Interview with: Dmitry Ilenkov, PM Consultant, Lecturer
LinkedIn: LinkedIn Profile
Interview by: Frank Turley
Date: January 2019
Job Title: Project Benefits
Dmitry is a project management practitioner with over 10 years of experience. In 2014, he started lecturing and now he is an associate professor at Finance University under the Government of the Russian Federation. In 2015, he founded PMClub to support young project management professional and in 2016 he became the President of PMI Moscow Chapter, Russia.
One of his favorite topics is project benefits so I decided to ask him a few questions.
1) What are benefits?
Benefit is the measurable improvement resulting from an outcome perceived as an advantage by one or more stakeholders, which contributes towards one or more organisational objectives. You may say that we undertake projects to gain benefits.
For example, you are building a highway to connect distant suburbs with the city centre.
The project output will definitely be the highway itself, the outcome - people spend less time in traffic jams, the benefits: pollution reduced by x %, real estate in the suburbs goes y% up. But here comes the thing - residents of the neighbourhood you built the highway through are not likely to enjoy a road view in the backyard or noise from the passing traffic.
Quite possibly some people are going to sell their apartments if they are too close to new highway or put them on rent, and the prices will get down, which will cause other consequences. Here we are facing project disadvantages, and we should never forget that they always come along.
2) How do benefits differ from Return on Investment?
Return on investment (ROI) is a model used to evaluate investment efficiency.
It can be applied to measure financial benefits, but not all benefits are financial, and not all projects are intended to bring profit.
For example, university is organizing an annual alumni event. The benefits here might be 100 000 Euro donated to the university, which is a financial benefit and 100 new alumni joining the association, which is not financial.
There are also intangible benefits, which are sometimes hard or nearly impossible to measure. Do not worry. As Albert Einstein put it, “Not everything that counts can be counted. And not everything that can be counted counts”.
3) Why should projects bother tracking on benefits during the project?
A project completed within the Triangle of Constraints is not the end goal. We launch projects to bring change and value to our business, to our communities. Tracking on benefits helps us justify the project while initiation and check whether justification is still valid during execution.
4) Who should be involved in benefits definition?
Beauty is in the eyes of beholder - what one stakeholder may see as a benefit, can be seen as a disadvantage by another. That is why it is better to involve all relevant stakeholders and ensure that we do not miss a big piece of the puzzle.
5) How to prevent people from over exaggeration of the benefits, so they get their project funded?
“Culture eats strategy for breakfast”, as Peter Drucker once pointed. It is vital to have a healthy environment in your organization, where employees share common values and goals. Besides, we need to review benefits on a regular basis if we don’t want them to become a kind of New Year resolutions. And we need to have the right person in charge - benefits owner, the one not only responsible for benefits identification, but accountable for their realization.
6) Who should track benefits during the project?
Benefits owner. If program management is in place, it can be the program manager. But most often it is not. The project manager does not fit this role - he is responsible for achieving project goals, not benefits. Then the most appropriate person is a project sponsor - the one who is interested in acquiring project benefits and has enough power/influence to be in charge to track the benefits, communicate them and more important, take action when needed.
7) Do we need to track benefits after the project is complete and why?
Benefits usually arise not during the project, but after it is complete. In my experience, tracking benefits can provide you with invaluable intelligence to enhance project selection and motivate teams. Also, sometimes we may find it necessary to undertake additional activities (another project possibly) to exploit the benefits or to mitigate disadvantages. Unfortunately, only 52% organizations actually track benefits achievement.
8) What are typical mistakes you see with regards to benefits?
Well, we do plenty of mistakes, regarding benefits. The main one - we try to ignore them.
According to PMI research, only 45% organizations identify benefits and only 36% create metrics. That means we initiate projects without any clue, what they will bring.
Second mistake - we do not have a person, responsible for benefits. We facilitate workshops, create RACI, do all sorts of things to find out who is responsible for each activity, but we don’t have a person, responsible for the benefits - the real reason, why the whole project is undertaken. Just ask yourself - who is responsible for tracking benefits after your current project is complete, and then approach that person and ask him the same question.
9) And last tips - where to get more information ,etc....