SPONSORS

SPONSORS

Realizing the Benefits

Earned Benefit tells you how much, but you need to know when!

 

Applying Earned Benefit Management

SERIES ARTICLE

By Crispin (“Kik”) Piney, PgMP, PfMP

Southern France

 



This article builds on all of the ideas described so far in this series, to provide an innovative and powerful tool for forecasting, optimizing and tracking the actual business performance of programs and their contribution to benefits realization over time.

Introduction: Link to the Previous Article

Earlier articles in this series [Piney 2018b, Piney 2018c, Piney 2018d, Piney 2018e] explained how to apply cost and benefit evaluation algorithms to a representative case study. [Piney 2018b] revealed that one of the component projects would cost more than it contributed to the overall benefits. The previous article in this series [Piney 2018e] analyzed this situation in detail based the concept of essential links and demonstrated the problems that can be caused by taking a simplistic approach to addressing this type of issue.

The current article brings all of these ideas together and adds in the effect on the benefits realization schedule of any lags between successive nodes in the Benefits Realization Map. These lags correspond to the delays that can occur between the availability of a capability and its effect on creating the corresponding outcome, or between an outcome and the full realization of the corresponding benefit.

In order to allow this article to be understood independently of the earlier ones in the series, some reminders and one clarification are provided below, plus an overview of the case study,  prior to addressing the current topic of time-factored benefits realization forecasting and analysis.

Reminder on Benefits Realization Maps

A Benefits Realization Map (BRM) illustrates how to make the benefits happen. The BRM for the case study is shown in Figure 1.

Figure 1: Complete Benefits Map

BRMs can be developed as follows:

Top-Down Decomposition

Once the anticipated benefits have been defined by the strategic sponsor, you need to determine all of the steps that are required for delivering this result, as well as their interdependencies, thereby allowing you to identify the necessary component projects (“initiatives”). The links from each logical step to the next are quantified based on their relative importance for delivering the benefits (the “contribution fraction” for the link).

The Benefits Allotment Routine (BAR) uses the forecast benefit value of the strategic objectives in conjunction with the link information to calculate the contribution to the anticipated benefits of every node in the BRM. In particular, the BAR provides the contribution to the anticipated benefits of each component project. This value is known as the “Earned Benefit At Completion” (EBAC) of that component project.

One additional link characteristic concerns “essential links”.  An essential link is a link from a node that is an absolute prerequisite to the destination node. Removal of the corresponding source node would cause the destination node to disappear even if there are other contributing nodes. To model the potential unavailability of an essential node, the Pruning and Link Evaluation (PALE) algorithm provides the mechanism for removing all relevant nodes and rebuilding the corresponding benefits map from what remains of the original BRM after node removal.

More…

To read entire article, click here

 

How to cite this article: Piney, C. (2018). Realizing the Benefits: Earned Benefit tells you how much, but you need to know when! Series on Applying Earned Benefit Management, PM World Journal, Vol. VII, Issue IX – September. Available online at https://pmworldjournal.net/wp-content/uploads/2018/09/pmwj74-Sep2018-Piney-Benefits-series-part-4.5-realizing-the-benefits.pdf

 



About the Author


Crispin Piney

Southern France

 

 

 

After many years managing international IT projects within large corporations, Crispin (“Kik”) Piney, B.Sc., PgMP is now a freelance project management consultant based in the South of France. At present, his main areas of focus are risk management, integrated Portfolio, Program and Project management, scope management and organizational maturity, as well as time and cost control. He has developed advanced training courses on these topics, which he delivers in English and in French to international audiences from various industries. In the consultancy area, he has developed and delivered a practical project management maturity analysis and action-planning consultancy package.

Kik has carried out work for PMI on the first Edition of the Organizational Project Management Maturity Model (OPM3™) as well as participating actively in fourth edition of the Guide to the Project Management Body of Knowledge and was also vice-chairman of the Translation Verification Committee for the Third Edition. He was a significant contributor to the second edition of both PMI’s Standard for Program Management as well as the Standard for Portfolio Management. In 2008, he was the first person in France to receive PMI’s PgMP® credential; he was also the first recipient in France of the PfMP® credential. He is co-author of PMI’s Practice Standard for Risk Management. He collaborates with David Hillson (the “Risk Doctor”) by translating his monthly risk briefings into French. He has presented at a number of recent PMI conferences and published formal papers.

Kik Piney is the author of the book Earned Benefit Program Management, Aligning, Realizing and Sustaining Strategy, published by CRC Press in 2018

Kik Piney can be contacted at [email protected].

To view other works by Kik Piney, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/crispin-kik-piney/