Today, most organizations lack a measurable way to strategically align projects to their corporate objectives. Business cases are scarcely used. When they are, they often include only an idea or a proposal but no justification that can be described, measured and tracked. Initiatives are typically justified by executive demand. I.e. an executive or business leader demands a business process be enhanced to reduce waste, increase effectiveness or comply with regulatory or market pressures. Before starting the project, rarely is there a defined framework in place where the intended business outcome and benefits are evaluated for alignment to the overall corporate objectives. Neither is there a process that monitors the attainment of benefits during the course of the project to substantiate the project’s continuation and completion.
Traditionally, organizations have used key indicators such as scope containment, budget management, and scheduling to measure the progress or lack of progress performed on a project. However, these indicators do not inform or involve the monitoring of benefits attained or business outcome to be achieved. Today’s leaders can transform their organizations by recognizing the need for tracking benefits in order to achieve business outcomes.
According to a 2015 Corporate Executive Board (CEB) study on project value and benefit realization, the need for tracking benefits is illustrated as a vitally important factor in realizing the true value that projects bring. The study stated that an analysis of the PMO Executive Council project database revealed a disturbing reality: even among those projects that are delivered at least 90% on time and on budget, the majority fail to deliver business outcomes. In addition, the top-performing projects in terms of budget and schedule compliance attain on average only 53% of their expected business outcome. This illuminates two shortcomings that most organizations have: 1. Lack of a best practice framework to determine the strategic alignment of corporate objectives to project benefits and 2. Lack of best practice processes to measure and track the expected benefits for the project.
Business Outcome Management (BOM) is a measurement-driven framework for tracking project benefits as a critical component for the success of every organization. In the BOM framework, there are four core principles: 1. Defining clear strategic alignment, 2. Prioritizing projects, 3. Quantifying benefits, and 4. Tracking benefits. Utilizing these 4 core principles can address shortcomings by enabling the organization to establish clear linkage between corporate objectives and projected project benefits, selecting clearly aligned projects to be executed at the right time based on risk, complexity & benefit, measuring benefit value to justify the start and continuation of projects, and managing performance visibility for executive oversight and corrective actions.
The application of all four core principles in addition to tools developed by iSeek Solutions such as the Decision Matrix (iDMX©), can be effectively used to establish a framework focused on tracking the expected benefits for an organizations portfolio and achieving its strategic business goals and objectives.
To learn more about how iSeek Solutions can help you track your organizations’ benefits to help achieve business outcomes, contact us today; subscribe to our blog and stay tuned for future insights.