benefits realisation: 12 reasons why projects fail

Sponsors need RoIYou might think that with a good business case and a delivered project, the benefits realisation would be a natural flow-on.  There are many reasons why is this not the case and why benefits have to be closely managed.

Twelve of these are listed below.

  1. The major project management methodologies were written to avoid delivery failure – benefits are not their central concern.
  2. Third party suppliers (contractors, software vendors, consultants) are more concerned with their own business case and therefore deliver what is required of them and move on. The customer’s benefit realisation is not their focus.  The high use of contractors can mean there is little vested interest in benefits realisation.
  3. Project managers do not see benefits as their responsibility. The growth in other specialisations such as business analysis and change management means that the project delivery personnel are further removed from the business consequences of their actions. Review benefits realisation on track
  4. The common misconception that if you build the projects, the benefits will come.  Benefits management is therefore seen as an unnecessary overhead.
  5. CEOs do not demand to see the actual and cumulative ROI on the capital investments and reporting to shareholders is not done in this way.
  6. Once projects are approved, no further justification is sought – therefore not only are the claimed benefits  not leveraged or managed but additional potential benefits are ignored.  This effect is exacerbated where claimed benefits are ‘booked’ in future budget allocations – business managers will not admit to the possibility of greater financial benefits than they need to.
  7. Corporate planning, budgeting and portfolio planning are usually not integrated, so particular projects are not regarded as essential to delivering strategy.
  8. Project costs are rarely aligned to specific benefits so the best value for money is not achieved.  This would occur if high cost/low value outcomes were eliminated.
  9. Risk management processes are normally directed at delivery rather than benefit impact.
  10. The primary project management measure of success is “on time and on budget”
  11. Measurement activities are seen as an overhead.  When baseline measures are not taken or confirmed,  improvements cannot be measured.
  12. There is often a long time lag between initiative planning and benefits realisation which can make attribution difficult.

Benefits realisation improves performance

See also Boosting Business Benefits

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