Office Read 4 – Program
Benefit Alignment
Objective of the office Read – This
artifact is a short summary of respective content that will be covered in
class. The summary is a great tool to review content however by no means
replaces the SPM V4. Standard for Program Management remains the authoritative
source of preparation for the PMP Exam
Goal of this domain: IMP - This performance domain defines, creates,
maximizes, and delivers the benefits provided by the program.
Weightage on the
PgMP Exam: 11% (18 or 19 Questions)
Disclaimer – This artifact is a short
summary of respective content that will be covered in class. The summary is a
great tool to review content however by no means replaces the SPM V4. Standard
for Program Management remains the authoritative source of preparation for the
PMP Exam
4.0 PROGRAM BENEFITS MANAGEMENT (Overview of the performance domain)
Let’s
understand first what does BENEFIT really mean:
·
A benefit is the gains and assets realized by
the organization and other stakeholders as the result of outcomes delivered by
the program.
·
Benefits can be quantifiable and qualitative in
nature.
·
Quantifiable benefits: Some benefits are
relatively certain, easily quantifiable, and may include concrete or finite
conditions, such as the achievement of an organization’s financial objectives
(e.g., a 20 % increase in revenue or gross margin) or the creation of a
physical product or service for consumption or utility.
·
Qualitative or less easily quantifiable: may
produce somewhat uncertain outcomes. Examples of less certain program outcomes
may include an improvement in employee morale or customer satisfaction or may
include a benefit such as the reduced incidence of a health condition or
disease.
Program
Benefits Management is the performance domain that defines, creates, maximizes,
and delivers the benefits provided by the program.
This section includes:
4.1 Benefits Identification
4.2 Benefits Analysis and
Planning
4.3 Benefits Delivery
4.4 Benefits Transition
4.5 Benefits Sustainment
Exam Question on the following scenario:
If
Stakeholders are not convinced about the Program, focus on on the outcomes and
benefits to be provided by the various activities conducted during the
program’s duration.
This is a Critical domain for Program Manager to employ to:
·
Identify and assess the value and impact of
program benefits,
·
Monitor the interdependencies among the outputs
being delivered by the various components within the program and how
those outputs contribute overall to the program’s benefits,
·
Analyze the potential impact of planned program
changes on the expected benefits and outcomes
·
Align the expected benefits with the
organization’s goals and objectives, and
·
Assign responsibility and accountability for the
realization of benefits provided by the program and ensure that the
benefits can be sustained.
4.1 BENEFITS
IDENTIFICATION (primary purpose to Identify and Qualify Benefits).Expect 3-5
Question from Benefit Identification.
·
The purpose of the benefits identification phase
identify and qualify the benefits
that program stakeholders expect to realize in a BENEFIT REGISTER. – Exam Question on a scenario on this concept
·
Business Case lists high level benefits followed
by the Program Charter. These two documents must be thoroughly reviewed to
Identifying benefits and modify benefits.
·
The program’s business case connects with the
organizational strategy and objectives and helps identify the level of
investment and support required to achieve the program benefits.
·
Benefits Register is Created as a
part of this process.
4.1.1 BENEFITS REGISTER
·
The benefits register collects and lists the
planned benefits for the program and is used to measure and communicate the
delivery of benefits throughout the duration of the program.
·
Inputs to Benefit Register Program Business Case,
the organization’s strategic plan, and other relevant program objectives.
·
The register is then reviewed with key
stakeholders to develop the appropriate performance measures for each of the
benefits.
·
Key performance indicators are identified in
this phase (associated quantitative and qualitative measures are defined and
elaborated in the next phase, where the program benefits register is updated).
·
The benefits register may take many forms, but
typically includes (at a minimum):
o
List of planned benefits;
o
Mapping of the planned benefits to the program
components, as reflected in the program roadmap;
o
Description of how each benefit will be
measured;
o
Key performance indicators and thresholds for
evaluating their achievement;
o
Risk assessment and probability for achieving
the benefit;
·
Status or progress indicator for each benefit; Target
dates and milestones for benefits achievement;
·
Person, group, or organization responsible for
delivering each benefit;
·
Establishment of processes for measuring
progress against the benefits plan; and
·
Tracking and communications processes necessary
to record program progress and report to stakeholders.
4.2
BENEFITS ANALYSIS AND PLANNING
Primary
Purpose:
·
to establish the program benefits management
plan
·
Decompose the benefits listed in the benefit
register to develop the benefits metrics and framework for monitoring and
controlling both the components and the measurement of benefits within the
program.
Activities
that make up benefits analysis and planning include:
·
Establishing the benefits management plan that
will guide the work through the remainder of the program
·
Defining and prioritizing program components and
their interdependencies,
·
Defining the key performance indicators and
associated quantitative measures required to effectively monitor the delivery
of program benefits,
·
Establishing the performance baseline for the
program and communicating program performance metrics to the key
stakeholders, and
·
Updating positive and negative risks to benefits
as more information becomes known.
Why Quantify incremental delivery of benefits?
Answer: To
ensure that full realization of planned benefits can be measured during the
performance of the program.
What helps the program manager and stakeholders
determine whether benefits exceed their control thresholds?
Answer-
Establish quantifiable meaningful measure
Question on the exam on this concept: Program
costs may continue after program closeout as operational costs to sustain the
benefits included in the program funding; program costs may also end at program
closeout.
Question on the exam on this concept: Program
usually have a negative cost flow in the beginning due to the fact that
investment or cost incurred continues in
the beginning before benefits can be realized.
The
program’s benefits and risks to the program benefits should be further refined
and new benefit risks quantified.
Question: Who helps the program team
determine if benefits achievement is occurring within the stated parameters so
changes to the components or the program as a whole may be proposed when
necessary?
Answer:
The Program Governance Function
Question: How does Program Governance helps evaluate
if the benefits are being delivered with the stated parameters?
Answer: By
conducting following analysis:
·
By linking benefits to program objectives
financial expenditures (operational and capital), measurement criteria
(including key performance indicators), and measurement and review points.
·
The benefits management plan is also used during
the benefits delivery phase to verify that benefits are being realized as
planned, while providing feedback to program stakeholders and the program
steering committee to facilitate successful benefit delivery.
4.2.1 BENEFITS MANAGEMENT PLAN
·
The benefits management plan is the documented
explanation defining the processes for creating, maximizing, and sustaining the
benefits provided by a project or program.
·
The benefits management plan formally documents
the activities necessary for achieving the program’s planned benefits.
·
It identifies how and when benefits are expected
to be delivered to the organization and specifies mechanisms that should be in
place to ensure that the benefits are fully realized over time.
·
The benefits management plan is the baseline
document that guides the delivery of benefits during the program’s performance.
·
The benefits management plan also identifies the
associated activities, processes, and systems needed for the change driven by
the realization of benefits; the required changes to existing processes and
systems; and how and when the transition to an operational state will occur.
The benefits management plan should:
·
Define each benefit and associated assumptions
and determine how each benefit will be achieved;
·
Link components outputs to the planned program
outcomes;
·
Define the metrics (including key performance
indicators) and procedures to measure benefits;
·
Define roles and responsibilities required to
manage the benefits;
·
Transition of Benefits: Define how the resulting
benefits and capabilities will be transitioned into an operational state to
achieve benefits;
·
Sustainment of Benefits: Define how the
resulting capabilities will be transitioned to the individuals, groups, or
organizations responsible
for sustaining the benefits; and
·
Provide a process for managing the overall
benefits management effort.
4.2.2 BENEFITS MANAGEMENT AND THE PROGRAM ROADMAP
Important
concepts for the exam:
Benefits
Management – How components will deliver benefits in the form of capabilities
and outcomes by establishing program architecture (How the components will
deliver benefits)
Roadmap – describes[H1] the structure of components, timing and their
independencies (What are the components)
4.2.3 BENEFITS REGISTER UPDATE
·
The benefits register, initiated during benefits
identification, is updated during benefits analysis and planning.
·
At this time, program benefits are mapped to the
program components based on the program roadmap.
·
The benefits register is then reviewed with the
appropriate stakeholders to define and approve key performance indicators and
other measures that will be used to monitor program performance.
Important
Concepts for the exam:
1. Benefit Identification
leads to identification Qualification and establishing key performance indicators.
2.
Benefit
Analysis and Planning – Approval of key performance
indicators and quantification.
4.3
BENEFITS DELIVERY
The
purpose of the benefits delivery phase is to ensure that the program delivers
the expected benefits, as defined in the benefits management plan. Activities
that make up benefits delivery include:
·
Monitoring the organizational environment
(including internal and external factors), program objectives, and benefits
realization to ensure that the program remains aligned with the organization’s
strategic objectives;
·
Initiating, performing, transitioning, and
closing components, and managing the interdependencies among them;
·
Evaluating opportunities and threats affecting
benefits, including updating the benefits register for new opportunities
and risks affecting benefits, and updating realized or obsolete risks affecting
benefits;
·
Evaluating key performance indicators related to
program financials, compliance, quality, safety, and stakeholder satisfaction
in order to monitor the delivery of benefits; and
·
Recording program progress in the benefits
register and reporting to key stakeholders as directed in the program communications
management plan.
Benefits
delivery phase ensures that there is a defined set of reports or metrics
reported to the program management office, program steering committee, program
sponsors, and other program stakeholders.
How do stakeholders assess the overall health of
the program?
Answer- By using the reporting on benefits metrics,
stakeholders can assess the overall health of the program and take appropriate
action to ensure successful benefits delivery.
Benefits Management
is an iterative process. Benefits Analysis and Planning and Benefits Delivery,
in particular, have a cyclical relationship.
Benefits
analysis and planning may be continuously revisited as conditions change.
Corrective action may need to be taken in response to information gained from
monitoring the organizational environment.
4.3.1
BENEFITS AND PROGRAM COMPONENTS
·
Each component should be initiated at the
appropriate time in the program and integrated to incorporate its output to the
program as a whole.
·
The initiation and closure of these components
are significant milestones in the program roadmap and schedule.
Exam Question on the concept - If benefit management plan is update, Roadmap
also should be updated or vice versa.
4.3.2
BENEFITS AND PROGRAM GOVERNANCE
·
For a benefit to have value, it needs to be
realized to a sufficient degree and in a timely manner.
·
Governance Board Function – Evaluate the actual
benefits delivered by the program components or program against the expected
benefits, as defined in the benefits management plan.
Question – What may happen if there
are any changes to environmental factor or strategic direction?
Answer:A
key aspect to consider is whether program components, and even the program as a
whole, are still viable.
Exam Question on this concept - When
the benefits management plan is modified, the program roadmap should be updated
as well.
The
Program Governance Performance Domain integrates with the Benefits Management
Performance Domain to help ensure that the program is continuously aligned with
the organizational strategy and that the intended value can still be achieved
by the delivery of program benefits.
Question: What is primary purpose of
effective governance?
Answer: Effective
governance helps ensure that the promised outcomes are achieved and delivered
for the organization to realize intended benefits.
During
Benefit Delivery 2 of the following aspects should be evaluated:
1. Strategic alignment. Focuses on
ensuring the linkage of enterprise and program plans; on defining, maintaining, and
validating the program value proposition; and on aligning program management
with enterprise operations management. For internally focused programs, the
benefits realization processes measure how the new benefits affect the flow of
operations of the organization as the change is introduced and how negative
impacts and the potential disruptiveness of introducing the change may be
minimized.
2. Value delivery. Focuses on ensuring that the program delivers
the intended benefits. There may be a window of opportunity for the realization of a
particular planned benefit and for that benefit to generate real value. The
program manager, program steering committee, and key stakeholders may determine
if the window of opportunity was met or compromised by actual events in the
program or components (for example, a delay, cost overrun, or scope reduction).
4.4. BENEFITS
TRANSITION
1.
The purpose of the benefits transition phase is
to ensure that program benefits are transitioned to operational areas and can
be sustained once they are transferred.
2.
Value is delivered when the organization,
community, or other program beneficiaries are able to utilize these benefits.
Activities that make up benefits transition
include:
·
Verifying that the integration, transition, and
closure of the program and its components meet or exceed the benefit
realization criteria established to achieve the program’s strategic objectives;
and
·
Developing a transition plan to facilitate the
ongoing realization of benefits when turned over to the impacted operational
areas.
Question: What are the 3 critical
aspects of Benefit Transition?
Answer:
·
Benefits transition ensures that the scope of
the transition is defined
·
the stakeholders in the receiving organizations
or functions are identified and participate in the planning, the program
benefits are measured and sustainment plans are developed
·
the transition is executed.
Important: Benefits transition planning
activities within the program are only one part of the complete transition
process. The receiving organization or function is responsible for all
preparation processes and activities within their domain to ensure that the
product, service, or capability is received and incorporated into their domain.
There may be multiple transition events as individual program components close
or as other work activity within the program closes.
Benefits
may be realized before the formal work of the program has ended and will likely
continue long after the formal work has been completed. Benefits transition may
be performed following the close of an individual program component if that
component is intended to provide incremental benefits to the organization.
Benefits transition may also occur following the close of the overall program
when the program as a whole is intended to provide benefits to the organization
and no incremental benefits have been identified.
Benefits
transition activities may include but are not limited to:
·
Evaluation of program and program component
performance against applicable acceptance criteria, including key
performance indicators;
·
Review and evaluation of acceptance criteria
applicable to delivered components or outputs;
·
Review of operational and program process
documentation;
·
Review of training and maintenance materials (if
they apply);
·
Review of applicable contractual agreements;
·
Assessment to determine if resulting changes
have been successfully integrated;
·
Activities related to improving acceptance of
resulting changes (workshops, meetings, training, etc.);
·
Transfer of risk(s) affecting the benefits
transitioned to the receiving organization;
·
Readiness assessment and approval by the
receiving person, group, or organization;
·
Disposition of all related resources.
Question: When Can a program a program
may also be terminated with no transition to operation?
Answer: This
may occur when the charter is fulfilled and operations are not necessary to
continue realization of ongoing benefits, or the chartered program is no longer
of value to the organization.
Question: Lack of stakeholder buy-in
into the benefits or reluctance towards receiving benefits?
Answer: The
receiving entity may not have a clear understanding of the capabilities or
results to be transitioned and what is required for the entity to successfully
sustain the benefits. All pertinent documents, training and materials,
supporting systems, facilities, and personnel are typically provided during the
transition and may include transition meetings and conferences.
4.5 SUSTAINMENT
·
The purpose of the benefits sustainment phase is
the ongoing maintenance activities performed beyond the end of the program by
receiving organizations to ensure continued generation of the improvements and
outcomes delivered by the program.
·
As the program is closed, responsibility for
sustaining the benefits provided by the program may pass to another
organization or another program.
·
Benefits may be sustained through operations,
maintenance, new components, or other efforts.
·
A benefits sustainment plan should be developed
prior to program closure to identify the risks, processes, measures, metrics,
and tools necessary to ensure the continued realization of the benefits
delivered.
Question: Who plans for Ongoing sustainment of
program benefits and when?
Answer:
·
The program manager and the component project
managers.
·
During the performance of the program.
When does the actual work that ensures the
sustainment of benefits conducted?
Answer: Typically
conducted after the close of the program and is beyond the scope of the
individual components.
Key Concept: The responsibility for benefits
sustainment falls outside the traditional project life cycle; however, this
responsibility may remain within the program life cycle. While these ongoing
product, service, or capability support activities may fall within the scope of
the program, they typically are operational in nature and typically are not run
as a program or project.
Activities that make up benefits sustainment include but are not limited
to:
·
Planning for the operational, financial, and
behavioral changes necessary for program recipients (individuals, groups,
organizations, industries, and sectors) to continue monitoring performance;
·
Implementing the required change efforts to
ensure that the capabilities provided during the course of the program
continue when the program is closed and the program’s resources are returned to
the organization;
·
Monitoring the performance of the product,
service, capability, or results from a reliability and availability-for-use perspective
and comparing actual performance to planned performance, including key
performance indicators;
·
Monitoring the continued suitability of the
deployed product, service, capability, or results to provide the benefits expected
by the customers owning and operating it.
·
Providing on-demand support for the product,
service, capability, or results either in features, improved technical information,
or real-time help desk support;
·
Important
Concept: Planning for and establishing operational support of the product,
service, capability, or results separate from the program management function without
relinquishing the other product support functions;
·
Updating technical information concerning the
product, service, capability, or improvement in response to frequent
product support queries;
·
Planning the transition of product or capability
support from program management to an operations function within an
organization;
·
When Planning the retirement and phase-out of
the product or capability, or the cessation of support – Advice and provide appropriate guidance
to the current customers;
·
Most
Important Concept for the exam: Developing business cases and the potential
initiation of new projects or programs to respond to operational issues
with the deployed product, service, or capability being supported or public
acceptance/reaction to the improvement or to legislative changes; political,
economic, and socioeconomic changes; cultural shifts; or logistics issues with
a deployed product, service, capability, or results being supported; and
·
Monitoring any outstanding risks affecting the
program’s benefits.
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