PPM 101 - Benefits Realization and Portfolio Value Management

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This video is based on our post: acuityppm.com/ppm-101-benefit...
Strictly speaking, benefits realization occurs at the project and program level, since these are the vehicles for delivering business value and executing strategy, but benefits realization must fit within an overarching value framework which is at the portfolio level. In this video, we will cover what benefits realization is and how to manage project and portfolio value across the portfolio management lifecycle.
What is Benefits Realization Management?
Benefits realization is about capturing the actual benefits (tangible and intangible) from a project following the completion of that project. Benefits realization often involves tracking the quantitative benefits of the project so that senior leadership can answer the question “did we get the benefits from the project that we expected?”
Why is Benefits Realization Important?
Developing a benefits realization process is important for several reasons: it increases the likelihood that organizations receive the intended benefits from completed projects, it helps improve business case development, it verifies the accuracy of the forecasts provided in the planning phase of the project, it enables a feedback loop to help improve project selection based on lessons learned, and it strengthens value management across the portfolio management lifecycle.
What Does a Benefits Realization Process Look Like?
There are several components to a successful benefits realization process including a benefits plan (that details the specific benefits being delivered, the beneficiaries of the benefits, when the benefits will be realized, when and how the benefits will be measured, and who will measure the benefits), a Business Value Owner who is responsible for ensuring benefits are realized, lessons learned to provide a feedback loop for developing better business cases in the future, and a change management plan.
What are some of the challenges associated with benefits realization?
Some of the challenges include not having a consistent and sound approach for measuring benefits, not monitoring the change in benefits over the course of the project lifecycle, not designating people to measure benefits after a project has completed, and not having a senior leader accountable for the benefits.

[@deanhamilton8740]

Thank you much!

[@waltermuzazaila3958]

Very helpful. Thank you

[@AcuityPPM]

Great. I am glad you found it helpful. Please reach out with any other questions or comments. Thank you.

[@LarissaStatsenko]

Hi, many thanks for the informative session. I really liked the lifecycle of benefits realisation, which is different from what PMI offers. A very clear framework exemplifying portfolio value management indeed demystifies the ideas that PMI standard discusses in quite a complicated manner.

[@AcuityPPM]

Thank you for that feedback. We're glad you enjoyed the video.

[@ComicCulture]

First, thank you very much for the video! It's like you are sitting in our team meetings listening to us trying to figure this out. I did have a question for you. How would you suggest tracking the benefits of 'quality of life improvements' related to software enhancements/add ons or upgrades? If a business case value proposal talks about retention or user satisfaction, not hard dollar returns, how would you suggest tracking if the benefits were realized after implementation? Also, how should those types of proposals be ranked among other proposals that actually have hard dollar returns?

[@AcuityPPM]

Great questions, and I am glad you liked the video. In terms of tracking non-financial benefits, part of the challenge is in identifying the appropriate metrics. For quality of life/user satisfaction, there should be some way to take a baseline before improvements are made and then measured again after (probably via survey) so you could compare results. Some of this can be time consuming, which is why companies may forgo these steps. In terms of prioritizing these proposals with different benefits, this is a matter of how you prioritize requests. Our recommendation is to capture financial and non-financial elements of "value" (and it is discussed in the prioritization video as well as our blog: acuityppm.com/ppm-101-project-prioritization-will-improve-your-portfolio/). Project value may not be purely financial, there should be a strategic component and possibly other business drivers (such as customer/user satisfaction). You would want to incorporate these other business drivers into your scoring model so that you can assess the relative value of projects focused on non-financial benefits compared to those with a heavy emphasis on financial benefits. Please reach out to us at [e-mail] if you have other questions.

[@ComicCulture]

@@AcuityPPM Great advice. I appreciate the reply! Thanks again for the videos.

[@michaelchando1579]

Crisp delivery! Precise and concise!

[@alanjyu]

Clarification question: is there a difference between value and benefit? I wasn't clear

[@AcuityPPM]

Alan, great question. Value is defined by each organization, but often includes a quantitative component (financial, such as net present value) as well as a qualitative component such as strategic importance and other business drivers. These elements of value are often incorporated in a prioritization scoring model (see: kzbin.info/www/bejne/qWqYdmeBiaabjqs). Benefits are the result of the key outputs that a project delivers. Benefit realization is about making sure that the outputs delivered by a project result in the benefits planned at the beginning of the project. One definition of benefit is "an advantage or profit gained from something" One definition of value is "the regard that something is held to deserve; the importance, worth, or usefulness of something". Value is the "regard" or the assessment of something. Benefit is the advantage/profit gained from the project deliverables. If you would like to talk further, please feel free to use this link: calendly.com/acuityppm/general-discussion