Too many organizations focus on accepting every project that comes their way. It might be a good strategy for companies that are only starting out, but with time, this approach has a risk of putting the company in a place where projects stifle progress instead of helping it grow.

There comes a point where the management needs to ask itself, what benefits a project can bring to the organization.

Benefits realization management (BRM) aims to solve this issue and provide a framework for identifying and managing the benefits projects, programs, and portfolios bring. In this article, we’ll explore what BRM is, and how you can implement it in your company.

Key takeaways:

  • Benefits realization management is a process of planning, tracking, realizing, and sustaining strategic benefits from the outcomes of each project or program.
  • It requires a shift from a purely finance-oriented approach to long-term thinking.
  • The main components of the BRM process are identification, realization, and sustainment of benefits.
  • BRM-specific tools and PPM software are instrumental in successful implementation of this strategy.

What is Benefits Realization Management?

Project Management Institute defines benefits as “an outcome of actions, behaviors, products, or services that provide utility to the sponsoring organization as well as to the program’s intended beneficiaries.” [1] Benefits can be measured either in financial gains an organization makes or in terms of how projects add to company growth.

To understand benefits better, compare them to project output.

Project output is the direct outcome of finishing a project successfully, its deliverables. An example of that would be reworking the app backend. Project benefits are the business value these deliverables bring to the organization. Following the example above, project benefits would be reducing customer churn by 10% in 12 months.

Benefits realization management is the structured organizational process aimed at ensuring transformation of project output into benefits. It includes:

  • Identifying benefits.
  • Assessing potential benefits of a project.
  • Planning and executing benefits realization.
  • Measuring the actual benefits realized.

Key elements of benefits realization management

PMI defines three core elements of the benefits management process:

  • Identify the benefits. Analyze portfolios, programs, and projects to understand what benefits they can bring to your organization.
  • Execute benefits. Implement traditional project management strategies to realize the benefits you’ve planned.
  • Sustain benefits. Perform benefit analysis and use the benefits you’ve realized to drive company growth or maintain the benefits that are in the form of assets.

There are several key documents and procedures that are essential to BRM as well:

  • Benefits breakdown structure. A planning document that breaks down benefits for each project.
  • Benefits register. A centralized record of all planned and realized benefits.
  • Benefits realization roadmap. A document that outlines how project deliverables are  realized as organizational benefits.

What is the purpose of benefits realization?

The main purpose of the benefits realization management process is to ensure that projects are aligned with the company’s strategic goals and that project deliverables contribute to larger company goals.

Why is BRM critical for project success?

Benefits management is an advanced approach to project management, and projects can be delivered without it. But introducing it in your company can be beneficial beyond delivering projects on time and within budget.

  • Benefits, not just output. Organizations without BRM only realize outputs, not strategic benefits. BRM ensures each deliverable contributes to the overall company growth.
  • Compounding value of benefits. Each realized benefit creates compounding conditions for lowering risk of benefit sustainment and realizing more benefits in the future.
  • Strategic alignment. Benefits management helps align projects and project objectives with the strategic vision of the company it’s implemented in.

Benefits Realization Management Process: 6 Steps

Benefits realization typically follows several well-established steps..

Create a BRM strategy

The first step in this process is creating an organizational strategy for benefits realization management. You need to determine and formally describe:

  • What are potential types of benefits?
  • What are the benefit measurement criteria?
  • What data do you need for that?
  • What is the workflow for associating benefits with project outcomes?
  • Who is responsible for each step of the process?
  • How often are you going to review your strategy and how?

Identify the benefits

Once you have a formalized approach to BRM, you can start identifying the benefits each project can bring to your organization.

In some cases, it can be straightforward. For instance, doing a pilot project for a large company can create cashflow right away and begin a business relationship.

In others, it may be more difficult. For instance, a large benefit can be dependent on the outcome of several projects.

Do benefits estimation and create a map of benefits for all of your current projects and go to planning.

Plan for benefits

Since benefits depend on project outcomes, you need to plan project execution realistically. You should take project priority, strategic alignment, capacity constraints, and other risk and market factors into consideration. If you don’t take them into consideration, you might encounter bottlenecks that decrease productivity and ruin long-term delivery plans or commit to benefits that cannot be achieved realistically.

Some benefits can also be realized much later than the actual project outcomes. For instance, if the outcome is a product that needs to be marketed first. You should account for that in benefits forecasting.

Execute the project

With those steps taken care of, you need to deliver the project on time and within budget to see benefit realization. To execute the project successfully, you need to create project success criteria, plan it realistically, and monitor project progress to intervene in case you see a project is in danger of being delivered past the deadline or over the budget.

Review the benefits

When the project is finalized, review the benefits that you have received from its outcomes. Compare the actual benefits with the benefits you have planned. This can include comparing return on investment projections or more complex reviews.

If there’s a large discrepancy, this means one of two things: either your estimation process is too optimistic or there was a problem with execution.

Review your strategy

Based on the data you obtain from the process above, review your benefits realization strategy. You might come to the conclusion that you need to improve some of the planning workflows to estimate the benefits more realistically or that you need to optimize  project delivery.

Examples of Benefits Realization Management

Let’s consider two hypothetical examples of benefits realization management in different industries.

Straightforward benefits realization in the manufacturing industry

For a very simple example, let’s consider a manufacturing company that takes on a client project. Project outcomes in this case is delivering the products and receiving compensation for it.

The benefit is purely monetary, a sum of money that can be used for investment in future projects. Managing that benefit comes down to:

  • Estimating the monetary value.
  • Ensuring project delivery.
  • Using the generated cashflow to benefit the company.

Complex benefits realization in the aerospace industry

A more complex example would be an aerospace R&D project aimed at increasing the efficacy of a radar system on an aircraft. The short-term benefits are improving the radar system, the long-term ones are generating revenue through retrofitting existing aircraft and presenting improved hardware to new clients.

In this case, assessing value realization is harder and sustainment of benefits is going to be the most difficult part, as it takes additional marketing and sales work to generate revenue from the R&D results.

Сommon Challenges of Benefits Realization   

Now let’s take a closer look at several challenges that can make the process of benefits realization management harder at your organization.

Lack of competence

The first and the most important challenge in BRM is lack of competencies in the project manager staff and PMOs. BRM is a process that requires specific skills to define and track benefits. Without the appropriate skillset, management won’t be able to perform well.

The solution to this is investing in company-wide training for management staff.

Cultural issues

The next issue that often presents itself is the mismatch between current company culture and business realization.

Traditionally, businesses approach project management success from the standpoint of meeting all project objectives. So if you are able to deliver the project on time and with the expected margin rate, it’s considered successful.

This simplified approach can come in conflict with BRM’s search for the benefits a project can bring to the company outside of its direct usefulness.

Solving this may prove more difficult, but often boils down to company-wide training as well.

Siloed processes

Another common issue is siloed processes and siloed data. Many organizations don’t centralize their workflows and things like decision-making processes or project-related data remain separated between departments. This makes it more difficult to see the bigger picture and make correct decisions.

Fixing this requires reworking data storage practices across your organization towards centralization.

Poor execution

The benefits realization framework is focused on measuring benefits delivered from the projects’ execution, and issues with delivery will impact BRM. Delays, scope changes, and execution inefficiencies can significantly reduce or delay the expected benefits. 

If your organization often has issues with planning and project delivery, it can be difficult to fix fast. The best way of going about it is adopting a more structured project management approach and using project portfolio management tools to assist in planning, execution, and delivering the expected benefits.

Tools and Software for Benefits Realization Management

A well-planned benefit realization management strategy can benefit from two types of tools: those related to the BRM process itself and project portfolio management tools. The latter help with project planning and delivery, improving realization of benefits.

BRM-specific tools

In terms of BRM-specific tools, you have the choice of multiple formal documents used to improve the accuracy of the process. Here are the main ones:

  • Benefit maps. This instrument helps understand the interdependencies between different parts of the BRM process.
  • Benefits identification sheets. This document plans out different types of benefits and KPIs associated with them.
  • Business realization plans. This document describes the project lifecycle and ways of measurement of all planned benefits.
  • Benefit realization control sheets. This document is used to track benefits realization and assess the effectiveness of the process.

PPM tools

Project portfolio management tools play an important role in benefits realization management, as they help with planning and executing projects and aligning them with business goals. Let’s look at some key features of this software based on the example of Epicflow, a resource-oriented multi-project management tool.

  • Pipeline visibility. Epicflow provides visibility into a project portfolio multiple ways to improve transparency and control over the execution.
  • Bottleneck and resource constraint management. Capacity planning software allows you to find bottlenecks and prevent them from ruining benefits delivery plans.
  • Business-value optimization. Epicflow Portfolio Optimizer can help you optimize your portfolio with resource capacity and business value in mind, resulting in an optimal set of benefits you can deliver.

Book a call with our representative to find out more about how Epicflow can support your benefits realization management strategy.

References

  1. Project Management Institute. (2013a). A guide to the project management body of knowledge (PMBOK® Guide) – Fifth edition. Newtown Square, PA: Author.

Frequently Asked Questions

What is the role of Project Manager in BRM?

BRM depends on delivering projects well, and implementing a project management framework helps immensely with improving project delivery. The project manager can take an active part in forming and executing the BRM strategy, but even if they don’t, they play a crucial role in delivering expected project outcomes.

What is a benefits realization plan?

A benefits management plan is a document that outlines what benefits your company expects to see from project outcomes, how it plans to realize them, and when they can be realized.

What are the three key components of benefits realization?

The three key components of benefits realization management are:

• Identification.
• Realization.
• Sustainment.

What is benefits realization in change management?

Change management is the process of planning for changes of project scope. With scope changes comes a change in benefits your company can expect from a project. Benefits realization management should be a part of change management to adjust the expectations of what benefits are going to be delivered and when.

What software is used for benefits realization management?

BRM uses a mix of tools for benefits realization mapping like Benefits Dependency Networks (BDN), or Lucidchart, and project portfolio management tools like Epicflow.

What does a benefits realization manager do?

A benefits realization manager handles BRM processes from identification to realization and sustainment. This can be a separate position at a company or these duties can be distributed between project managers or members of the PMO.