Benefits Realisation Management and its influence

Abstract
Business strategies, which imply organisational change, usually require the development of projects, e.g. IT projects. However, organisations fail in
implementing their strategies even though they employ project, programme and portfolio management techniques. Benefits Realisation Management
(BRM) is a set of processes structured to close the gap between strategy planning and execution by ensuring the implementation of the most valuable
initiatives.However, there is no empirical evidence of its effectiveness. This paper presents the results of a survey to practitioners in Brazil, United Kingdom
and United States evaluating the impact of BRM practices on project success rate. Our results show BRM practices being positive predictors to project
success on the creation of strategic value for the business. Therefore, these results suggest that BRM practices can be effective to support the successful
execution of business strategies.
© 2014 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-SA license
(http://creativecommons.org/licenses/by-nc-sa/4.0/).
Keywords: Project management; Benefits realisation; Strategy implementation; Strategy execution; Project success; Project governance

1. Introduction
   Industry reports, e.g. The Economist (2009), German Project
   Management Association (2010) and Price Waterhouse Coopers
   (2007), suggest that practitioners recognise projects as a structured
   way to implement business changes, an opinion also shared by
   academics e.g. Buttrick (1997), Kerzner (2009) and Turner (2009).
   Project success is a vital component of business success (Price
   Waterhouse Coopers, 2007) and the global economy. Although
   projects in an organisational portfolio can address different
   objectives (Gray and Larson, 2006; Jenner, 2010; Kendall and
   Rollins, 2003; Levine, 2005), they are mainly undertaken to
   support the execution of business strategies (Buttrick, 1997).
   Therefore, organisations need to ensure the success of their
   projects in order to succeed in executing their strategy and in
   turning their vision into reality.
   In order to be successful, project management teams need
   to define clearly how to evaluate whether each project is
   successful. However, there is no consensus on the definition
   of project success (Prabhakar, 2008; Yu et al., 2005). A recent
   analysis of articles published from 1986 to 2004 in the
   International Journal of Project Management and the Project
   Management Journal has found 30 articles discussing project
   success, but with no consensual definition (Ika, 2009). In
   parallel, surveys performed in the last twenty years have
   found between 60% and 80% of all organisations failing in
   executing their strategies by not delivering the expected
   outcomes of their changing process (Kaplan and Norton,
   2008).
   This paper, analyses success by two different approaches:
   Project management performance, also called efficiency,
   which evaluates success mostly based on budget, schedule
   ⁎ Corresponding author. Tel.: +44 7428 225343 (mobile).
   E-mail addresses: carlos.serra@hotmail.co.uk (C.E.M. Serra),
   martin.kunc@wbs.ac.uk (M. Kunc).
   www.elsevier.com/locate/ijproman
   http://dx.doi.org/10.1016/j.ijproman.2014.03.011
   0263-7863/00/© 2014 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-SA license
   (http://creativecommons.org/licenses/by-nc-sa/4.0/).
   Available online at www.sciencedirect.com
   ScienceDirect
   International Journal of Project Management 33 (2015) 53–66
   and requirements goals; and project success, which evaluates how
   well projects deliver the benefits required by business strategies in
   order to meet wider business objectives and to create value
   (Cooke-Davies, 2002; Serrador, 2013). Despite the clear role
   projects have in implementing business strategies, organisations
   are still evaluating projects only by their efficiency and not by the
   benefits delivered and a large group of organisations claims that
   project benefits are very hard to measure (Zwikael and Smyrk,
   2012), especially benefits realised during product operation, often
   long after project end (Yu et al., 2005).
   Recently, some scholars (Bradley, 2010; Jenner, 2010; Melton
   et al., 2008) have suggested that Benefits RealisationManagement
   (BRM) makes the value and the strategic relevance of each project
   clear, enabling an increased effectiveness of project governance.
   More than just governance, ‘strategic governance’ leads organisations
   to work towards the delivery of planned benefits
   (Gardiner, 2005). Organisations with mature processes of benefit
   realisation – and therefore stronger governance – have their
   management boards prioritising and supporting mostly those
   projects which can deliver the most relevant benefits. By
   increasing the effectiveness of project governance, Benefits
   Realisation Management can arguably reduce project failure rates
   from a strategic perspective. However, these practices are not
   widely employed yet, or employed as a subset of other project
   management processes, and there is scant evidence about its
   impact on project success (Cooke-Davies, 2002). Thus, this paper
   intends to evaluate the use of Benefits Realisation Management
   among the project management communities of three countries:
   United Kingdom, United States and Brazil in order to understand
   its impact on project success rates and evaluate the impact of
   projects on the creation of organisational value (Bryde, 2005; Yu
   et al., 2005; Zwikael and Smyrk, 2012).
2. Theoretical background
   After organisations set their visions and create their strategy, the
   management team creates individual projects or programmes,
   which are groups of projects managed together (Thiry, 2002), to
   deliver the business strategy. However, organisations do not have
   infinite resources to invest (Amason, 2011) so they choose those
   projects that deliver the most valuable results for the implementation
   of the business strategy (Amason, 2011; Gray and Larson,
   2006) in the most effective and efficient way (Gray and Larson,
   2006). Then, organizations use project portfolio management
   methods, such as financial and non-financial appraisal and
   evaluation models, to select and prioritise the best set of projects
   (Jenner, 2010).
   Once the correct projects are selected, project success can be
   assessed in two steps usually called appraisal and evaluation. The
   appraisal occurs before the beginning of each project in order to
   support the approval of the business case, while the evaluation
   occurs at project closure in order to identify project success or
   failure (Jenner, 2010; Zwikael and Smyrk, 2011). The appraisal
   measures the relevance of each project and defines expectations,
   which are inputs for the definition of success criteria. Since
   projects are investments which usually aim to maximize return,
   an important part of this step is the financial appraisal (Jenner,
   2010; Levine, 2005) or feasibility studies (Yu et al., 2005). Later,
   the evaluation analyses the actual achievements against those
   success criteria previously defined in order to identify whether
   projects were successful (Jenner, 2010; Zwikael and Smyrk,
   2011).
   While there are several different models to measure project
   success, many authors, such as Baccarini (1999) and Pinto and
   Mantel (1990), agree on two approaches to its assessment:
   project management performance and delivery of benefits to
   the business, clients and stakeholders. In the past, project
   success was evaluated mostly based on criteria associated to
   the “triple constraint”: cost, schedule and scope (Ika, 2009;
   Shenhar and Patanakul, 2012; Zwikael and Smyrk, 2011), which
   are strongly related to the evaluation of project management
   performance, usually assessed using Key Performance Indicators
   – KPIs – designed to measure the adherence to budgets,
   schedules and technical specifications (Bryde, 2005). However,
   a complete evaluation of success requires a value related
   component (Kerzner, 2011), replacing this evaluation method
   for another focused on the project contribution to the business
   strategy (Patanakul and Shenhar, 2012) including the creation
   of shareholder value (Ika, 2009; Levine, 2005).
   Ika (2009) splits the benefit related component of the
   assessment into ‘Project/Product Success’ – satisfaction of end
   user and benefits to stakeholders and project staff – and
   ‘Strategic Project Management’ – business success, achievement
   of client’s strategic objectives. More recently, Camilleri
   (2011) divides benefit between ‘project success’ – outcomes
   and benefits – and ‘Project Corporate Success’ – the achievement
   of strategic objectives. Zwikael and Smyrk (2011) also separates it
   into ‘Ownership Success’ – benefits less dis-benefits and costs –
   and ‘Investment Success’ — financial return to the organisation.
   Although these authors have suggested different ways to
   assess the delivery of benefits and the consequent creation of
   strategic value to the business, this paper suggests that the
   delivery of benefits to stakeholders has to be related to
   business strategies and to the achievement of wider business
   objectives, especially by the financial perspective, considering
   ‘project success’ as a more comprehensive approach
   (Cooke-Davies, 2002).
   Although there are several criteria available to evaluate project
   success, the judgment of success or failure can be taken based on a
   more situational or subjective basis (Ika, 2009; McLeod et al.,
   2012). Different perspectives using the same criteria can evaluate
   the same project as a success and as a failure. On the other hand, a
   set of criteria can be suitable to some perspectives but unsuitable
   for others. For example, project management success, ownership
   success and investment success are assessed by different
   perspectives and criteria (Zwikael and Smyrk, 2011). Nevertheless,
   project managers are responsible for the alignment of
   expectations among stakeholders in order to define project success
   (Kerzner, 2011). Interestingly, these same project managers are
   usually kept apart of the rationale for project selection and
   prioritisation, so they may not understand the relevance of their
   projects in order to deliver the expected benefit to the business
   (Melton et al., 2008). Thus, a question remains unanswered for
   them: what value do businesses need?
   54 C.E.M. Serra, M. Kunc / International Journal of Project Management 33 (2015) 53–66

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