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A summery of Benefit Realization Management

Today is the final day of the “Strategies, Benefits and Alignment” course. I can’t believe that almost two months have past since the program introduction and the initial lecture. As I stated in my previous blog post I will try to summarize the essence of the two books “The standard for Portfolio Management” and “Benefit Realization Management – A practical guide” in the two final blog posts of the course. Today, it’s time for “Benefit Realization Management – A practical guide”.

What is Benefit Realization Management
Benefit Realization Management (BRM) is a framework, developed by PMI, that aim to provides organizations a way to measure how portfolios, programs and project deliverer value to the organization. Business strategy is fundamental to BRM as it utilizes a holistic approach to derive, plan, manage and track the identified benefits, beyond the scope of a particular portfolio, program or project.

BRM is constituted by three phases: identify, execute and sustain. During the identify phase, senior management identify the benefits to be pursued by the organization and determine whether a portfolio, program or project could produce the intended business result. During the execute stage, portfolio managers, program managers and project managers plan and execute activates to achieve the requested outputs that realize the identified benefit. The goal of this stage is to maximize the opportunity of benefits being realized while minimizing the risk of future benefit being forfeit. The last phase, sustain, is where plans and activities are executed to sustain the values obtained if or when the current conditions (market, strategy, legislations etc.) change.

Core principals
PMI have identified five core principles of BRM: net benefits justify the use of invested resources; commencement of work is driven by benefits identification; planned benefits are identified in authorizing documents; benefits realization is holistically planned and managed; and governance and adequate resources are essential to BRM success. When applied, these core principals align and structure the work of the organization to ensure that the organization strive towards the right set of goals and resources are well spent.

Benefit tracking
BRM emphasizes on benefit tracking as a critical success enabler. In order to monitor the identified benefits throughout their lifecycle, identified benefits needs to be organized, categories and assigned to the different initiatives of the organization. Tools, such a benefit register, a benefit map or a benefit traceability matrix could constitutes a charter of authorized benefits and visualize the plan of how they will be achieved. This will also help senior management to illustrate how changes of strategy or priorities affect the overall benefit realization plan.

Culture
BRM emphasize on building the right culture with clear roles and responsibilities. To enable the successful implementation of BRM a culture that embrace changes must be established and where executives, initiative leaders, suppliers, individual contributors, and stakeholders are able to easily identify the intended outcome of each initiative; not just the deliverables. Some might even argue that the definitions of project success must be redefined within organizations implementing BRM.

According to me, these are the foundations to begin your implementation of benefit realization management. However, there are more subjects and several critical success enablers that should be considered. Please read the full book for further details.

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A summery of Portfolio Management

We’re reaching the end of October which means that the first course of my masters program, “Strategies, benefits and Alignment”, is almost done. It’s time to summarize what I learned during the last two months and what I will bring with me in future roles and employments. I’ve planned for two final blog post that will try to encapsulate the essence of the two books “The standard for Portfolio Management” and “Benefit Realization Management – A practical guide”. In this first post, I’ll summarize “The standard for Portfolio Management”.

What’s a portfolio?
According to PMI’s definition, a portfolio is a collection of projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives. The components are grouped, which means that they coexists; they relate to each other; affect each other; share common resources and are a part of the same organizational system even though they may produce individual, specific, deliverables.

How are portfolios managed?
Portfolios are managed on a strategic level and the portfolio should reflect the strategic objectives or benefits identified by the organization. This means that portfolio managers must strive to continually align their portfolio and underlying components to that strategy and the decisions of executive management. Portfolio managers also ensure that stakeholder are engaged and that underlying components are scheduled, prioritized, coordinated and that the capacities and capabilities are balanced to enable the realization of the desired benefits. In addition to well-developed communication and leadership skills, portfolio managers must possess systems thinking i.e. the ability to understand how different components of the portfolio are interrelated and interdependent of one another.

PMI have defined a generic life cycle for portfolio management based on four stages; initiation, planning, execution and optimization. During the initiation stage, the organization established the scope, governance, processes, plans and criteria’s to manage and monitor the portfolio; prioritize and execute projects and to communicate with stakeholders. The planning stage, which is returned to in an iterative manner, aim to identify interdependencies between portfolio components and to prioritize these; to ensure that components are within the scope of the portfolio; that components are financed; to identify risks and issues; and to review available metrices to measure and evaluate the progress and success of the portfolio. The execution phase is performed throughout the accomplishment of each component. During this stage portfolio managers monitor the executed projects to ensure that the identified benefits are achieved by the deliverables of the projects; that the risks of the portfolio are maintained and managed; and that information and status updates flows within the portfolio. The purpose of the final stage, optimization, is to make the portfolio as effective as possible. This phase is usually executed when a project or program is added or closed and aim to review metrices, gather lessons learned and to implement suitable improvements.

Portfolio strategic management
Without a continual alignment to the strategy of the organization and the decisions of senior management, there is an eminent risk of the portfolio not delivering the expected outcomes and the resources invested being forfeit. The process of portfolio strategic management ensures that the portfolio is aligned and the components are within scope but also assists in advising senior management by visualizing the impact of their decisions. Portfolio strategic management involves setting the strategic objectives of the portfolio; establishing a portfolio charter; outlining the portfolio road map; and defining the components of the portfolio. PMI emphasize on two topics related to this that I appreciate, a culture of embracing change and risks; and stakeholder analysis.

Value management
Portfolios have no self-worth, they exist on the sole purpose of delivering a desired value; a strategic objective or identified benefit. What’s considered valuable for an organization must be defined by the organization itself but no initiative should be commenced without an identified value as the driver. However, value is seldom generated through the execution of a single project nor it’s deliverables; it’s when these deliverables are released into operations or have reached the market that value is generated and can be measured. Changes in internal and external requirements order the portfolio managers to continually align, prioritize, schedule and reschedule portfolio components to achieve this.

Value management is the process and practices aimed to negotiate the expected value of the portfolio and the underlying components, realizing them, maximizing the return of investment and reporting the progress. Though I personally believe that PMI have created a process too extensive for most companies, negotiating the expected values to create unambiguous expectations of the portfolio and to ensure that all components have associated business cases should be considered a critical success factor for any company implementing a portfolio.

Capacity and capability management
A key concept of a portfolio is that the components share common resources. This makes capacity and capability management a crucial and complex element in the planning and execution of the portfolio. PMI categorize the organizational capacity into four major categories: human capital; financial capital; assets; and intellectual capital. Next, they structure their approach for resource management based on four elements: capacity planning; supply and demand management; demand optimization; and reporting and analytics. PMI offers an extensive description on how to manage these elements and during the course of the written assignment I found an interesting framework that utilizes an agile approach – in a seemingly effortless way – to allocate capacities and capabilities.

As portfolios span over multiple years it is important to keep track on what resources and what capabilities are needed in the short perspective as well as the long perspective to ensure that the requested capacities and the required capabilities of the portfolio are developed or acquired in time.

Portfolio risk management
Risk management is the process of balancing the risks and opportunities of the portfolio to ensure that the portfolio components deliver the expected outcome with regards to business strategy. Since a portfolio is managed on a strategic level delivering upon the strategy of the organization, risks must be handled accordingly. There are a multitude of risks that could affect the portfolio negatively if not managed. Missed deadlines or poor deliverables are examples of internal, “component based risks” that could affect the outcome or value of the portfolio; changes in legislation, budget cuts or a change of strategy are other risks that could affect every components within the portfolio.

PMI provides an extensive description of portfolio risk management and the implementation of a framework to ensure that a portfolio risk management plan (risk tolerance and risk process) are established; that risks are identified and assessed (probability, impact, tolerance, interdependencies etc.); and that the appropriated responses are documented and tracked.

According to me, these are the foundations to begin your implementation of portfolio management. However, there are more subjects and several critical success factors that should be considered. Please read the full book for further details.

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Zombie projects and how to kill them

It’s the last week of the course “Strategies, benefits and alignment” but also it’s about time for Halloween! In celebration of this spooky festivity I found an interesting post about zombie projects (project that won’t end, are impossible to kill and drains all the energy of the organization) at girlsguidetopm.com.

We’ve all seen these projects and probably been involved in them as well. It’s important to spot them and know how to handle them – garlic won’t help!

Read the full post here: https://www.girlsguidetopm.com/zombie-projects-and-how-to-kill-them/

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An agile framework to assign resources

Last week I wrote a short paragraph about how the organization I examined for the written assignment used an agile framework to allocate resources from their line organization to projects. The organization had implemented a framework based upon the book “Agil Organisering med Pulse” (Agile Organization with Pulse). Though I didn’t have the time to witness one of their pulse meetings, the concept seemed to work pretty good in the department where it was implemented.

The first week of every month, project managers could request resources from the line. The project were then prioritized based on criteria that were never really revealed to me; I assume the basis was intangible and agreed upon on during each monthly meeting.
The work packages were not allowed to be bigger then 40 man hours and were usually said to be around 8-24 work hours. In addition, the project managers were not allowed to request individuals only the amount of resources and the specific skillsets they needed. Once the meeting was held, line managers went back to perform their internal monthly planning.
Each week a short meeting was held where line managers allocated their available resources to the planed work packages of the following week. Since the projects were prioritized the available resources were assigned accordingly. When a common capability was needed in multiple projects they tried to balance the resources pool in such a way that most project (usually all project) received their requested resources.

Using this framework, the organization had increased their productivity by utilizing the full capacity and capability of the department where the framework was implemented. It also illustrated when the organization had executed to many project simultaneity as some projects were not assigned the required resources.

References

  • Ulla Sebestyén. (2017). Agil Organisering med Puls – Dynamik på osäkerhetens arena. Rönninge: Parmatur HB.
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Quote of the week

Agile in concept is the antithesis of a sweatshop. It’s a kind of management that can enable talent to bring their smarts, empathy, and ingenuity to the workplace. Whatever this kind of management is called—and some firms prefer to use a label other than “Agile”—it isn’t just a new management process. It’s a fundamentally different way of running an organization, even, according to McKinsey, “a change the fundamental DNA of an organization.” It’s a way of coping with rapid massive change in a way that bureaucracy can’t.

This is a quote from a post published by Steve Denning at forbes.com. In his post he writes about how companies fake being agile when in reality they are quite the opposite. Steve also references the agile mindset vs. the bureaucratic mindset that clearly illustrates how different cultures view goals, how work get done and they see organizational structures.

The post can be found here: https://www.forbes.com/sites/stevedenning/2019/08/18/another-form-of-fake-agile-the-agile-sweatshop/#30abfda84cd7

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Project Closure Review

Whenever a project or sprint has come to an end, a period of retrospect is due to identify what went well, what could be improved and what should be done to improve the situation.

Today, I stumbled upon a post at projecttimes.com related to project review processes. The author have compiled a list of reasons why reviews aren’t performed and I’m pretty sure it’s spot on! Lack of time, fear of confrontation and a culture of blame will hurt the overall progress of continual improvement within an organization.

The author continues to describe the process, agendas and how to involve your team in this progress – it was a good read!

Read the full article here: https://www.projecttimes.com/articles/establish-an-effective-project-review-process-overcome-the-obstacles-to-improve-performance.html

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Hard skills vs soft skills

In last weeks lecture, Gunnar touched upon the topic of hard and soft skills. As many already realized, the demand for soft skills have increased and started to outweigh hard skills in recruitment.

There is a really interesting speech by Gary Vaynerchuk called “Why you might need to fire your most talented employee” that tends to pop up in social media every now and then.
In my experience, hard skills can be taught and are usually taught in a quite a short timespan. Changing someone’s behaviour on the other hand is a much more challenging process and poor behaviour could have severe consequences within organizations. IT is teamwork, it’s the everyday interaction between team members that enable us to move forward.

As leaders, we need to make tough decisions, have uncomfortable discussions and be clear in our expectations of the staff to build the right culture in our work environment. In addition, it’s equally important to listen to your employees and to find out what motivates them.

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Thoughts of last weeks lecture

Times fly when you’re having fun. I completely missed that a lecture was posted last week so I have a lot of catching up to do. I can’t believe this course is almost over and unless I’ve been misinformed, this was the last “lecture” of the course even there is another QA planed.

The title of last weeks lecture was “Capacity, Capability, Stakeholders and Risk management” and was held by Gunnar Wettergren. Once again Gunnar delivered and interesting and entertaining lecture, I appreciate the informal style and tone of his lectures.

I’ve written a previous post on utilization of capability in large, hieratical organizations and how it would be interesting to study this in a later assignment or thesis. In this lecture Gunnar, and the students, talked about this in the context of portfolio managers not owning resources.
In the written assignment I looked at an organization that used an agile framework to handle this in one of their departments. There were limitations but the framework seemed to be working really well for smaller projects and initiatives. I’ll write a blog post about it later this week.

I agree with Gunnar that stakeholder is a tricky bit. Identifying stakeholders are perceived as easy but my experience tells me it’s harder then most people think. Getting stakeholders involved and getting them to realize they are important for the success of a project or that they will be affected by the deliverables of the project can be a time consuming task. Assessing the engagement level to identify possible activities seems appropriate. I found the visual representation to be really useful.

What’s your thoughts on the lecture? Did you take anything with you? Please, leave a comment!

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The written assignement is complete

Finally, the written assignment is complete. This assignment took much longer time then I expected it to but it have been highly rewarding. I’ve might have taken Gunnars word a bit to literal but I embraced the role of a consultant and evaluated the organization and came up with a lot off suggestions to improve their current situation. Yesterday I presented my conclusions to managers of the organization and even though they already identified much of their problems, they were happy with my conclusion and recommendations.

Abstract

This report aims to assist a Swedish government agency in their ongoing improvement initiative to increase the return of investment and strategic alignment of their IT division. The objective of this report is to investigate how the strategic objectives and identified benefits of the agency are tracked, prioritized and realized by the IT division and to present suitable suggestions on how improve the current situation.

The ability to continually prioritize, track and align the provided services, executed projects and day-to-day operations to the strategic objectives of the agency is vital to ensure that the invested resources deliver the expected outcomes and that the balance between organizational capabilities are maintained.

The conclusions of this report are primarily based on the review of formal documentation and the internal processes of the IT division. To complement this review, three interviews with managers within the IT division were conducted.

The findings of this report indicate a disconnect between the strategic management of the agency and the management of the IT division. This disconnect had already been identified within the agency and actions to mitigate the situation was already initialized. To improve the current situation the author of this report suggests that initiatives should be commenced to promote a holistic approach and governing body to ensure that:

  • strategic objectives are echoed throughout the organizational body;
  • commenced work contribute to the strategic objectives; and
  • activities are registered, prioritized, evaluated and tracked throughout their lifecycle.

If anyone would be interested in peer reviewing the report before hand in I would highly appreciate it.

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Building the right culture

Today is Saturday and I’m happy to say that the written assignment is more or less complete. Throughout the course I’ve had a few topics that keep on coming back in my mind. Today, I’ve been thinking about organizational culture and it’s connection to the successful delivery upon goals. I’ve already written a post about the importance of a clear, unambiguous vision and mission statement but this does not guarantee a successful culture change.

To be honest, I’m not sure how this culture is built but I’m pretty sure it’s best performed using dialog, not documents, and local resources acting as role models for the organization. In my literature review for the written assignment I find it pleasing that the value driven culture is given such focus in the books, papers and frameworks I’ve studied. The BRM framework is said to echo the organization’s value-oriented mindset, ITIL focuses on value from a customer perspective, papers have suggested that companies need to redefine what a project success means in order to secure organizational benefits rather then the fulfilment of a particular benefit.

Got any idea on how to build this culture? Please let me know!