The sponsor for your PMO wants to know if the projects delivered under your organization have delivered value. They don’t want vague assurances that somehow or someway past projects have delivered value. They want evidence that projects have benefited the organization. This is why a well-organized framework around capturing and reporting on business benefits is one of the most valuable services your Project Management Organization can offer.
Unfortunately, capturing business benefits long after a project has closed is a hard thing to do. Everyone gets busy, people take other jobs, or business sponsors lose interest in measuring the business benefits. This article offers suggestions around building the right mouse trap to capture your elusive business metrics. If your PMO follows the suggestions in this article, your organization will enjoy the advantages of working on projects that have strong business cases.
Start with a Definition of What Types of Business Benefits will be Measured
Business Benefits come in a number of different categories. The following table lists five different business benefits:
The Role of the Sponsor Versus the Role of the Portfolio Manager in Establishing the Business Benefits for Each Project
The Project Sponsor is accountable for articulating how the Project will benefit the business. The PMO Portfolio Manager (or whoever is in that role in your PMO) is responsible for helping the Project Sponsor translate the business benefit into a format that can be measured effectively.
Initial Translation Considerations
- Use the measurement type from one of the five measurement types listed above.
- This is how the measurement is to be made for the business benefit. It is important that a viable method is available to measure the benefit. Often, business benefits are identified in which there is no feasible method of getting a measurement. For example, the data to measure the business benefit may not be currently being captured. You will want to avoid this issue.
- You need to help the business sponsor identify the following dates for measurements of the business benefit:
- The Baseline Measurement Date: The date the initial measurement will be done. This initial measurement will be compared against future measurements to determine if the Business Benefit was realized.
- The Final Measurement Date: The date the final measurement will be done. This is the measurement that will be compared against the baseline measurement. This data will be used to show whether or not the business benefit was achieved. Note that this date can fall long after the planned delivery of the project. This is normal. Business Benefits may materialize some time after the delivery of the project.
- Each of these measurement dates will need to be entered and tracked in the portfolio along with all other project data. This ensures the Business Sponsor is held accountable to ensuring the measurements actually get done.
The initial translation of the business benefit should be done during the initiation of the project. I cannot emphasize enough that this work is key to making sure that that the business benefit is measured once available for measurement. This is the mouse trap that must be set in order to capture the business benefit later on.
Getting to Final Measurement
Now, the most important task for the Portfolio Manager is to watch the project progress. Among the most important things to watch for are:
- The Project Completion Date: If the delivery date for the project moves then there may be a shift in the dates associated with the business benefit. If the date moves, then touch base with the sponsor to see if a new measurement date needs to be established.
- The Project Sponsor: People change jobs. It is important to ensure that you are in touch with the business sponsor and do not lose contact for who is in this role. If this person changes, then please re-establish expectations around how the business benefit will be measured.
- Changes in Scope: If the scope of a project changes then the project manager should determine if there is an impact to the business benefit. If so, the Portfolio Manager should be notified who will get in touch with the sponsor to discuss the business benefit impact.
- The Final Measurement Date: Don’t lose sight of this date! You planned carefully for this. Make sure the business benefit gets measured as expected, even if this date falls long after the delivery of the project.
You will trap your business benefit if you keep an eye on these (4) things. Furthermore, track each of these things in your portfolio tool. In so doing, this will help to provide effective future reporting.
Business benefits are elusive. Proper planning will ensure business benefits will be trapped and captured for later analysis. The key is to make sure you watch your dates and are staying in communication with your business sponsor. By doing so, you will have data to report back to your executive leadership showing the true benefits your portfolio of projects is delivering back to the organization.
Tell me your thoughts in the comments and let’s open a dialog. I would be excited to hear other opinions on this topic.
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