The identification, definition, and monitoring of benefits for a project is a key part of the project management process and often requires the establishment of an agreement on ownership for ongoing benefit realization. An agreement on this aids in clearly outlining who is responsible for the realization of the project benefits, ensuring increased accountability, and improved project outcomes.
Principally, this agreement on ownership aims to:
- Identify who is responsible for achieving the intended benefits.
- Define the methods for measuring and tracking benefits.
- Assign accountability for the project’s success.
Benefits Management and Realization
The ‘Project Management Institute’ defines benefits as the measurable improvement resulting from a project that is perceived as advantageous by one or more stakeholders. These benefits can be financial or non-financial.
Benefits Realization Management (BRM) is the commonly employed methodology to manage these benefits. The BRM process begins during the project initiation phase and lasts until the project closure phase and includes managing expected benefits throughout a project’s life cycle.
Document Agreement on Ownership
The agreement on ownership essentially declares who will be the ‘Benefits Owner’- the person or group who will be responsible for the realization and maximization of the project benefits. It is essentially a commitment that the benefits defined in a project will be delivered and sustained over its lifecycle.
This person is typically a senior executive or project sponsor who plays a key role in setting strategic direction and making decisions about resource allocation, priorities, and performance measures.
Importance of Ownership Agreement
Defining benefits ownership helps in a number of ways:
- Improved Accountability: With a defined Benefits Owner, there is increased responsibility ensuring benefits realization aligns with the project’s objectives.
- Clear Roadmap: It allows for a detailed plan of the required actions to achieve the benefits specified.
- Continuous Monitoring: It provides a control mechanism which enables continuous monitoring, measuring, and reporting of benefit realization.
Example
For instance, in a project to implement a new software system in a financial institution, the benefits might include increased operational efficiency, improved customer service, and decreased costs. The Benefits Owner – likely to be a senior executive or project sponsor – would be responsible for ensuring these benefits are realized through actions such as staff training, system testing, and monitoring system performance after deployment.
Overall, establishing an agreement on ownership for ongoing benefit realization is a critical step in successful project management. It ensures project outcomes are not only defined but also managed, measured, and achieved, significantly improving the likelihood of project success.
Through the application of Benefits Realization Management techniques, project managers can drive greater value from their projects and ensure these benefits continue to be realized long after the project’s official end.
Practice Test
True or False: Document agreement on ownership structure is significant in ongoing benefit realization.
- True
- False
Answer: True
Explanation: Documented agreement on ownership is vital in ongoing benefit realization as it helps in defining the responsibilities and rights of every stakeholder involved in the project.
Document agreement on ownership for ongoing benefit realization mainly delineates:
- (a) Financial performance of the project
- (b) The rights and responsibilities of each stakeholder involved in the project
- (c) The color scheme of the project documents
- (d) The official logo of the project
Answer: (b) The rights and responsibilities of each stakeholder involved in the project
Explanation: Document agreement on ownership primarily outlines the rights, responsibilities and role of every stakeholder in context of the project.
True or False: Document agreement on ownership includes a detailed list of all project costs.
- True
- False
Answer: False
Explanation: Although a document agreement on ownership may mention financial parameters, it primarily focuses on defining stakeholder duties, obligations and rights.
Document agreement on ownership for ongoing benefit realization is typically signed by:
- (a) Only the project manager
- (b) Everyone except the project team
- (c) The project manager, major stakeholders and the client
- (d) Only the client
Answer: (c) The project manager, major stakeholders and the client
Explanation: The agreement is typically endorsed by all key parties— the project manager, major stakeholders and the client, to ensure its validity and acceptance.
Multiple select question: Who among the below should agree on the document agreement on ownership for ongoing benefit realization?
- (a) The client
- (b) The project team
- (c) The vendor
- (d) The project manager
- (e) All of the above
Answer: (e) All of the above
Explanation: Ideally, all primary stakeholders, including the client, project team, vendor and the project manager should mutually agree on the document agreement of ownership.
True or False: Tangible benefits are identified through the document agreement on ownership.
- True
- False
Answer: False
Explanation: The Document Agreement on Ownership identifies the roles and responsibilities of each stakeholder but does not identify tangible benefits.
True or False: The document agreement on ownership helps plan a project’s ongoing benefit realization.
- True
- False
Answer: True
Explanation: A clear agreement on ownership structure aids in planning the project’s ongoing benefit realization by establishing stakeholder responsibilities.
True or False: Risk assessment is a part of a document agreement on ownership.
- True
- False
Answer: False
Explanation: Risk assessment is an essential aspect of project management but is not typically a part of the document agreement on ownership.
Document agreement on ownership is expected to be:
- (a) Static
- (b) Dynamic
- (c) Irrelevant
- (d) Belated
Answer: (b) Dynamic
Explanation: Document agreement on ownership should be dynamic as it may need to be revised and updated as the project progresses.
True or False: A change in project ownership needs to be documented and agreed upon by relevant stakeholders.
- True
- False
Answer: True
Explanation: Any change in project ownership must be documented and agreed upon to ensure the clarity of roles and responsibilities moving forward.
Effective Document agreement on ownership for ongoing benefit realization typically facilitates:
- (a) A rise in project budget
- (b) Increased project duration
- (c) Lower market value
- (d) Improved stakeholder communication
Answer: (d) Improved stakeholder communication
Explanation: This agreement facilitates better stakeholder communication by clarifying the roles and responsibilities of each party.
Interview Questions
What is the meaning of ongoing benefit realization in a project context?
Ongoing benefit realization relates to the continual capturing and measurement of the benefits brought by a project, even after its completion. It ensures the project delivers value and meets its objectives in the long run.
What is a document agreement on ownership?
A document agreement on ownership is a written consent or contract that clearly outlines the rights and responsibilities of each party regarding a particular asset or project outcome.
How does benefit realization management relate to project management?
Benefit realization management is an integral part of project management, which ensures that the benefits of a project are realized and continue to be realized throughout the lifecycle of a project and even after its completion.
When creating a document agreement for ownership, what are some of the key elements you should include?
Key elements include a clear description of the asset or output, details on the assigned ownership, roles and responsibilities of each party, procedures for dispute resolution, and procedures for potential changes or termination of the agreement.
How does the PMBOK® Guide, 6th Edition define benefit realization?
According to PMBOK® Guide, 6th Edition, benefit realization is the identification, execution, and measurement of the value created by projects or programs. It emphasizes that benefits should be realized not only during the project’s lifecycle but continue post completion.
Who is typically responsible for ongoing benefits realization within a project?
Typically, the project sponsor or steering committee is responsible for ongoing benefits realization. They ensure that the benefits continue to be realized after the project delivery teams have moved onto other projects.
Why is it important to document agreement on ownership for ongoing benefit realization in project management?
It is important to establish clear ownership so that there will be an assigned party responsible for sustaining the project’s realized benefits over time. This ensures the ongoing value and sustainability of the project’s outcomes.
Name one tool or technique that can be used to monitor ongoing benefit realization?
One common tool is a Benefits Realization Plan which outlines the benefits, how they will be measured, and who will be responsible for their realization.
How is the effectiveness of ongoing benefit realization measured?
The effectiveness of ongoing benefit realization is usually measured using key performance indicators (KPIs) that align with the objectives set out at the beginning of the project.
What are the risks in not having a documented agreement on ownership for ongoing benefit realization?
Without documented agreement, there may be confusion about responsibilities, potential disputes could arise, and it would be hard to ensure the sustainability of the project’s benefits.
What is the role of the project manager in ongoing benefit realization?
The project manager works to deliver the project outputs in line with the project plan. They also liaise with the project sponsor or steering committee who typically oversee benefits realization.
How can project benefits continue to be realized after project closure?
Project benefits continue to be realized after project closure through the transition of project outputs into operations where they can continue to generate the desired outcomes or benefits.
What is the importance of communication in ensuring ongoing benefit realization?
Effective communication ensures that all stakeholders understand the benefits, how they will be realized, and who is responsible. This results in greater commitment, alignment, and collaboration, supporting successful ongoing benefit realization.
What could potentially lead to failed benefit realization?
Failed benefit realization can result from poor project management, failure to align the project with strategic goals, poor stakeholder engagement, unclear benefits realization plan, and lack of ownership and accountability for benefit realization.
What are benefits tracesbility matrix in context to benefits realization?
Benefits traceability matrix is a tool used in benefits management to link the benefits of a project or program back to specific work packages or activities, ensuring that work is aligned with benefits realization.
extutorials.com