Sigma defines Benefits Realization Management as “The process of organizing and managing, so that potential benefits arising from an investment in change are actually realized.” All good, but a better question might be: “Why Benefits Realization Management?” And one short answer to that question is: “To manage stakeholder expectations.”
If you Google “‘Project Success Rates,” you’ll find yourself knee-deep in statistics suggesting that 10%-20% of IT implementations are considered outright “failures,” while 30%-40% are considered “challenged.” The Standish Group's recent 2009 report was even more sobering, reporting a marked decrease in project success rates, with only approximately 32% of all projects succeeding, 44% considered challenged, and 24% cancelled prior to completion or delivered and never used.
In summary, 40%-60% of investment in technology implementations are perceived, rightly or wrongly, as not “successful,” and that is certainly cause for concern.
Most organizations have a vision or end goal in mind when undertaking a technology implementation. However, that goal is often expressed in terms of delivering / implementing capability, rather than fulfilling business objectives or realizing benefits. The result? In the absence of defining business benefits up front and providing a map for how and when they will be realized, organizations continue to focus on managing the implementation of “enablers” within the traditional metrics of time/scope/money. And this, unfortunately, contributes to the perception that only approximately 50% of "projects" are successful.
Benefits Realization Management provides a discipline for managing business change from the perspective of achieving intended business results. The focus is on identifying and measuring benefits - not on identifying and measuring costs. This is a significant shift because it entails identifying, up front, what constitutes success for each stakeholder group impacted directly or indirectly by the change(s). A Benefits Realization Plan then focuses on identifying which benefits will be delivered when, and who will be responsible for monitoring and reporting. And this provides the foundation for managing expectations going forward.
Setting and managing expectations in the form of a Benefits Realization Management Plan requires intentional focus and effort, but it reaps tremendous relational benefits. Managed expectations set the stage for clearly articulating benefits, and subsequently reporting when and how those benefits have been met. This instills confidence and increases support from all stakeholder groups on downstream business changes, which in turn fuels a culture of “successful change management” within organizations.