When leaders measure the success of a project, or check-in on its status, they usually ask the project manager, “Is the project on schedule? Will it be completed by the due date?” This focus on meeting project deadlines and schedule ripples through the organization and influences how a project manager and a project team approach their project.
We believe that this emphasis on project schedule distracts a project team from their real purpose, which is to ensure that the benefits promised in the original case for the project are actually delivered. Taking a benefits-based approach, where the project milestones are linked to the delivery of benefits rather than simply completion of tasks can significantly improve the realization of business benefits from a project. In this article, we articulate such a benefits-based approach and show how it can be applied to any project.
Consider the following all too common, albeit simplified example: A technology project has a looming go-live date. As usual, there is a lot of work to be done and the entire project team is putting in long hours to ensure their tasks are completed prior to go-live. End-user training was completed a few weeks ago but some users could not attend the training for a variety of reasons. As a project manager, you now face two options:
1) Re-assign critical team members to deliver a second round of training (possibly delaying other tasks and go-live), or
2) Schedule a round of training after go-live.
A project manager who is measured on the ability to meet project deadlines has a strong incentive to choose the second option, with the result that not all end users are fully trained at the time of go-live.
How can such users use a system if they haven’t been trained? Obviously, an organization does not get any value by just having a system live. The value is realized when people actually use it! And yet, we often see project managers who have incentives to make the wrong choices as they deliver projects.
Such choices have a long term impact on user behavior. The emphasis on tracking task completion by date results in not tracking user training and system adoption as a metric for success. It is easy to miss early warning signs that users may be finding a system difficult to use, or not using the system and relying on other workarounds. When such problems are eventually detected, the problem may be much more widespread and difficult to resolve. These issues apply not just to technology delivery projects, but all kinds of projects in general.
Case Study No. 1
An organization had implemented an ERP system on time and under budget. However, in order to complete the project within the schedule, end user training had to be drastically cut down. At the time of go-live many of the users had not been trained to use the system. After go-live, due to a lack of training budget, internal “super-users” had to perform all training, rather than bringing in external experts. As a result, the quality of training suffered.
Over the years, due to natural attrition, fewer and fewer end users were sufficiently trained in making full use of the system. After many years of implementation, the organization was still not effectively using their ERP and had developed a parallel set of easy-to-use duplicate systems based on paper, excel and other rudimentary technology. This resulted in wasted effort and cost.
In a benefits-based approach, we measure the realization of benefits. Instead of focusing on deadlines, leaders should focus on metrics such as the percentage of users actively using the system, the percentage of users satisfied by functionality, the degree to which the benefits promised in the business case are realized.
In our example above, the project manager would have no reservations in selecting Option 1 and setting up training for the remaining users immediately. As a result, all users would be properly trained by go-live and the system will be used effectively from day one. Since the success of the project is measured by the extent to which it is used, rather than by meeting some arbitrary deadlines, usage of the system and its adoption will be closely monitored and the organization can be assured that business value is realized.
Case Study No. 2
An organization embarked on a major program to outsource their IT infrastructure. A large contract with a major IT service provider was the centerpiece of the initiative that included establishing the post-contract governance organization to manage this new arrangement. As contract negotiations dragged on, the major milestones associated with contract signature loomed and the program manager who was leading this large and complex project grew nervous.
He shifted resources to support completing the transaction and away from developing the governance organization. As a result, the governance organization was significantly delayed and wasn’t positioned to manage the new contract when it was signed. The client organization incurred additional vendor costs due to a lack of contract oversight and user satisfaction suffered.
This PM was overly focused on signing the contract and failed to recognize that the real value of the project was in effectively managing the vendor and their agreement.
Taking a benefits-focused approach does not mean re-vamping the existing approach to project management, but simply re-orienting the metrics used to measure success. For any project, four simple steps can be taken to ensure a more benefits-focused approach:
1. Ensure benefits are clearly defined before starting a project, preferably in a quantified manner.
2. Identify simple metrics that allow tracking the realization of benefits.
3. When developing the project plan, identify a realistic time line for benefit delivery.
4. Setup project milestones to match the delivery of benefits.
In summary, taking a benefits based approach is a different way of running a project and can result in a significant improvement in the adoption of a new technology and the success of the project.
Nilesh Chandra is an experienced technology consultant PAConsultingand an expert in helping clients define strategy and implement their large enterprise programs. Nilesh is passionate about helping clients get value from their technology investments and his deep understanding of large enterprise systems in areas of supply chain, Finance and HR enable him to successfully deliver results for clients. Nilesh can be reached at [email protected].
Scott Lever is an expert in outsourcing, transforming IT performance, and organizational design. Scott works with clients considering and implementing outsourcing solutions across a range of business processes including IT, finance, and human resources. Scott can be reached at [email protected].