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Realizing the Benefits Tutorial

Welcome to realizing the benefits tutorial offered by Simplilearn. The tutorial is part of the MSP® Foundation and Practitioner course.

In the previous lesson, we focused on ‘delivering the capability’. In this lesson, we will discuss ‘realizing the benefits’, which is one of the six transformational flows. The purpose of ‘realizing the benefits’ process is to manage the benefits from their initial identification to their successful realization.

We also discuss the steps involved in the process of managing the transition and managing post-transition.

Let us begin with the objectives of this lesson in the next section.

Objectives

By the end of this realizing the benefits tutorial, you will be able to:

  • Describe the inputs, principle controls, key roles and outputs of the process, ‘realizing the benefits’

  • Explain the steps involved in ‘manage pre-transition’

  • Explain the steps involved in the ‘manage transition’

  • Describe the steps involved in ‘manage post-transition’

  • Explain the responsibilities of various roles in the process, ‘realizing the benefits’

In the next section, let us discuss the position of ’realizing the benefits’ in the MSP® Framework.

MSP Framework

In the MSP® framework image shown below, ‘Realizing the benefits’ is placed in the innermost ring.

‘Realizing the benefits’ process-

  • Incorporates the planning

  • Incorporates management of the transition from old to new ways of working and

  • Maintains the stability and performance of operations.

‘Realizing the benefits’ works very closely with ‘delivering the capability‘ process. Both these processes are being governed by ’managing the tranches‘, which provides high-level direction, guidance, and control.

Let us now focus on ’Realizing the benefits’ process in the next section.

Realizing the-Benefits Introduction

‘Realizing the benefits’ process is about managing the benefits from their initial identification to their successful realization. The inputs, controls, roles, steps and outputs are as follows:

The activities of this process are repeated as necessary for each tranche of a program.

Inputs of the process, Realizing the Benefits

The inputs of this process are

  • The management information baselines,

  • Boundary information baselines, and

  • Governance information baselines.

  • In addition, the outputs from ‘delivering the capability’ constitute the inputs of this process.

Even before the capability is delivered, the preparation for transition is started.

Principle Controls in the process, Realizing the Benefits

The principle controls in this process are

  • Program Board monitoring which constantly and closely monitors the progress of realizing the benefits;

  • Benefits realization profiles and plan forecasts obtained from benefits realization plan support the Program Board monitoring;

  • Assurance and audit reviews that ensure the process is on track;

  • Business performance monitoring; and

  • Dependency management which ensures a smooth transition to a new process.

Next, let us discuss the key roles in ‘realizing the benefits’ process.

Key Roles in the process, Realizing the Benefits

The key roles in this process are played by-

  • The Senior Responsible Owner or SRO (read as S-R-O),

  • The Program Board,

  • The Program Manager,

  • The Business Change Manager or BCM (read as B-C-M),

  • The Program Office and

  • The business change team.

Steps involved in the process, Realizing the Benefits

‘Realizing the benefits’ process comprises three distinct sets of steps such as:

  • ‘Manage pre-transition’ which involves the analysis, preparation, and planning for business transformation;

  • ‘Manage transition’ which helps to deliver and support the changes; and

  • ‘Manage post-transition’ which reviews progress, measures performance and helps in adapting to the change.

We will focus on ‘manage pre-transition’ in this lesson. But first, let us review the outputs of ‘realizing the benefits’.

Outputs of the process, Realizing the Benefits

The major outputs of this process are:

  • Updated management baselines,

  • Transition prepared and completed,

  • Benefits measurement reports and

  • Business performance reports.

  • Benefits reviews are conducted and it is ensured that new operations have been stabilized.

  • All the planned outcomes have to be achieved for the transition to be successful.

  • All the legacy working practices and systems that are not required after transition are removed to ensure that people don’t revert to them.

In the next section, we will discuss the step, ‘manage pre-transition’.

Manage Pre-Transition

Managing pre-transition is focussed on preparing and planning the business operations for upcoming capabilities. The steps involved in this activity are as follows:

Step 1:

The first step is to establish benefits measurement which ensures that measures are defined for each of the benefits profiles and overall benefits in the benefits management strategy. It also identifies the information needs and performance baselines to measure benefits realization.

Step 2:

The second step is to monitor benefits realization. This step focuses on managing and controlling the benefits with the same degree of rigor as that of projects. It ensures that during the program, benefits realization will be reassessed and readjusted, with new change or opportunities.

Step 3:

The third step is to plan transition which includes detailed planning to ensure that the upcoming transition is smooth.

Step 4:

The fourth step is to communicate the change which is taking the affected business areas and individuals through the engagement cycle for planned changes. The purpose here is to raise awareness and ensure support.

Step 5:

The final step is to assess readiness for change. This step involves assessing the capacity of an organization to make the changes. This will help the organization to implement the changes successfully.

In the next section, let us focus on the first step, that is, ‘establish benefits measurement’.

Establish Benefits Measurement

The main focus of a program is the benefits realization. It is important to ensure that this is achieved by implementing relevant and reliable measurement processes.

Benefits measurement has the following requirements:

  • These measures are defined in each benefits profile and overall benefits management strategy.

  • The information that assists in measuring benefits should be current, which means that data should not be out of date as it will lead to inaccurate decisions. Ongoing reporting must capture current data.

  • The information should be accurate as in, it should not be based on unreliable or volatile sources. Preferably, there should be a second source of data to cross-check.

  • The information should also be relevant, brief and effective. If there is too much information, critical evidence might be missed.

  • The Business Change Manager should regularly test the validity and authenticity of the information provided.

  • To measure the improvements resulting from benefits realization, the ‘as-is’ or the current state needs to be provided. Without this, it will not be possible to assess the ‘to-be’ measurements.

  • To achieve this, business performance baselines to compare the benefits are needed. These baselines should be established early, preferably in ‘identifying a program’ as part of the ‘as-is’ section of program brief.

In the next section, we will focus on monitoring the benefits realization process.

Monitor Benefits Realization

Monitoring benefits realization undertakes the following tasks:

  • Throughout the program, progress is monitored against the business case, program plan benefits realization plan and blueprints to identify potential improvements and enhance benefit achievement.

  • In some cases, for example, when external circumstances have changed affecting the future course of the program, adjustments might be needed for benefits realization.

  • Monitoring and collaboration between projects should be benefit-focused. This can include assessing designs, prototypes and so on.

  • The focus should also be given to how well project outputs will work in a fully operational environment. This will help in realizing if there is enough improvement to produce the desired benefits.

  • Benefits and costs are of primary importance to the success of a program. During a program, there might be opportunities to maximize the benefits and minimize dis-benefits.

  • Change control needs to be established in business sections that are impacted by the blueprint. This will have an effect on benefits realization.

  • Any change in these sections should undergo strict scrutiny and analysis for impact on the benefits.

Next, we shall look at the strategic and operational level performance indicators under monitoring benefits realization step of the managing pre-transition activity.

Strategic level performance indicators and operational level performance indicators are as follows:

Strategic Level Performance Indicators

Performance indicators that show changes at the strategic level include:

  • Profitability,

  • Lost bids,

  • Legal actions,

  • Media coverage,

  • Insurance premium costs and

  • Revenue.

The positive performance indicators show that the organization strategy is working well.

Operational Level Performance Indicators

Performance indicators that show changes to operations include:

  • Staff turnover,

  • Productivity,

  • Customer satisfaction,

  • Process performance,

  • Service/product quality,

  • Staff morale, and so on.

The positive performance indicators help in assessing the progress of benefits realization. In the next section, we will focus on the next step, that is, ‘plan transition’.

Plan Transition

Change in an organization needs to be planned and managed carefully. Transition plans often include more details than any other parts of a program plan. The points that need to be considered while preparing a transition plan are:

  • Consideration should be given to the staff and their working practices as unlearning old habits are difficult. There should be proper motivation and support to ensure that they adapt to new practices.

  • Information and technology might be impacted by new benefits and care should be taken to upgrade them, if required.

  • Temporary facilities for personnel managing the transition will help them to work more effectively and closely with the program.

  • The level of stakeholder support and engagement in areas to be changed should also be kept high.

  • Cultural and infrastructural migration needed for the transition should be properly planned and executed.

  • Maintaining business operations during the transition is paramount as day-to-day operations cannot be stopped.

  • Back-out arrangements should be planned in case the change fails and there is a need to exit.

In the next section, we will discuss how to communicate the change.

Communicate the Change

A program communications plan provides the basis for effective communication. The risk register, vision statement, benefits realization and other plans, as well as the blueprint, provide key information for the communication required when reviewing and planning change activities.

Change must be communicated well before the actual transition. Delayed communication is likely to result in significant resistance. It is necessary as it takes affected business areas, operating units and individuals through the transition cycle for planned changes.

The purpose is to raise awareness and interest and to get them involved. In the next section, we will focus on the step, ‘assess readiness for change’.

Assess Readiness for Change

The Business Change Manager and the change management team play an important role in assessing readiness for change.

The responsibilities of the BCM and the change management team are as follows:

  • Implementing change is the critical responsibility of Business Change Managers and change management team.

  • They need to be fully engaged with project teams and business operations to ensure a smooth transition.

  • The Business Change Managers and change management team are responsible for planning and assessing viability before implementing changes.

  • The Business Change Manager is responsible for recommending whether the delivered capability meets the requirements of the business and if the business is ready for the transition.

  • Getting help from other organizations that have undergone similar changes will enable the organization to prepare and avoid problems in pioneering changes.

There are important aspects that need to be considered when assessing the change capability of an organization. It is shown in the image below:

The considerations can be explained as follows:

  • The first aspect is recent track record and experience of change in the organization. If this is a new experience and track record shows that change is not readily accepted by teams, the transition will be difficult and needs to be planned accordingly.

  • The second aspect is the availability of resources to support the change. It needs to be ensured that the resources to support the change are available in terms of volume, competency, and experience.

  • The third aspect is the need to analyze how the intended change fits into the organization’s culture and values, that is, whether it is more than a change to the way of working.

  • The fourth aspect is the need to ascertain the effectiveness of supporting systems that can enable change. These supporting systems can be a communications channel, process maturity, etc.

  • The fifth aspect is identifying the skills and mobility of the workforce. This will help in understanding how quickly and effectively the transition can be completed.

  • The next aspect is identifying the third-party supplier performance and alignment with change. If a supplier is unable to work in the ‘to-be’ state, alternative arrangements have to be made.

  • Finally, the service management’s ability to support the organization through transition and in its new operational state must be analyzed.

In the next section, we will discuss the various steps involved in managing the transition.

Manage Transition

Manage transition helps to deliver and support the changes. It involves five steps they are-

Step 1:

The first step in managing transition is to initiate the actual transition process once the capability is delivered by projects and the pre-transition plan is prepared.

Step 2:

Next, support arrangements must be established to ensure that there is a clear and concise direction for making rapid decisions. This will ensure that there are no unnecessary disruptions or delays.

Step 3:

The next step is to enact the transition. This begins as soon as the start of the transition is approved. The program and project staff enact the transition plan and monitors the progress.

Step 4:

The step that follows is ‘review transition’. This ensures that once new arrangements are in place, the transition is reviewed, lessons are documented and any follow-on actions and requirements are captured.

Step 5:

The final step is to manage outcome achievement which ensures that once an outcome is achieved, it is acknowledged through the program communications plan. In the following slide, let us focus on the first step, that is, ‘initiate transition’.

Initiate Transition

As the projects approach completion, relevant business operations need to be prepared for implementing the outputs from projects.

The points taken into consideration are as follows:

  • The transition plan is reviewed and updated to reflect the activities of transition. These activities need to be managed in a business environment, ensuring successful take-up of new capability while maintaining the business as usual.

  • The transition may be achieved in a single change to operations or it may be achieved through a series of incremental and modular changes.

  • The transition plan should be followed as the route map for implementation.

n the next section, we will discuss the support arrangements that need to be established during the transition.

Establish Support Arrangements

The considerations to establish support arrangements are as follows:

  • Managing the transition often requires careful consideration of an individual’s personal concerns. This also gives an insight into the issues that might be faced by the organization during the transition. These concerns can be related to the work environment and what the changes mean to them.

  • The transition may also impact external individuals and organizations. In such a case, support may be needed from Human Resource and system specialists.

  • A detailed change plan should be in place to avoid unnecessary disruptions. Once the transition plan has been delivered,

  • The Business Change Manager or BCM and the change management team must provide clear and concise directions throughout the transition.

In the next section, we will focus on what considerations are needed to enact the transition.

Enact Transition

Before starting the transition, considerations to be taken care of are as follows:

  • It needs to be ensured that all the required outputs from projects are complete, ready and verified for operational use and smooth functioning.

  • The operational staff should be trained and briefed on their new roles as well as on temporary duties that they may perform during the transition.

  • Before the transition starts, ensure that there are no risks and issues pending for which the new operations are unwilling to take responsibility.

  • All risks and threats should be accounted for and contingencies should be in place, in case the changes fail.

  • An arrangement for temporary transition management should be in place to guide through the transition.

Once all these things are in place, the Senior Responsible Owner or SRO, in consultation with the Program Board, approves the start of the transition. As soon as the start is approved, it is important to:

  • Verify that the staff understand their role in the transition and

  • Ensure they are aware of the transition management structure.

The transition is mainly the responsibility of the program team but it can be supported by project teams as well.

  • The teams should enact a transition plan and monitor progress,

  • React and adapt to events as they develop and

  • Ensure that the ‘stop or go’ criteria for aborting this implementation are monitored.

Monitoring of performance indicators will be important to assess the overall level of business stability.

In the next section, we will find out what needs to be considered while reviewing transition.

Review Transition

When the new arrangements are in place, the activities that need to be taken care of are as follows:

  • The transition should be reviewed,

  • Lessons documented, and

  • Any follow-on actions and requirements should be captured.

  • There should be broad engagement with stakeholder community to guide their perception, interest, and support for the program.

  • It is a very important stage for all concerned stakeholders, so effective communication should be in place.

  • At this stage, the Project Manager and teams can be disengaged as deemed appropriate.

  • The process of embedding the working practices leading to the release of benefits then starts, under the control of the program. New ways of working will certainly need a settling-down period.

  • The BCMs should ensure that the program provides sufficient support during this period.

In the next section, we will focus on ‘manage outcome achievement’.

Manage Outcome Achievement

‘Manage outcome achievement’ ensures that the achieved outcome is acknowledged through the program communications plan. The factors such as-

  • Realise outcome,

  • Acknowledge outcome,

  • Implement outcome and

  • Transition to the next outcome needs to be taken care of in this step.

Let us look at each of these factors in detail.

Realize Outcome

It is critical that outcomes should be fully-realized, working practices established and the business stabilized to reach the desired new state.

Acknowledge Outcome

Even though the process might take some time, it is important to actively acknowledge outcomes following instructions in program communications plan. But, care should be taken that the success is not declared too early.

Implement Outcome

It is important to wait until the business stabilizes in the new state following implementation of the outcome.

Transition to next outcome

There is a risk that if the program’s focus moves on to the next outcome too early, the operations may regress to the old ways of working without the support of the program processes and procedures. This will result in losing the progress made by the transition.

Manage Post-transition

In ‘manage post-transition’, the focus shifts to activities after the transition has been achieved. The steps involved are as follows:

Step 1:

It starts with measuring benefits. Reporting on benefits realized till now should be a part of the end of tranche review and other planned benefits reviews. Key performance indicators that are selected as measures and recorded in benefits profile will form the basis of comparison.

Step 2:

The next step is removing access to legacy working practices and systems. This is necessary as there is a danger that the business will revert to using old ways of working once pressure from the program is removed. This, in turn, threatens the sustainability of improvements.

Step 3:

The third step is responding to changing requirements. It involves highlighting and recognizing new ideas and problems, which have been scoped in the program, due to the new ways of working. These need to be forwarded to the Program Manager for consideration.

Step 4:

The final step is monitoring and reporting benefits realization. This deals with monitoring and tracking the progress of benefit measures defined in benefits profiles, for signs of deviation outside anticipated parameters.

In the next section, let us focus on the first step, that is, ‘measure benefits’

Measure Benefits

Benefits profiles define how each benefit will be measured. Reporting on the benefits realized should be a part of the end of tranche review or any other planned benefits review.

The actions associated with measuring benefits are as follows:

  • Normally, at the end of tranche, it needs to be analyzed whether the strategy embedded in the program can work satisfactorily.

  • It needs to be ensured that the next tranche is not started prematurely until the previous tranche is analyzed. Otherwise, there will be a significant risk.

  • As it needs time to collect and analyze sufficient benefit measures, a gap or delay can be planned between two tranches.

  • For example, a tranche review decides that it is useless to proceed with the next tranche with the current set of projects. If in the meanwhile, the next tranche has already started, this will lead to a waste of effort and expense.

  • It is wise to review historic averages and seasonal trends to forecast expected performance over the life of a program.

  • Key performance indicators are recorded in benefits profiles and form the basis of comparison.

  • It is important to understand that as performance is monitored, the consequences are understood.

  • For example, an organization may be focused on headcount reduction but if there is a sudden increase in resignation, the cause and effect need to be investigated.

In the next section, we will focus on removing access to legacy working practices and systems.

Remove Access to Legacy Working Practices and Systems

One of the difficult aspects of delivering any change is to stop the old practices that are embedded and remove access to tools and systems that support these old practices. The responsibilities of the Business Change Manager or BCM in this step are:

  • He must ensure that old working practices and systems are identified.

  • Then the impact of removing them should be analyzed and

  • Finally, they should be decommissioned as soon as business stability has been achieved.

If the old ways of working remain, there is a danger that the business will revert to using them. In the next section, we will focus on how to respond to changing requirements.

Respond to Changing Requirements

New ideas and problems are recognized when new benefits are realized and put to use. These may be unforeseen and can give rise to additional requirements. It is a natural part of program flow that the program should be able to respond to these changing requirements. The responses to changing requirements involve the following steps:

  • First, the additional requirements have to be quantified,

  • After that, forward the requirements to the Programme Manager and get his approval.

  • After getting his approval, these requirements should be included in the projects dossier through the issue register.

  • Any simultaneous impact on the blueprint, program plan, benefits realization plan, and others should be assessed and the documents need to be updated.

In the next section, we will discuss ‘monitor and report benefits realization’.

Monitor and Report Benefits Realization

The actions to be performed during ‘monitor and report benefits realization’ are as follows:

  • The benefit measures should be monitored and tracked for signs of deviation outside the anticipated parameters.

  • In case tolerance limits are breached, they should be escalated to the Senior Responsible Owner or SRO and the Sponsoring Group.

  • The benefits realization plan and benefits profiles should be updated and released according to the arrangements defined in the benefits management strategy.

  • The BCMs will provide input to benefits reviews when benefit measures are completely analyzed and conclusions are drawn.

  • Benefits reviews will also help the program to understand the extent to which stakeholders have been satisfied with the improvements.

  • While reporting on benefits, it should be ensured that the program is viable at all stages. In case a benefit does not materialize as planned, it should be escalated to the Program Manager and analyzed for its impact on other benefits.

  • It is not always possible or necessary for a program to continue until the end of benefits measurement period. If benefits realization gives a clear indication of the final realization and operational managers are ready to accept responsibilities for completing pending measures, the program can be closed.

In the next section, we will discuss the roles and responsibilities in ‘realizing the benefits’ process.

Roles and Area of Focus

Let us focus on the responsibilities of roles, namely, the SRO, Program Manager, Business Change Manager, and Program Office in ‘realizing the benefits’.

The roles and their responsibilities in ‘realizing the benefits’ are as follows:

Senior Responsible Owner

The SRO is accountable for all sub-processes in ‘manage pre-transition’, ‘manage transition’ and ‘manage post-transition’.

Programme Manager

The Program Manager is consulted for all the steps and shares the responsibility of planning transition with the Business Change Managers.

Business Change Manager

The most important role in this process is played by the BCMs and their respective change management teams. They are responsible for getting the work done after realizing the benefits.

Throughout ‘manage pre-transition’, ‘manage transition’ and ‘manage post-transition’, the BCMs are responsible for each task.

Programme Office

The Program Office supports the BCMs with the information and information baselines especially in ‘manage pre-transition’. In ‘manage transition’, they are normally notified of what is happening. Again, they help the change management team in ‘manage post-transition’.

The Program Office supports the BCMs to measure benefits, respond to changing requirements and monitor and report benefits realization.

In the next section, we will focus on an example based on the concepts discussed.

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Realizing the Benefits Problem Statement

Mr. Smith Gordon, the CEO of Nutri Worldwide Inc., has identified Kylie Honkele, the CFO, to be the Senior Responsible Owner of the program ‘Nutri Snack’. The program’s aim is to create and launch a new evening snack.

The projects that need to be undertaken are:

Project 1: Creating a new recipe

Project 2: Advertisement and marketing

Project 3: Identifying the sellers

Project 4: New production unit

The Program Manager and the Business Change Manager are discussing how they can monitor the transformational flow, ‘realizing the benefits’ and are preparing notes for the steps to be included in it.

This is essential for the overall success or failure of the program. In the next section, let us discuss the steps to be included in the ‘manage pre-transition’, ‘manage transition’ and ‘manage post-transition’.

Realizing the Benefits Solution

The steps to be taken during ‘manage pre-transition’, ‘manage transition’ and ‘manage post-transition’ are as follows:

Manage Pre-Transition

In manage pre-transition:

  • The BCM first establishes the benefits measurement. These values can be derived from the benefits profiles. Some of the benefits can be the finalization of figures of increase in sales and expected growth in the number of customers.

  • Next, the performance indicators need to be identified.

  • Teams need to be prepared for the use of the new production unit. The BCM needs to identify the training needs and also assess if the employees are ready for a change.

Manage Transition

In manage transition:

  • The production line is finally put to use.

  • The new product is in the launch phase.

  • The BCM needs to establish support arrangements in case help is needed with new production lines. The employees should also be more aware of the new product.

  • The BCM will have to review the transition frequently to ensure that it is progressing as planned.

Manage Post-Transition

In manage post-transition:

  • The focus shifts to removing the old ways of working.

  • In case more training is required for the employees, it should be provided.

  • Most importantly, it will completely be up to the BCM to monitor and report benefits realization.

Summary

Let us summarize what we have learned in this Realizing the Benefits tutorial:

  • ‘Realizing the benefits’ process is about managing the benefits from their initial identification to their successful realization.

  • The inputs of this process are the information baselines and outputs from ‘delivering the capability’.

  • The principle controls in this process are Program Board monitoring, assurance and audit reviews, dependency management and so on.

  • The key roles in this process are the SRO, the Program Board, the Program Manager, the BCM, the Program Office and the business change team.

  • The major outputs of this process are updated management baselines, transition prepared and completed and so on.

  • The steps involved in ‘manage pre-transition’ establish benefits measurement, monitor benefits realization, plan the transition, communicate the change and assess readiness for change.

  • ‘Manage transition’ helps to deliver and support the changes that occur due to business transformation.

  • The first step in managing transition is to initiate the actual transition process once the capability is delivered by projects.

  • The second step is to ‘establish support arrangements’ were, support arrangements to ensure clear and concise direction for making rapid decisions is established.

  • ‘Enact transition’ begins as soon as the start of the transition is approved.

  • ‘Review transition’ ensures that the transition is reviewed and lessons are documented.

  • ‘Manage outcome achievement’ ensures that the achieved outcome is acknowledged through the program communications plan.

  • In ‘manage post-transition’, focus shifts to activities after the transition has been achieved.

  • The steps involved in ‘manage post-transition’ are measure benefits, remove access to legacy working practices and systems, respond to changing requirements and monitor and report benefits realization.

  • The SRO is accountable for all sub-processes in ‘manage pre-transition’, ‘manage transition’ and ‘manage post-transition’.

  • The most important role in ‘realizing the benefits’ is played by the BCMs and their respective change management teams.

Conclusion

With this, we come to an end of the Realizing the Benefits tutorial. Next, we will discuss the tutorial on Closing a program.

  • Disclaimer
  • PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.

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