Benefit realization Management
The main objective of any business is making a profit by attracting a customer base. Herewith, it is desirable that the product has regular customers and a certain audience. To do this, you must create a profile of a potential consumer of services or goods. It usually includes a description of age, gender, level of education, monthly and annual income, his preferences and needs.
But this is not always enough, and then consulting companies are involved in the process, which fully develop the business project and take into account virtually every detail. Consultants work on the concept from all sides, setting specific goals and achieving them through the use of various methodologies. Today we will study one of these methodologies.
Benefit realization Management aims to achieve maximum benefits from the project. The essence of this method is that even if the customer wishes to increase the number of sales of customer relationship management systems (CRM), his project is not implemented (completed) until sales increase by at least 15%, which is the minimum threshold value. In this case, it does not matter that the CRM is already installed, adjusted, functioning, works exactly according to the schedule and fully corresponds to the budget.
The application of the method is associated with a clear awareness of the own benefits from the project, which will be guaranteed, as well as with control over the full project cycle.
To increase the effectiveness of the monitoring process of the implementation of a running project, it is important to not only find the right methodology in these conditions, but also to conduct an adequate policy, including price. It is necessary to keep track of new products and work in a progressive direction, combining solid material knowledge and a creative approach to business, without which success is impossible.
The main challenge of the Benefit realization management is to manage projects taking into account not only traditional indicators such as time, scale and budget, but also the degree of the organization’s progress towards its strategic goals.
The Benefits Realization methodology emphasizes not only strategic indicators (outcome), but also strategic results (output).
Principles and objectives of the method
Guide to action
BRM methodology refers to 3 stages of a project:
- Determine benefits — is the project able to achieve the right business result?
- Realize benefits — minimize risks to future benefits and maximize opportunities for additional benefits.
- Maintain the benefits — make sure the project still creates value.
In addition to linking projects to strategic goals, project benefits management involves the active participation of management in the implementation of the project. According to surveys, the involvement of the owner in the realization of the benefits was considered the main factor by 22% of respondents, 20% of the respondents called the participation of management as such a factor. Another 22% pointed out the importance of engaging the PM, who has successfully coordinated similar projects.
Constant dialogue between the business owner, management and project manager is an important condition of the methodology. Having up-to-date information on how the project complies with the company’s strategy, stakeholders and managers can make timely changes.
Among companies that rarely use the BRM process, only 11% observe flawless communication between management and PM. Only 40% of such companies receive important and relevant information on the progress of projects between the lower and higher levels.
Benefits of BRM: now, a little later and in the future
Many organizations refuse to permanently use BRM, because they are not tuned to fundamental changes in their work. Instead of a dramatic and one-step review of the project and principles of work, changes should be introduced in stages. BRM allows for both fast and medium and long term wins.
1.Choose the right projects
The Pareto principle in project management: only 20% of projects bring 80% of the planned benefits. BRM tools help find the cherished fifth part that prioritize such projects and achieve quick victories.
2. Engage project managers at all stages and invest in improving their skills
By getting authority as early as possible, the PM is better at building relationships with management. According to PMI, 62% of companies that constantly use BRM management consider it very important to conduct regular trainings for PM.
3. Approve correct behavior
Sometimes bosses vent anger on employees who give bad news. It is necessary to prevent such a situation, but rather to encourage the vigilance of staff. An employee who makes quick and accurate decisions, monitors the connection between the project and the strategy, immediately reports the problem, fits perfectly into the BRM concept.
4. Select a PM with the right skills
To successfully implement the methodology, we need managers with specialized knowledge: the management of the news department or the press service, the outsourcing of financial services, etc. Versatility is great.
Medium and long term wins
1.Develop approaches that link strategy and projects
Define strategic objectives in advance, move to them and make sure that the achieved results are maintained after the project is completed. Identify problems as early as possible and act immediately. Provide stakeholders with timely corrective action.
2. Motivate management, owners and PMs for achieving not only strategic indicators, but also strategic goals
Link the KPI system not only to traditional indicators (time, budget), but also to strategic results – to improve customer confidence or financial figures.
3. Permanent leadership training and PM
Increased focus on decision making and communication skills.
A company can succeed in strategy development and project management. But until it binds them together, it will not be able to achieve global goals. BRM was created for this unification.
The approach provides an effective dialogue between management, owners and PMs. Benefits Realization Management establishes the necessary conditions for success: the right behavior patterns and quality skills.
Increasingly introducing the principles of this approach, the organization wins in a tough business environment and completely changes the organizational culture. This does not happen at one moment: BRM gradually and consistently adjusts the already used concepts for the realization of strategic benefits.