Successful on-spec, on-time and under budget project completion is poorly correlated with achieving that business benefit, which, earlier, provided the project’s justification. Any two-minute Google search on success of IT projects will confirm that only half of them are even completed and that of those only 30% realize any business benefit.
Benefits Realization (BR), as part of our EAP 2.0 methodology, seeks to ensure – yes, ensure – that anticipated business benefits are indeed realized. To that end, BR inserts additional benefit measuring and monitoring tasks into the project‘s work breakdown structure (WBS), and modifies project control tasks, enabling the project manager (PM) to manage for business outcome rather than for project milestones.
There is some variability in the nature and number of task that are added or modified in the WBS. This primarily depending on the stature of the project sponsor and to whom the PM reports. This is intuitively obvious considering the different levels of authority vested in the CEO versus, say, the CIO
When managing a CEO-led business transformation project, ensuring success follows from holding process owners accountable for delivering. The PM, acting on behalf of the CEO, benefits from a “naturally” delegated authority. The additional BR steps the PM must insert into the WBS then simply amount to enumerating benefits and Assigning Accountability (AA) to business managers.
The additional benefit definition and benefit monitoring tasks to be included in the WBS are
The purpose of modifying project control tasks is to expand the analysis of project risk beyond the IT component of the risk, i.e. the risk of not delivering capability on-spec, on-time, on-budget, and to integrate into a single analysis, the risk that any other process in context may not produce the anticipated outcome. This integrated analysis assesses the impact on benefits realization and adjust the business transformation program accordingly. This ensures that all processes (or sub-projects) of a business transformation are aligned with the same pay plan. In the absence of this alignment, an IT capability may continue to be pursued at pace with 100% on-spec, etc while the analysis shows that the benefit can not be achieved for 100%; the IT capability is therefore over-engineered, mis-matched relative to the business change need, and at a cost that cannot be recuperated;
The PM has additional challenges, however, when reporting to, say, the CIO. The office of the CIO typically has no authority over process owners, and cannot “naturally” delegate any such authority to the PM. The PM thus has no official standing upon which to assign tasks to process owners, let alone to hold them accountable for outcome.
Most process redesign projects do not have that CEO-level of corporate sponsorship, and the PMs elect to invest in a formal communication plan and in change management to keep management commitment and to overcome resistance to change. Of course, management commitment and resistance to change are but two of the challenges faced by the PM when he manages for outcome.
EAP 2.0 aids the PM in two ways in planning a project for Benefits Realization. The majority of our effort in EAP 2.0 is spent in building a knowledge base, a simultaneous understanding of the problem, in context, and of the solution, in context. This process context analysis lays bare the business transformation problem and this clear definition of the problem, holds within it the description of the solution. When the project team crates this insight, we have Breakthrough.
Breakthrough provides insight how the PM might deal with the following issues.
The list above is an illustration, be it far from complete, of the kinds of roadblocks standing in the way of fully realizing the transformation’s benefits. This fact base includes an analysis of the subject process’ inefficiencies; its root cause and effect in the context of upstream and downstream processes, in the context of corporate culture and organization, in the context of other change initiatives, It may include data on conflicting demands placed on workers and organizations, and of whatever stands in the way of an effective business transformation.
But more important for the PM is the format in which every issue’s solution is documented.
This format of Outcome-Process-Owner enables the PM to insert sub-projects and assign accountability for each of the project’s Critical Success Factors.
Accountability
However, knowledge of the road forward does not yet mean corporate agreement to taking that first step and executing the strategy. This is our segue-way into the second way we aid the PM in planning a project for Benefits Realization.
In the Seeking Accountability phase of EAP 2.0 we facilitate the conversations that need to happen to ensure that accountability rests where it belongs. We engage with the owners, individually and collectively, of all activities in the strategy and establish where possible clear ownership and accountability
The first visible result of Seeking Accountability is a manager who takes accountability both for the daily operations of a business process and for its continual improvement. The second visible result is a cross-functional transformation team that functions as a collective “we.”
Our role in Benefits Realization is to facilitate the IPT Team engaging with the business community and to create room to have the conversations – conversations that were perhaps avoided until today –that, in the end, help process owners realize that the business benefits are realized through tasks that they must step up to.
Benefits Realization (BR), as part of our EAP 2.0 methodology, seeks to ensure – yes, ensure – that anticipated business benefits are indeed realized. To that end, BR inserts additional benefit measuring and monitoring tasks into the project‘s work breakdown structure (WBS), and modifies project control tasks, enabling the project manager (PM) to manage for business outcome rather than for project milestones.
There is some variability in the nature and number of task that are added or modified in the WBS. This primarily depending on the stature of the project sponsor and to whom the PM reports. This is intuitively obvious considering the different levels of authority vested in the CEO versus, say, the CIO
When managing a CEO-led business transformation project, ensuring success follows from holding process owners accountable for delivering. The PM, acting on behalf of the CEO, benefits from a “naturally” delegated authority. The additional BR steps the PM must insert into the WBS then simply amount to enumerating benefits and Assigning Accountability (AA) to business managers.
The additional benefit definition and benefit monitoring tasks to be included in the WBS are
- Develop a strategy of intermediate benefits that builds up step-wise to a final benefit. Define each benefit in terms of process outcomes and quantify each benefit in meaningful business-like key performance indicators (KPI).
- Implement processes to measure benefits; define measurement data to be collected and schedule implementation of suitable measurement processes; develop automation support where necessary;
- Execute: Define a clear path (i.e. a set of projects) to achieving benefits; define a project for each intermediary benefit;
- Identify process owners (by name); assign accountability for intermediary and final benefits; transfer accountability for monitoring benefits (from PM) to process owners
- Publish: go on-record with accepted accountability;
The purpose of modifying project control tasks is to expand the analysis of project risk beyond the IT component of the risk, i.e. the risk of not delivering capability on-spec, on-time, on-budget, and to integrate into a single analysis, the risk that any other process in context may not produce the anticipated outcome. This integrated analysis assesses the impact on benefits realization and adjust the business transformation program accordingly. This ensures that all processes (or sub-projects) of a business transformation are aligned with the same pay plan. In the absence of this alignment, an IT capability may continue to be pursued at pace with 100% on-spec, etc while the analysis shows that the benefit can not be achieved for 100%; the IT capability is therefore over-engineered, mis-matched relative to the business change need, and at a cost that cannot be recuperated;
The PM has additional challenges, however, when reporting to, say, the CIO. The office of the CIO typically has no authority over process owners, and cannot “naturally” delegate any such authority to the PM. The PM thus has no official standing upon which to assign tasks to process owners, let alone to hold them accountable for outcome.
Most process redesign projects do not have that CEO-level of corporate sponsorship, and the PMs elect to invest in a formal communication plan and in change management to keep management commitment and to overcome resistance to change. Of course, management commitment and resistance to change are but two of the challenges faced by the PM when he manages for outcome.
EAP 2.0 aids the PM in two ways in planning a project for Benefits Realization. The majority of our effort in EAP 2.0 is spent in building a knowledge base, a simultaneous understanding of the problem, in context, and of the solution, in context. This process context analysis lays bare the business transformation problem and this clear definition of the problem, holds within it the description of the solution. When the project team crates this insight, we have Breakthrough.
Breakthrough provides insight how the PM might deal with the following issues.
- The PM does not control the business rationale for the project, yet as the business case evolves and ROI changes, in his role of portfolio manager, he must decide the fate of projects as part of periodic reprioritization of the portfolio.
- The PM may not have a full understanding of the “reach” of the business transformation, yet to effectively manage the project for outcome, he needs to control the impact on the existing organisation, and he needs to “settle” expectations on outcomes.
- The PM does not control the program structure, yet Business Transformation projects almost always involve some form of organizational change; to allocate resources properly he needs authority to make organisation changes.
- The PM may not be a financial expert, yet allocating Economic Value Added (EVA) to processes and organizations are essential to aligning process owners in the project.
- The PM has little control IT organization’s turf wars and the confusion about who owns what processes.
- The PM does not control the message content, which is the responsibility of the process owners, yet often the PM is in charge of the communications plan.
- The PM does not control incentives and pay plans, yet alignment or lack thereof is the single-most important contributor to process inefficiency. In addition, he may have limited power to counter management’s tendency to switch back to old habits of rewarding project completion rather than benefits realisation.
- But perhaps most difficult to overcome is that the process owners do not report to the PM; he has thus no standing in the organisation to hold process owners accountable for tasks in the project.
The list above is an illustration, be it far from complete, of the kinds of roadblocks standing in the way of fully realizing the transformation’s benefits. This fact base includes an analysis of the subject process’ inefficiencies; its root cause and effect in the context of upstream and downstream processes, in the context of corporate culture and organization, in the context of other change initiatives, It may include data on conflicting demands placed on workers and organizations, and of whatever stands in the way of an effective business transformation.
But more important for the PM is the format in which every issue’s solution is documented.
- What is the desired outcome? (turn the problem around)
- what is the process that produces that outcome? (include this task in the project plan)
- Who owns that process? (assign accountability)
This format of Outcome-Process-Owner enables the PM to insert sub-projects and assign accountability for each of the project’s Critical Success Factors.
Accountability
However, knowledge of the road forward does not yet mean corporate agreement to taking that first step and executing the strategy. This is our segue-way into the second way we aid the PM in planning a project for Benefits Realization.
In the Seeking Accountability phase of EAP 2.0 we facilitate the conversations that need to happen to ensure that accountability rests where it belongs. We engage with the owners, individually and collectively, of all activities in the strategy and establish where possible clear ownership and accountability
The first visible result of Seeking Accountability is a manager who takes accountability both for the daily operations of a business process and for its continual improvement. The second visible result is a cross-functional transformation team that functions as a collective “we.”
Our role in Benefits Realization is to facilitate the IPT Team engaging with the business community and to create room to have the conversations – conversations that were perhaps avoided until today –that, in the end, help process owners realize that the business benefits are realized through tasks that they must step up to.
Breakthrough + Accountability = Benefits
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