Applying Business Value Delivery Management, Benefit Realisation and Outcome Thinking to organisation strategy, portfolio managment and project execution
The only reason projects are tracked on cost is that cost measuring has been around for ages.
When project success is evaluated on basis of time and cost and not on basis of the achievement of business benefits and the delivery of business value, it is because organisations are good at time and cost but generally don't know how it is done in a simple and structured way for benefits and business value.
But defining project success by the inputs instead of by the outputs is a huge problem and a key reason why most projects fail to deliver the expected benefits and value.
Projects will continue to fail on business value delivery unless we start looking at project success from the output perspective.
It's simple: Projects are executed to deliver business value.
Business value comes as result of achiving some business benefits, and business benefits are the building blocks of a desired business outcome.
In order to get the desired business outcomes you execute projects that consist of series of change activities that will deliver these desired business outcomes and which enable business benefits and provide you with the resulting business value.
Global studies made over the last decades by Boston Consulting Group, Totally Optimized Projects, Deloitte and others all point to that most projects fail to deliver the projected business value that got them approved for execution in the first place.
This means that the vast majority of projects fail - either due to not being on time, budget, quality and as they don't deliver the projected business value.
Over the past 25 years billions have been invested in improving the way projects are executed so we can have more confidence in their results.
According to Standish, agile methodologies generally have proven to be better at delivering on time and budget than Waterfall. But the same studies say nothing about projects succeeding in delivering actual business value.
We expect that ratio to be unchanged.
So why do projects have problems delivering the value that got them approved for execution in the first place?
Global studies made by Boston Consulting Group and subsequently by Totally Optimized Projects showed the following reasons for projects failing:
What is shown above is that the parts where projects fail are not the parts that have had the focus during the heavy investments in project management disciplines over the last decades.
It is the business case that destroys around 25% of the business value in projects, and as the production of business cases hasn't received as much attention as agile, scrum, SAFe, etc. thus it hasn't evolved and improved.
We can also see from the figure above, that post project delivery follow up counts for another heavy loss. And as for business cases, this area has also been neglected by the implementation of the modern project management methodologies in recent years.
Most of the modern methods incl. e.g. SAFe now have incorporated a value aspect and recommends that value considerations are made, but they don't say how and who. And especially the "how" is important.
Organisations have developed the ability to track and manage cost, time and quality for very long and have become quite good at it, but they have never been tasked to identify, describe and quantify business value and none of the methods provide instructions to how to approach it in practical terms. Therefore it isn't done properly.
As an example, SAFe instructs to look at the business value during PI planning sessions - and then never talks about it again. There are no guidance on how to approach it or what it is to be used for. And this is a common characteristic for the popular methods of these times.
That is one important reason why projects fail - because the success of projects is measured by the inputs and not by the outputs.
A strong business value delivery focus in projects will:
- is passionate about helping organisations get the maximum amount of business value from their business initiatives and project investments.
We specialise in Value Delivery & Benefits Management and alignment of project-, programme- and portfolio management execution with business value focussed corporate strategy definition and execution.
A key Danish government agency has decided to include the TOP Value Delivery Management methodology in their new project model.
A major Nordic financial services organisation has decided to validate the TOP Value Delivery Management methodology on an internal project as last step in the approval process for possible general implementation.
A major Nordic player in the automobile leasing market has decided to validate the TOP Value Delivery Management methodology on a project prior to deciding on making TOP an integral part of their IT project governance structure.
A major Nordic player in the automobile leasing market has decided to make TOP Value Delivery and Benefits Management an integral part of their project governance structure.
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