Earned Benefit Program Management

Aligning, Realizing, and Sustaining Strategy

Crispin Piney

Publisher: CRC, 2018, 363 pages

ISBN: 978-1-03-247659-9

Keywords: Program Management, Strategy, Risk Management, Benefit Management

Last modified: March 28, 2024, 1:07 p.m.

No one can disagree that benefits are good things. Whether you are responsible for projects, programs, or portfolios, you are increasingly expected to think — and act — in an appropriate benefits-driven way. However:

    • Do you understand that what may be appropriate for a project may be inapplicable for a program?
    • Can you avoid the trap of wishful thinking based on inflated expectations and underestimated costs?
    • Can you manage your program or portfolio from inception to final delivery in a consistent, benefits-focused way based on a single, coherent model?

This book describes how Earned Benefit Program Management techniques provide an innovative, all-inclusive model and set of tools developed specifically to answer these questions. This model consolidates the key concepts of project, program, and, portfolio management and ensures that all program and portfolio management steps are carried out based on a single, signed-off model in a consistent, verifiable manner within a consolidated life cycle. This approach guarantees alignment with strategic goals and constraints through every stage of a program.

Case studies highlight the key features of the approach and provide important lessons and insights for managing programs. Although the ideas and concepts for each topic are fully consistent with existing standards and other published material, they are based on new thinking and go beyond current practice. They provide a set of original and powerful techniques that are applicable to both programs and portfolios in a wide range of business environments.

  1. Defining the Domains
    1. In the beginning…
    2. Projects, Programs, and Portfolio
      1. Why Does This Matter?
    3. Projects and Operations
    4. Understanding the Roles
      1. Investor Focus
      2. Business Focus
      3. Supplier Focus
      4. Implementer Focus
      5. Review
    5. Commonalities
    6. Differences
      1. Tools
      2. Control
      3. Easing the Transition
    7. Compromise Terminology
    8. Desired Result
    9. Conclusion on Ps. O, and T
    10. Loose Ends
      1. Evolutionary Projects
      2. Integration Projects
    11. Towards Total Program Management
    12. Summary
    13. Now to Focus on Programs
    14. References
  2. Understanding the Problems
    1. Overview
    2. Synergy
      1. The Need for Synergy
      2. The Problem with Synergy
      3. Characteristics of the Benefits Realization Map
    3. Business and Benefits Management: The Core Concepts
      1. Levels of Detail
      2. Mindset
      3. Time
      4. Visibility
      5. Accountability
      6. Authority
      7. Scope of Control
      8. Impact
    4. Structure of the Benefits Realization Map
    5. Recap on on the Benefits Realization Mapping Techniques
    6. Summary
    7. The Need for End-to-End Control
    8. References
  3. A Life Cycle for Program Management, Benefits Management, and Business Analysis
    1. Introduction
    2. Current Life Cycles
      1. The Program Management Phases
      2. Program Definition
      3. Delivery of Program Benefits
      4. Program Closure
      5. Linking the Programs to the Benefits
    3. Modified Benefits Realization Life Cycle
      1. Defining the Modified Life Cycle
      2. Overview of the Benefits Realization Life Cycle Phases
    4. Close-Up on the Benefits Realization Life Cycle
      1. Benefits Assessment
      2. Business Case Development
      3. Benefits Realization Planning
      4. Benefits Realization
      5. The Completion Phase
      6. Business Analysis Skills and Tools
    5. Integrating Business Analysis and Project Management
      1. Vive la Différence
      2. Core Concepts
      3. Effective Link to Program Management
      4. The Business Analysis Life Cycle
    6. Working with the Business Analysis and Project Management
    7. Case Study: QERTS Merger
      1. Benefits Assessment
      2. Business Case Development
    8. Summary
    9. References
  4. Building an Integrated Business Model
    1. Business Case Development
    2. Contributions and Allocations
    3. Description of the Benefits Realization Map
      1. Entities
      2. From Right to Left
      3. From Left to Right
      4. Reviewing the Completed Map
    4. The Business Transformation Example
      1. From Right to Left: The Business View
      2. From Left to Right: The Technical View
      3. Linkages Showing Relationship
    5. Estimating the Contribution Fractions
      1. Analog Evaluation Approach
      2. Quantifying the Fractions
    6. Applying the Concepts to the QERTS Example
      1. Business Consultancy Approach to Building the BRM
      2. Start with the Business Target
      3. QERTS Strategic Outcomes
      4. QERTS Business Outcomes
      5. QERTS Business Capabilities
      6. QERTS Technical Capabilities
      7. QERTS Initiatives
      8. Completing the Map
    7. A Honest Business Case
    8. Summary
    9. The Next Steps
    10. References
  5. Calculating the Model
    1. Picturing the Contributions
      1. Identifying the Contributions
      2. Calculating the Contributions
      3. Remote Contributions
    2. Understanding Allocations
    3. Selecting the Algorithm for Determining the Allocation Fractions
      1. Agreeing on the Allocation Fractions by Consensus
      2. Using Contribution Fractions to Calculate the Allocation Fractions
    4. Using the Contribution Values to Calculate the Allocation Fractions
    5. Using the Contribution Shares to Calculate the Allocation Fractions
    6. Calculating Allocations
    7. Defining a Decision Criteria
    8. Proof that the Fourth Option Satisfies the Criterion
    9. Summary
  6. Disbenefits and Essential Links
    1. Allowing for Disbenefits
      1. The Contributions in the Disbenefits Example
      2. The Allocation Fractions in the Disbenefits Example
      3. The Allocations in the Disbenefits Example
      4. Discussion on the Disbenefits Example
      5. Percentage Disbenefits
      6. Are We There Yet?
    2. Essential Contributions
      1. First Option
      2. Essential Node and Essential Contribution
    3. Applying the Concept of Essential Links
      1. Prioritizing Initiatives
      2. Developing the Financial Justification for an Initiative
      3. Performing a Risk Analysis of the Network
      4. Optimizing the Benefits Realization Map
      5. Discussion on Contributions and Essential Nodes
    4. Creating an Essential Network
      1. Picturing the Essential Contributions
      2. Calculating the Contributions
      3. Conclusion: The Value of the Concept of Essential Contributions
    5. Structured Approach for Removing the Nodes
    6. Recalculating the Pruned Network
      1. What's in the BEER?
      2. Step 1: Clear the Redundant Data
      3. Step 2: Recalculate the Pruned Network Contribution Shares and Contributions
      4. Step 3: Calculate the Contribution Fractions
      5. Step 4: Reuse the Initiative Allocations
      6. Step 5: Recalculate the Pruned Network
    7. Summary
    8. Current Status
  7. Applying the BRM Approach to the QERTS Example
    1. Analyzing Outcomes and Options: The QERTS Example
    2. Revising the Program
      1. Simple Initiative Removal
      2. Accounting for Essential Links
    3. Alternative QERTS Example
      1. Simple Initiative Removal
      2. Accounting for Essential Links
      3. An Alternate Remedy
      4. Insights for program Management
      5. Resolving Subprograms
      6. Insights from Subprograms
    4. Including Disbenefits in the QRTS Example
      1. Mitigating the Disbenefits in the QERTS Example
    5. Summary
  8. A Generalized Approach to Scheduling and Cash Flow
    1. Background
    2. New View
    3. The New Approach: Characterizing the Components
      1. Events
      2. Arrows as Vectors
    4. Towards a Simplified Scheduling Model
    5. Extensions to Other Scheduling Methods
      1. PERT
      2. CCPM
      3. Milestone Planning
    6. Applying VEST Approach to Programs
    7. Additional Definitions
    8. Applying the VEST to the QERTS Example
      1. Scheduling the Initiatives Activities
      2. Creating an Integrated Schedule
    9. Linking Cash-Flow to the Schedule
      1. Effective Dates
      2. The Lag Evaluation Rules
      3. Dealing with Essential Links
      4. Reviewing the Effect of Multiple Lags
      5. The Cumulative Contribution Curve for the QERTS Example
      6. Optimizing the Cash Flow
    10. Summary
    11. From Schedule to Risk
    12. References
  9. Total Risk and Issue Management
    1. Background
    2. Overview
      1. Contentious Introductory Assertion
      2. Background
    3. Issues
      1. The Situation
      2. Success
      3. The Dual Nature of Issues
    4. Risks
      1. Uncertainty
      2. Addressing the Three Components of Risk
      3. Choose Any Two of Three
    5. The TRIM Process
      1. Define TRIM Framework
      2. Identification
      3. Analysis and Prioritization
      4. Action Planning
      5. Execution, Monitoring, and Control
      6. Links between the TRIM Processes
    6. Generic versus Specific Risks
      1. Probability Distributions
      2. Sensitivity Analysis
      3. Hypothesis Analysis: The Confidence Matrix
      4. Resource Loading
    7. Summary
    8. References
  10. Resource Capacity Planning
    1. The Challenge
    2. Simple Operations Resourcing Model
      1. Practical Operations Staffing Model
      2. Theoretical Resourcing Model for Unplanned Remedial Actions (URAs)
      3. Calculating Staffing Levels
    3. Applying the New Model
      1. Servicing URA Requests
      2. Staffing for Operational Staff in Projects
      3. Planning SOA Resources
    4. Implementing the Erlang-Based Approach
      1. Advantages of the Erlang-Based Approach
      2. Planning the Required Organizational Changes
    5. Organizational Change Program
    6. Summary
    7. References
  11. Procurement
    1. Background: Innovative Contractor Engagement and the London Underground Bank Station Capacity Upgrade
    2. Tendering Lifecycle
      1. Process Overview
      2. Pre-Dialog Phase
      3. Dialog Phase
      4. Interim Phase
      5. The Invitation to Tender (ITT) Phase
      6. The Evaluation and Award Phase
    3. ICE and the Benefits Realization Map (BRM)
    4. Modeling the Value of the Option
    5. The Next Step: Tracking the Work
    6. Summary
    7. References
  12. Implementation Tracking  — Earned Benefit
    1. The Earned Benefit Approach
    2. The Component-Benefit Matrix
      1. Calculating the Component-Benefit Matrix
      2. Calculating the Earned Benefit
    3. Earned Value
    4. Further Development of the Earned Benefit Calculations
    5. Earned Value and Earned Benefit Case Study
      1. The Garden Services Business Plan
      2. The Initial Parameters for the Calculations
      3. Current Status
    6. The Earned Benefit System
    7. Earned Value Abbreviations, Parameters, and Indicators
      1. AC: Actual Costs
      2. AD: Actual Date
      3. EV: Earned Value
      4. PV: Present Value
      5. CPI: Cost-Performance Index
      6. SPI: Schedule-Performance Index
      7. BAC: Budget at Completion
    8. Earned Benefit Abbreviations and Values
      1. ADD: Actual Date Duration
      2. EB: Earned Benefit
      3. EBAC: Earned Benefit at Completion
      4. PB: Planned Benefit
      5. EBEV: Earned Benefit Equivalent Value
      6. BCPI: Benefit-Cost Performance Index
      7. BPI: Benefit Performance Index
      8. EBED: Earned Benefit Equivalent Date
      9. EBEDD: Earned Benefit Equivalent Date Duration
      10. BV: Benefit Variance
      11. BSV: Benefit Schedule Variance
      12. BSPI: Benefit Schedule Performance Index
      13. VED: Value Equivalent Date
      14. VEDD: Value Equivalent Date Duration
      15. BVSV: Benefit Value Schedule Variance
      16. BVPI: Benefit Value Performance Index
      17. CBM: Component-Benefit Matrix
      18. CCBi: Component Contribution to Benefit
      19. CEBi: Component Earned Benefit
      20. EBEC: Earned Benefit Equivalent Cost
      21. VEB: Value Equivalent Benefit
      22. PPC: Program Percent Complete
      23. PED: Planned End Date
      24. PEDD: Planned End Date Duration
      25. PSD: Program Start Date
      26. TCPIx: To-Complete Performance Index
      27. TCPFx: To-Complete Performance Factor
    9. Further Analysis of the Garden Services Case
      1. Understanding the Earned Benefit Results
      2. Revising the Business Case for the Garden Services Program
    10. Revisiting Earned Benefit
      1. Evaluating the Component-Benefit Matrix from the Results Chain
      2. Earned Benefit Based on the Results Chain Calculations
      3. Earned Benefit Including Essential Links
    11. Applying Earned Benefit for Status Reviews
    12. Communicating the Information
    13. Conclusion
    14. The Benefits of Earned Benefits
    15. Earned Benefits Parameter Tables
    16. Summary
    17. References
  13. Business Key Performance Indicators
    1. Setting Key Performance Indicators
    2. Operational KPIs
    3. Agreeing on the Questions
    4. Categories of KPIs
    5. Operational KPIs
      1. Strategic Outcome KPIs
      2. Business Outcome KPIs
      3. Quantifiable Outcome KPIs in the QERTS Example
      4. Nonquantifiable Outcome BPIs in the QERTS Example
    6. Model-Related KPIs
    7. Analyzing the KPIs
      1. Operational Values
      2. Using Operational and Model KPIs to Assess the Model
    8. Analyzing the Model
      1. Left-to-Right Analysis
    9. Example Based on QERTS Model
      1. Developing the Component-Outcome Matrix
      2. QERTS Example KPIs
    10. Summary
    11. References
  14. Stakeholder Analysis
    1. Stakeholder Interest and Power
      1. Three Categories of Stakeholders
      2. Level of Power
      3. Level of Interest
      4. Stakeholder Impact
      5. Stakeholder Impact Analysis
    2. Mapping the Analysis onto the Model
      1. Mapping Stakeholder Power
      2. Mapping Stakeholder Interest
      3. Normalizing the Results
      4. Using a Mendelow's Grid
    3. QERTS Example
      1. Marketing Group
      2. IT Group
      3. Numerical View
      4. Medelow's Grid for QERTS
    4. Summary
    5. From Analysis to Communications
    6. References
  15. Communication — Why, How, and What
    1. Introduction
    2. Understanding Hierarchies
      1. Definition of Hierarchy
      2. Examples of Hierarchies
    3. Addressing Data, Knowledge, Information, and Wisdom
      1. Background to DIKW
      2. Definitions
      3. Overview of the DIKW Process
      4. Negotiating the DIKW Ladder
      5. A DIKW Example from Earned Value
      6. Applying DIKW to Communications and Stakeholders
    4. Effective Communications
      1. The Scope of Communications Management for Projects and Programs
    5. Information and Communications
      1. Planning the Work
      2. Communication and the Program Manager
    6. The Visible System Approach
      1. The Visible System Model
      2. The Components of the VSM
      3. The VSM and the Program Environment
      4. VSM Conclusion
      5. Synergy Between VSM and DIKW
    7. Concluding Remarks
      1. Vision and Intuition
      2. Attaining Wisdom
    8. Summary
    9. And Finally
    10. References
  • Finale: Benefit Mapping the Book
    1. Mapping the Book
    2. The Book's Strategic Benefits
      1. The Benefits
      2. The Contributions
    3. The Book Initiatives
      1. The Initiatives
      2. The Allocations
    4. The Book Review Model
      1. Learning Outcomes
      2. Learning Capabilities
      3. Chapters
      4. The Links
    5. Analysis of the Book Review Model
    6. Final Summary
    7. References
  • Appendix: Carrying Out the Calculations
    1. Calculating the Contributions
    2. Calculating the Allocations
    3. Completing the Calculations