Project Management Best Practices, 5th Edition

19Benefits Realization and Value Management

19.0 INTRODUCTION

Organizations in both the public and private sectors have been struggling with the creation of a portfolio of projects that would provide sustainable business value. All too often, companies add all project requests to the queue for delivery without proper evaluation and with little regard if the projects were aligned with business objectives or provided benefits and value upon successful completion. Projects were often submitted without any accompanying business case or alignment to business strategy. Many projects had accompanying business cases that were based on highly exaggerated expectations and unrealistic benefits. Other projects were created because of the whims of management, and the order in which the projects were completed was based on the rank or title of the requestor. Simply because an executive says, “Get it done” does not mean it will happen. The result was often project failure, a waste of precious resources, and, in some cases, business value was eroded or destroyed rather than created.

19.1 UNDERSTANDING THE TERMINOLOGY

It is important to understand the definitions of benefits and value.

A benefit is an outcome from actions, behaviors, products, or services that is important or advantageous to specific individuals, such as business owners, or to specific groups of individuals, such as stakeholders. Generic benefits might include:

• Improvements in quality, productivity, or efficiency
• Cost avoidance ...