INVESTABILITY – IS YOUR PROJECT WORTH IT?
When it comes to project management, one of the key questions to ask is, ‘What advantages will this project create for the investors and key stakeholders?’
If someone, or an organization, is being asked to commit funding and resources to a project, it is not unreasonable for them to ask questions like, ‘What’s in it for ME? Why should I commit to this project? As a sponsor, I have the opportunity to put my money in several different projects – what is special about this one?’
Project Managers need to be able to confidently discuss the project in the context of the key stakeholders and the funding source.
Treat projects and programs as investments
It may seem like ‘just a matter of semantics’ but language is important. Words are important in defining behaviours within the team, and beyond.
Considering the benefits of an investment diverts the focus of projects from delivering within the triple constraints (time – cost – quality) towards addressing some of the more fundamental questions:
- What is the purpose of this investment?
- What are the specific advantages expected?
- Are these benefits worth the investment?
- How will the benefits be realized and measured? And when will that be?
A project which is defined by the need to develop (for example) a new light rail network will have a very different culture and approach to one which is defined as reducing commuting and travel times within a city.
The second, which is identified by its benefits, will require very different decisions to be made as it progresses in order to stay relevant to the ultimate purpose of the project. It will also open up the options available to the project rather than commit to a single technical product early in the planning process.
Link scope to benefits that are important to stakeholders
As projects become more complicated and complex it is crucial that the links between the content of the project (scope) and the necessary business changes are linked to benefits which are important to the stakeholders. This will bring clarity to communications and purpose to the efforts of the project. It will also ensure that decisions made are consistent with the objectives of the investment.
When a project is behind schedule and/or over budget, there is pressure to reduce, or change, the scope of the work. Only by understanding the links between function, capability and benefits can the impact of decisions be clearly understood. Losing benefits, or missing the opportunities for realizing benefits, is an excellent counterargument to de-scoping. De-scoping may bring the project back within the cost and schedule tolerances, but at what expense to the benefits? Changes may still be necessary, but with awareness of the significance of each of the project components, decisions will be better informed.
Develop Investment-savvy project teams
As the project management profession advances, there is a need to develop different skills, models and tools, to ensure that the practitioners remain fundamental to the success of the investment. Understanding, and helping to shape, the context of investments means an earlier involvement in many projects and taking on advisory and consultative roles.
Planning, assuring and supporting the transitions into operational use of the project products and changes to the operational environment should become part of project teams’ functions.
One of the great advantages, that I see, is the engagement of the right senior stakeholders and gaining their commitment to the actions required. By talking the language of the investors, project managers and their teams will embed themselves within the rest of the organization, demonstrate their worth and help benefits to be realized.
Investability – it’s all about the benefits
Benefits are fast becoming the key determinant of project success and investability. So, decisions about the choice of projects to be funded, their priority within the organization and what to do if the business cases change will be made primarily upon the basis of the value they create and the benefits that will be realized.
Benefits Realization Management is not just a fad or a passing phase. It is a practical approach to ensuring that scarce resources are directed to projects which will make a difference to the performance and context of an organization as well as the community at large.
Amplify™ software equips you to test project investability
Amplify™ enterprize-ready software simplifies prioritizing your project portfolio with its ability to select, prioritize and sequence initiatives based on return on investment (ROI), net present value (NPV) and overall contribution to the investment portfolio. Associated threats to performance such as; risks, assumptions, issues and dependencies (RAID) are also managed at the same time.
Amplify™ software’s distinguishing capabilities enable you to prioritize and reprioritize upcoming and in-flight investments to ensure that they continue to represent good value for money whilst providing the insight necessary to communicate trade-offs and finalize investment decisions.
About Kenn Dolan
Author of “Implementing Project and Program Benefits Management” (2018), Kenn is a recognized expert in benefits realization management, stakeholder engagement, portfolio, program and project management and the application of best practices. He has extensive experience advising clients across five continents.
As an in-demand management consultant and public speaker, Kenn has influenced the implementation of best practices in program and project management to improve performance and maturity within organisations in the financial, IT, defence, resources, construction and public sectors. He has coached and mentored senior executives in over 20 countries.