Why do companies undertake large expensive projects? The answer must be that the end results provide benefits that outweigh the costs of the projects.
Imagine when Apple Computers first thought about moving into mobile phones. They grew up as a computer company, and then added music with the iPod. But now with cash reserves of over $1 billion, they are one of the most successful companies in history. And this is largely due to the iPhone, at one stage a completely new project for them!
Another great example is Amazon’s move into cloud services. Amazon is now one of the largest cloud services providers in the world. And they started out just as an online sales company.
A lot of companies are not so successful, when large expensive projects fail to produce the benefits sought. Recently the NT state government announced that it had cancelled its assets management system, with the statement “the system was originally supposed to cost $7.2 million, but will cost the taxpayers of the Northern Territory $70 million. Yet the system is fundamentally broken”. Not a good result.
What is Benefits Realisation?
An emerging tool in successful project management is Benefits Realisation. This is not an evaluation of the project after it is finished, to see if it has achieved its goals. Benefits Realisation is a continual process that takes place throughout the project, evaluating the project as it evolves, to ensure that the original goals are being addressed. The process makes sure the project aligns with the business outcomes desired. It also manages any corrective actions that are needed, plus reports on the risks to the project. It achieves this by carrying out regular benefits reviews.
It is easy to lose sight of the original goals
One example where Benefits Realisation would have helped was a university student record system upgrade project that I was asked to investigate. When the upgrade was implemented, the system had several problems. These took months to resolve at a critical time of the year for students. Afterwards, the university wanted to find out what went wrong and how to prevent it happening again.
When I analysed the project I discovered that the original goals of the upgrade had all been deferred to a later project. In fact the upgrade was not really required as the original goals were no longer included. But the momentum of the project, the deadlines set, the time and expense already invested in the upgrade project drove it on. It went live and thereby suffered problems. Continually running a Benefits Realisation as part of the project would have convinced the university to defer the upgrade. This would have prevented the problems occurring. But then hindsight is a wonderful thing, isn’t it.
Successful Benefits Realisation Projects
There are many good examples of the use of Benefits Realisation. Two in the education sector worth mentioning are the University of Tasmania and the University of Auckland. The UTAS site lists a useful Benefits Activity Matrix. The University of Auckland link is an excellent article on how they setup a successful Project Management Office incorporating Benefits Realisation. The NSW State Government also has an active Benefits Realisation program.
To enhance your Project Management skills, consider taking an extra course in Benefits Realisation.