Project Benefit Realization Management: A Lifeline for Wrecked Projects
Project Benefit Realization Management (PBRM) practices constitute a critical component of an effective Project Governance Framework sustaining successful project management, particularly when dealing with high-stakes capital projects. By monitoring how the project outputs adhere to the business case demands and focusing on the tangible outcomes and benefits of a project, PBRM can help identify potential risks and issues early on, preventing projects from spiraling into disaster.
1.??? The Role of PBRM in Preventing Wrecked Projects
PBRM serves as a proactive mechanism for ensuring that projects deliver the intended value. It usually involves:
- Defining Clear Benefits: Establishing measurable, quantifiable benefits that align with organizational goals.
- Developing a Benefits Realization Plan: Outlining the steps required to achieve the desired outcomes and inherent benefits.
- Monitoring and Measuring Progress: Tracking project performance against the benefits realization plan.
- Adjusting as Needed: Making necessary changes to the project scope, resources, or approach to ensure that the resulting outcomes will generate the desired benefits as per the project business case.
By following these steps, at the minimum, sponsor organizations can identify potential issues early on and take corrective action before it's too late for the project.
2.??? PBRM in Practice
Balanced Scorecard: This strategic performance management tool can be used to measure the achievement of project benefits across various dimensions, such as financial, customer, internal processes, and learning and growth.
Benefit Cost Analysis (BCA): BCA is a technique used to evaluate the economic benefits of a project relative to its costs. By conducting a BCA, organizations can assess whether a project is likely to deliver the desired return on investment.
Examples of Capital Projects that Should be Paused Due to Avoid Wrecking Assets:
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- A large-scale infrastructure project: These projects can face unexpected geological conditions resulting in the need for the project to be paused to reassess the feasibility of the original design and explore alternative approaches.
- A new product development project: When market research indicated that the target market was not interested in the proposed product, the project can be temporarily paused to gather additional customer insights and refine the product concept.
- A technology implementation project: If technical difficulties or compatibility issues arise, these projects may be paused to address these challenges and ensure successful integration.
3.??? Final Remarks
Adopting PBRM practices and assessing lessons learned from past experiences can significantly reduce the risk of capital projects to deliver "wreck assets". Monitoring the development of the outputs and focusing on the desired outcomes allow sponsor organization to take proactive steps to address potential issues jeopardizing the delivery of the project benefits. PBRM practices help ensure that projects deliver the intended value and benefits, contributing to overall organizational success.
4.??? References
- Project Team Absorptive Capacity and Capital Project Success: The Mediation Role of the Governance Framework
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