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PgMP office Read 4 – Program Benefit Management

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 responsiblefor 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 Identificationleads 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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