My mentors taught me that success meant delivering my initiative on time, on scope, and on budget when I first started managing projects. But that wasn’t true, and it still isn’t. There isn’t an executive anywhere who approves a project with those goals in mind. Decision-makers approve and fund projects to deliver benefit to the business. That benefit can be many things – revenue, cost or risk reduction, compliance, employee or customer satisfaction, and so on. But for a project to succeed it has to deliver those benefits. Because, it’s not just about the money.
The Importance of Defining Benefits and Measures
There is greater recognition of that need today than there was when I first started managing projects. But, it’s still not where it needs to be, at least in my opinion. Ask many project managers what the business benefits are that their initiative needs to deliver. They will undoubtedly refer you to the sponsor or customer representative for the answer. If the project manager doesn’t understand the business value their work aims to deliver, how can they be sure they are making the right decisions?
Understanding Constraints vs. Value
Ask those same project managers about the constraints of time, cost, and scope and they’ll tell you want to hear. Organizations need to put value and benefits in that same conversation. That requires every project, and by extension every project manager and team, to have:
- Clearly defined benefits. The project is expected to deliver a specific amount and type of value. That could be $1 million in revenue, 2% market share increase, three-point improvement in customer satisfaction, or any other of a thousand different metrics.
- Clearly defined measures for those benefits. Determine how to measure the performance in the bullet point above. That could be the next customer survey, the revenue report one quarter after launch, or the amount allocated to a particular general ledger code in the next fiscal year. Again, there are many different measures.
Define both of these up front, alongside making the proposal and considering the investment. That’s where we find the estimates of cost and duration, as well as where we state the features to include. It follows that the reason for the investment – the value, should be there too. People often don’t define them because they consider financial metrics too obvious and other metrics too difficult.
How PPM Solutions Add Value
That’s where a project portfolio management or PPM solution comes in. Sciforma, a world-class PPM offering, enables clients to define and track success criteria and metrics to measure that success. For mainstream metrics like revenue, unit sales, and so on, integrations with other parts of the enterprise technology infrastructure can automate the measurement of performance. But what about those goals and objectives that aren’t so clear cut?
Unit sales, market share, revenue, and similar metrics are trailing indicators – you only get reliable indicators after the fact. That may delay the ability to correct or enhance a project’s deliverables, hurting the ultimate success. That’s where proxies come in – expressions of interest in a new product on the company website for example, or pre-orders by a certain date. Organizations often overlook these metrics, even though they are just as valid as profitability or margin.
With the right PPM solution, it doesn’t matter. Teams can define custom metrics and measures, tie them to the project, monitor performance, and provide actual data. This allows portfolio managers to identify variances in any metric and engage the right stakeholders to review and determine the appropriate response. Again, PPM can assist with modeling of different scenarios, identification of dependencies for any changes and so on.
Remember, it’s not just about the money!
And we’re back to where we started, reminding our self it’s not just about the money. As a final point, it should be noted that value or business benefits can be anything that the organization defines. While objectivity is always the desire, it’s not always possible, especially in projects focused on innovation or research and development. There, subjective metrics are fine – the project is a success if the CEO says that it’s a success for example. But regardless of what the metric is, it, and the measurement approach, must be defined upfront, captured, tracked, and managed in your PPM solution.
