SPONSORS

SPONSORS

The Benefits of Stakeholders

 

Applying Earned Benefit Management

SERIES ARTICLE

By Crispin (“Kik”) Piney, PgMP, PfMP

Southern France

 



This article builds on the ideas described earlier in this series, and applies the Benefits Map to provide a more detailed stakeholder analysis and ensure alignment between benefits, stakeholder engagement, and strategy.

 

Introduction: Program Stakeholders

However good the strategy, planning, and general governance, a program can only succeed with the active support of key stakeholders. Even when the key stakeholders have been correctly identified, one common mistake is to focus only on their principal or most obvious relationship with the program. Although this narrow focus may be a valid approach for projects, it is insufficient for programs due to the complex interactions between the program components.

The current article will explain how to apply the Benefits Map and the assocated algorithms to broaden the initial analysis of the stakeholders’ principal focus to include their extended impact on other areas of the program.

Link to Previous Articles

Earlier articles in this series [Piney 2018b, Piney 2018c, Piney 2018d, Piney 2018e, Piney 2018f] explained how to apply the Earned Benefit cost and benefit evaluation algorithms to a representative case study.

The current article changes topic, away from finance and towards people

In order to allow this article to be understood independently of the earlier ones in the series, some reminders are provided below, plus an overview of the case study,  prior to addressing the current topic of extended stakeholder 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.

BRMs can be developed in two steps, as follows:

Top-Down Strategy 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 contribution fractions 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.

Because of the way the BRM is drawn with the strategic outcomes on the right and the component projects on the left, this top-down approach is also characterized as “right-to-left”.

Similarly, the bottom-up approach is also known as “left-to-right”.

Bottom-Up Component Evaluation

Once the full set of parameters that define the model is known (predicted benefits, estimated cost per initiative, and the structure of the benefits map including the links and their contribution fractions), no additional assumptions on the model are required in order to evaluate to cost of each intermediate node in the model. The “Break Even Everywhere Routine” (the BEER) provides the additional link parameters (the “allocation fractions”) required for calculating the corresponding cost of each node based on the cost of the initiatives and the structure of the map.

The BAR and the BEER

It is important to understand the way in which the model works:

The BAR – by applying the contribution fractions – can be used to evaluate the top-down effect of nodes across the BRM and diffuse values from right to left. Although the BAR algorithm was initially applied to the contributions, it can also be used to diffuse any other program-related values across the model from right to left.

Due to the way in which the BEER was specified, the allocation fractions provide the means for distributing not only costs but also other quantities (such as node Earned Benefit) across the map from the initiatives (on the left in the BRM) towards the strategic outcomes (on the right).

In general, therefore, the strategic effects diffuse from right to left, according to the BAR. Tactical activities affect downstream nodes, from left to right, based on the BEER.

These features are fundamental to the ideas developed in the current article.

These ideas will be applied to provide a benefits-related stakeholder analysis on the ongoing case study.

The Case Study for the Current Article

The business objective of the program in this example is to increase profits for an organization in the area of customer service. The premise of the case study in that strategic analysis by senior management has shown that increased customer satisfaction with after-sales support enhances business results and has the potential for delivering additional revenue of €300,000 per annum compared with the current level of business, but that this service will also lead to an increase in operational costs amounting to 25% of the corresponding financial improvement, thereby reducing the net benefit by that amount.

In the previous articles, the steps to achieving the business objective were developed and quantified, all the way back from the required strategic outcome across to identifying the required projects. The corresponding BRM for this program, including the financial numbers and allocation fractions mentioned above, is shown in Figure 1.

More…

To read entire article, click here

 

How to cite this article: Piney, C. (2018). The Benefits of Stakeholders, Series on Applying Earned Benefit Management, PM World Journal, Vol. VII, Issue XI – November. Available online at https://pmworldjournal.net/wp-content/uploads/2018/11/pmwj76-Nov2018-Piney-Benefits-series-part-6-Benefits-of-Stakeholders.pdf

 



About the Author


Crispin Piney

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/