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Summary of results: Benefits Realisation Management and its influence Benefits Realization Management and its influence on project success, project governance, and execution of business strategy - Analysis of Brazil, the United Kingdom, and the United States of America

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Technical report produced for the Project Management Institute (PMI) Survey program in January 2013 with the results of the survey performed at the University of Warwick (UK) on the influence of Benefits Realization Management on project success, project governance, and execution of business strategy, which analysed data from Brazil, the United Kingdom, and the United States of America.
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Summary of results: Benefits Realisation Management and its influence on project success, project governance, and
execution of business strategy - Analysis of Brazil, the United Kingdom, and the United States of America.
01/2013
Page 1
Benefits Realization Management and its influence on project success,
project governance, and execution of business strategy - Analysis of
Brazil, the United Kingdom, and the United States of America
This report is a summary of results extracted from a dissertation submitted in partial fulfillment of
the requirements for the Degree of Master of Science in Programme and Project Management
in August of 2012 at the University of Warwick.
Author: Carlos Eduardo Martins Serra, MSc, PMP c.e.m.serra@warwick.ac.uk
Supervisor: Martin Kunc, PhD martin.kunk@wbs.ac.uk
1. Introduction
In the past decades, organizations have been strongly concerned in increasing their
project success rates as well as in ensuring that their investments were resulting in the
delivery of their strategic needs. Meanwhile, project, program and portfolio
management have been studied and developed in order to have more effective and
more strategy-focused portfolios. In spite of these efforts, several surveys are still
presenting high project failure rates and a strong need for improving the alignment
between project outputs and business strategies.
In the past few years, due to the global economic crisis, organizations have an
increasingly stronger need for more efficient project portfolios. Therefore, a
management discipline called Benefits Realization Management
1
has been increasingly
employed precisely to guide the conception and the management of projects, based on
business needs, and to support effective governance. These practices are suggested
as a link between strategic alignment and project success, supporting the management
of a more effective project portfolio as well as ensuring the delivery of business needs.
Then, in order to understand the relationship between these practices and project
success, we assessed and analyzed experiences and perceptions of 331 project
1
‘Benefits Realisation Management’ (Bradley, 2010; OGC, 2007), ‘Project Benefits
Management’ (Melton, et al., 2008) and ‘Benefits Management` (Jenner, 2010) are terms
regarding to the management of a set of processes needed to ensure programmes, projects
and portfolios delivering and embedding into the current day-to-day business all requirements of
business strategies, in order to perform a meaningful and sustainable creation of value.
Summary of results: Benefits Realisation Management and its influence on project success, project governance, and
execution of business strategy - Analysis of Brazil, the United Kingdom, and the United States of America.
01/2013
Page 2
management practitioners as well as of 40 professionals in project governance. We
identify project success rates, and the most influential project success criteria, as well
as the utilization of key Benefits Realization Management (BRM) practices. We also
analyzed the variation in the use of BRM practices between Brazil, the United Kingdom
and the United States of America.
The findings evidence that project success rates are higher in groups of projects where
benefits realization management practices have been applied. In addition, we identify
how much each practice is particularly influential.
2. Results
The first group of objectives of this research is identifying project success criteria to
evaluate project success from the strategic perspective, identifying project success
rates using this set of criteria, and then identifying the relevance of each criterion.
Seven dimensions of project success identified in the literature were employed to
assess project success by using two different approaches, which are Project
Management Performance and Creation of Value for the Business. The following chart
presents the success rates from a random sample of 331 respondents, based on final
perceptions of success as well as on the perceptions in each of seven dimensions.
Figure 1 - Success Rates Consolidated
However, in order to be able to assess different perspectives of project success, the
research has identified three groups of roles that could have diverse perceptions, which
are Program and Project Governance Professionals, Program and Project
Management Practitioners and Benefits Owners. In order to make easier the
comprehension, these three groups were associated to Project Sponsors, Project
Summary of results: Benefits Realisation Management and its influence on project success, project governance, and
execution of business strategy - Analysis of Brazil, the United Kingdom, and the United States of America.
01/2013
Page 3
Teams and Project Customers. The next chart presents the success rates obtained
from the same sample, but split per dimension of success and perspective.
Figure 2 - Success rates per dimension and perspective
A high level of agreement on the relevance of these seven dimensions was found when
comparing these results to the qualitative assessment of 40 governance professionals.
A slightly higher relevance of Outputs and Outcomes between the seven dimensions
was also identified.
After identifying the seven dimensions and assessing the perceptions of success, we
identify how much each dimension is able to predict the final perception. Although the
seven dimensions and three perspectives are able to predict the final perception
reasonably well, only “Required outputs - Customer's perspective” has capacity to
predict success by itself. Alternatively, seven consolidated perspectives of those seven
dimensions are also able to predict the final perception reasonably well, but this time
only “Schedule goals” and “Required outputscan predict success by themselves.
Main findings related to perceptions and dimensions of project success:
“Required outputs - Customer's perspective”, “Schedule goals” and “Required
outputs” were the only perceptions with individual ability to predict the final
perception of success. It evidences that organizations still prioritize Project
Management Performance when evaluating project success, although previous
surveys have identified increasing levels of utilization of benefits as criteria.
“Budget goals” lacks the ability to predict project success by itself. Surprisingly,
it has contradicted the high relevance of financial criteria identified by the
literature review and the qualitative survey. Possibly, as suggested a few
Summary of results: Benefits Realisation Management and its influence on project success, project governance, and
execution of business strategy - Analysis of Brazil, the United Kingdom, and the United States of America.
01/2013
Page 4
qualitative responses, organizations have been flexible with budgetary
restriction in order to prioritize the delivery of expected outputs on the required
schedule. However, since no definite evidence was found, further investigation
is suggested in order to develop a better understanding of this divergence.
After identifying success rates and the most relevant criteria, the second group of
objectives of this research is identifying levels of utilization of key Benefit Realization
Management practices, which could support effective governance, and then increase
project success rates. The list of eleven key BRM practices identified and assessed is
presented in the next table along with their respective rates of utilization and relevance
for organizations, both based on the assessment of the same two groups of
professionals.
Table 1 - Key BRM practices to support project success
Key BRM practices
Relevance
for Org.
Code
Each initiative has its expected outcomes clearly defined.
83%
BRM 1
Project outcomes create a measurable value to the
organization.
65%
BRM 2
Project outcomes support the achievement of clearly defined
strategic objectives.
72%
BRM 3
Expected outputs, outcomes and benefits are described in the
business case and approved at the beginning of the project.
83%
BRM 4
Project outputs and outcomes are frequently reviewed and
realigned to the current expectations.
80%
BRM 5
Project reviews are frequently communicated to the
stakeholders as well as their needs are frequently reassessed.
73%
BRM 6
Project outcomes adhere to the expected outcomes planned in
the business case.
70%
BRM 7
Project’s scope includes activities aiming to ensure the
integration of project outputs to the regular business routine.
77%
BRM 8
Project outcomes are monitored by the organization after project
closure in order to ensure the achievement of all benefits
expected in the business case.
45%
BRM 9
The organization works in a pre-planned and regular way to
integrate project outputs into the business routine from the first
delivery to the project’s closure.
55%
BRM 10
A BRM strategy defines the standard procedures for the whole
organization.
51%
BRM 11
Summary of results: Benefits Realisation Management and its influence on project success, project governance, and
execution of business strategy - Analysis of Brazil, the United Kingdom, and the United States of America.
01/2013
Page 5
Main findings related to BRM practices:
The current utilization of BRM practices suggests a strong focus on defining the
needs and delivering outputs and outcomes. However, they also reveal lack of
focus on benefits realization. This is supported by qualitative results, which
suggested that organizations do not keep track of benefits after project
closures, and that they lack BRM strategies.
Different levels of utilization of BRM practices between countries have been
identified in three practices (BRM 2, BRM 3 and BRM 7). Further research is
suggested to provide better understanding of these differences and their
influences.
Then, we identified how much the utilization of these key BRM practices is able to
predict the final perception of project success, the perceptions related to each
dimension and the unweighted sum of the seven dimensions. The next chart
summarizes these results.
Figure 3 - Ability of 11 key BRM practices to predict project success
Main findings related to influence of BRM practices on project success:
The utilization of BRM practices explains 16% of the final perception of project
success. This result is enough to evidence BRM practices having positive
influence on project success.
BRM practices are more influential over dimensions related to the creation of
value for the business. However, they also influence dimensions related to
project management performance. Therefore, these results challenge the idea
that BRM practices do not influence dimensions related to project performance.
Summary of results: Benefits Realisation Management and its influence on project success, project governance, and
execution of business strategy - Analysis of Brazil, the United Kingdom, and the United States of America.
01/2013
Page 6
No dimension of success related to the creation of value for the business
significant influence on the final perception of success.
BRM practices explain 44% of the perception of project success when
considering equal weights for all seven dimensions of success.
3. Predictions and practical implications for organizations and
professionals
Main benefits of BRM for organizations based on the findings of this research:
BRM practices reduce project failure rates, and then they reduce financial
losses related to project failures. They ensure the execution of projects that
deliver value to the business as well as perhaps being the best way to ensure
strategically aligned project portfolios.
A clearer identification of valuable projects supports organizations in being
more efficient, and then in increasing their range of investment.
Main practical implications of the findings of this research:
Since many Project Governance Professionals affirmed their aim to implement
BRM strategies in their organizations, these practices may face higher levels of
utilization in the next few years. However, it will depend on the understanding of
the benefits from these practices by high-level managers. Since BRM practices
are strictly related to governance, the buy-in from the top-management is
fundamental for any further development.
In order to enable effective governance and strategic project success,
organizations should increase the relevance of success criteria related to the
creation of value for the business. Lack of relevance of these criteria may
jeopardize any attempt to implement BRM practices.
BRM practices increase the control and the traceability of investments as well
as the accountability for results, which may cause some discomfort. They can
also suffer resistance, because they make clearer the value of each initiative,
and then they make more difficult the execution of non-valuable ones.
Summary of results: Benefits Realisation Management and its influence on project success, project governance, and
execution of business strategy - Analysis of Brazil, the United Kingdom, and the United States of America.
01/2013
Page 7
Organizations can develop actions to improve the alignment between
perceptions of success from Team and Customer/Sponsor, and then avoid any
negative impacts from the misalignment found by the research.
Organizations need to develop their capabilities in measuring benefits, as
revealed the qualitative results.
Many organizations have weaker focus on the integration of outputs and
outcomes into the business. Practices related to monitoring outcomes after
project closure and development of organizational strategies to ensure
integration should be employed in order to ensure the delivery of sustainable
long-term benefits. The responsibility for these processes should transcend
project structures. Departments of change management and corporate/strategic
governance should be accountable for that integration.
Project Teams, as suggests the literature review and some qualitative
responses, should be made aware of the expected outcomes and their
relevance to business strategies, because Project Teams are responsible to
make changes happen, so they need to understand very clearly the
organizations’ needs. Therefore, BRM practices should reach Project Teams
and Customers, being not be limited to Program/Portfolio levels.
External projects should deliver benefits to external customers as well as to
their own organizations. Specific processes may be required in order to manage
this kind of complexity.
4. Works Cited
Bradley, G., 2010. Benefit Realization Management. First ed. Farnham: MPG Books
Group, UK.
Jenner, S., 2010. Transforming government and public services: realising benefits
through project portfolio management. First ed. Burlington: Ashgate.
Melton, T., Iles-Smith, P. & Yates, J., 2008. Project benefits management: linking your
project to the business. First ed. London: Butterworth-Heinemann.
OGC, 2007. Managing successful programmes. 3rd ed. London: TSO (The Stationery
Office).
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