Subscriber only lesson.
Sign up to this course to view this lesson.
About this lesson
Projects have a purpose and that purpose is to provide a benefit for the organization. Benefits may be financial, but can also take on other attributes. The metrics of project success should reflect the desired organizational benefits.
Download this lesson’s related exercise files.Project Benefits and Metrics.docx
205.1 KB Project Benefits and Metrics - Solution.docx
Project Benefits and Metrics
From the stakeholder perspective, project success is normally measured by the impact on operational performance caused by the result of the project. The Project Benefits Management Plan is used to describe how the project will create the business benefit and the Project Business Case is used to establish the validity of the expected benefits.
When to use
A Project Business Case and Project Benefits Management Plan are normally used with large expensive projects. There is a good deal of work to create these documents, so they normally are only created when senior management wants to be certain that the potential benefit from the project will offset the project costs.
Project managers have a tendency to think of project success as on time, on budget, and completing all deliverables. But stakeholders, particularly senior management and sponsors, are more concerned about the impact that will be caused by the project product, service or result. Their focus is usually on operational metrics, not project metrics. The Project Benefits Management Plan and the Business Case capture these operational metrics.
Project Business Case
The PMBOK® Guide defines the Project Business Case as, "A documented economic feasibility study used to establish validity of the benefits of a selected component lacking sufficient definition and that is used as a basis for the authorization of further project management activities." The Business Case paints a picture of how the operations will be affected by the successful completion of the project. There is no set format for a business case, but it normally includes a statement of the business need and an analysis of the situation. This leads to a discussion of options with a recommendation that is usually based upon a financial analysis of the projected project costs and benefits.
This is normally prepared by the business unit or sponsor who has identified the need. And the business case is used by senior management to select the project and start the project initiation process. During initiation, the project manager will normally review and update the business case with more accurate information as it becomes available.
Project Benefits Management Plan
The PMBOK® Guide defines the Project Benefits Management Plan as, "The documented explanation defining the processes for creating, maximizing, and sustaining the benefits provided by a project." This plan is used by the project manager and project team when evaluating options and analyzing risk. The plan translates the projected project result into operational performance measurements. It is the impact on these measurements that the business leadership is watching to determine project success. Depending upon the measurement, it may take months before the business will know if the project is successful. While it iis convenient for the project team to focus on on-time, on-budget, and deliverable completion. They need to keep the operational measurements and metrics in-sight.
Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Sixth Edition, Project Management Institute, Inc., 2017 Glossary definitions, Pages 699, 700. PMBOK is a registered mark of the Project Management Institute, Inc.Login to download
Lesson notes are only available for subscribers.
PMI, PMP, CAPM and PMBOK are registered marks of the Project Management Institute, Inc.