New release from PMI with download open to the general public (for a limited time)
Happy for taking part in the SME Group (Subject Matter Expert) for the new PMI Practice Guide: Benefits Realization Management. In this article and others, I will be talking about it.
[BRM] – Download it at:
[BRMf] – Do not forget the material already made available in 2016:
And check this introductory video by PMI:
Part 1 – Connecting Organizational Strategy to BRM
“The practice guide describes benefits realization management (BRM) with a focus on products, services, results or process improvement”. [BRM, pag.1]
The need for BRM is that organizations are struggling to implement the strategies they need to gain and sustain competitive advantage. They need their investments are effective in terms of value.
The value we expect to obtain for the organization is the net result of the benefits less the cost of achieving the benefits.
Benefits is the “Value that is created for the project sponsor or beneficiary as a result of the successful completion of a project” [BRMf, pag.2]
Benefit is “A gain realized by the organization and beneficiaries through portfolio, program, or project outputs and resulting outcomes” [BRM, pag.85]
Once we understand that we want to promote VALUE to the organization and that can be achieved as the net result of the benefits and the cost to obtain them, we need to figure out how to relate that to our strategy.
The Figure 2.2 above [BRM, pag.9] is an excellent place to start.
A) The organization´s Strategy should define “the overarching goals that guide the direction of the organization”. That will set where we want to go.
B) The Strategic Objectives are defined by “The process of decomposing strategic goals into strategic initiatives.” That will set our expected value.
C) The Initiatives are “The portfolio, programs, and projects created to deliver a strategic goal.” That will set what must be done (also how, when, for how much, when and who).
D) Outputs are “the expected deliverable of a portfolio, program or project.” That sets the deliverables of each initiative.
E) Outcomes are “the results obtained through the use of portfolio, program and project outputs”. It is the practical application of initiative deliverables into the organization´s daily operations.
F) Benefits are “A gain realized by the organization and beneficiaries through portfolio, program, or project outputs and resulting outcomes.” Benefits must be identified, executed and sustained.
G) Value is “the net result of realized benefits less the cost of achieving the benefits. The value may be tangible or intangible.”. Once true value is obtained, it will then influence future strategies, objectives and initiatives positively.
We should be aware that we may obtain disbenefits, or the desired result of initiatives´ outcomes are not transformed into true value. There it comes the importance of managing benefits realization, supporting the organization to effectively obtain their desired value.
- I will be adding more posts regarding BRM, and you may also check some videos at: https://www.youtube.com/watch?v=585eZvworZo
(Funny fact: I first started to read about Benefits Realization with European materials and there you will spell Realisation, not Realization…)
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Content originally posted at https://www.linkedin.com/pulse/benefits-realization-management-peter-mello on January 16th, 2019.