The success of a project is typically judged based on its ability to deliver a set of deliverables on time, within budget and with expected quality. However, is this really sufficient to consider a project successful? My colleagues at FiloProcess and I would argue that the implementation of project deliverables is in fact the starting point of something even more important, namely the realization of the project’s business value.
Don’t get me wrong. The intention is not to downplay the importance of classic project management. However, the idea that the job is done when deliverables have been handed over to the receiving organization, is challenged.
What do we mean by value? Value is closely associated with the reason for launching a new project. Stakeholders have expectations on certain improvements. Behind the decision to invest in new ways of working or a new IT solution there is a belief that the change will e.g. make operations more efficient, reduce costs or increase revenues. The expected value is typically summarized in the project’s business case.
The problem with business cases is their quality. It is often difficult to compare the business cases of two projects within the same company due to differences in calculation methods and definitions. Business cases are also often misused as a mere way of getting funding for a project, which incentivizes people to exaggerate the benefits. This behavior is reinforced by the fact that business case accountability and follow-up are surprisingly rare in organizations.
This is unfortunate for several reasons. First of all, if you as a business sponsor have invested millions in a project, wouldn’t you want to know if it was worth it? And wouldn’t you want to be able to initiate corrective actions if you find that benefit realization is slower than expected?
Project deliverables vs project value
Effective value management makes a distinction between project deliverables and project value. Deliverables typically enable value realization – they are not the same thing. To give an example: Let’s say you invest in a project to implement a new powerful IT platform. Remember, the value of the project is not the IT platform – the IT platform is the project deliverable. However, the IT implementation may generate business value if people in the organization start using the platform in the intended way, if users for example get quicker access to the right information for decision-making, and thus the efficiency of the organization is improved.
If you are serious about value, it is not enough to care about whether the IT platform is delivered on time, within budget and with expected quality. After the project is closed, you should also make sure to periodically follow-up and measure to what extent the expected efficiency improvements have been realized.
In this article, we have established the importance of value management. The question is: how do you implement it? Are there good practices out there to help you avoid the most common pitfalls? Stay tuned for article #2 in the Value Management series on How to succeed with value management.
Lovisa Viktorsson is a Senior Business Analyst at FiloProcess.