall in the delivery of a business outcome directly diminishes the value that can be realized.
- Have the benefits been delivered and to what degree?
- Have the value drivers or assumptions that determine a benefits' value changed and, therefore, have they changed the value available?
- What value has been realized and what caused any variances to the originally expected value?
Benefits management is not something you do at the end or after the project, but instead throughout the project. After all, realization of the benefits and value is why you do projects in the first place.
Value delivery management requires the realization of the business outcomes, benefits and value to be the focal point of the project. If the project delivers these outcomes they, in turn, will deliver or enable the benefits that will ultimately contain the value.
So it is important to understand the nature of benefits — what they are and are not, how they need to be stated in such a way as to be measurable, and how they need to be tracked, managed, and measured both during and after the project to ensure maximized value and ensure that the project remains viable at all times.
In most organizations, value measurement processes need to be introduced.
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Click here for the eighth article in this the series "Refocusing Projects onto Business Value, Part 8: Business Case"
Click here for the first article in this the series "Refocusing Projects onto Business Value, Part I: The Need".
Jed Simms is CIO magazine's weekly project management columnist. Simms, founder of projects and benefits delivery research firm Capability Management, is also the developer of specialized project management and project governance Web site www.project-sponsor.com
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