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In the realm of program management, the Enterprise Program Management Office (EPMO) plays a pivotal role, ensuring that each program aligns with strategic objectives and delivers maximum value. Two crucial methodologies in the EPMO's strategy are phase gating and benefit realization. Let's dig into these concepts and understand how they bolster the EPMO's efforts to extract optimal value from your program.
Phase gating, or stage-gate processes, is a technique where a program is segmented into distinct stages or "gates." Each gate serves as a checkpoint to assess the progress and decide whether the program should continue, be altered, or be discontinued. This structured approach allows continuous improvement and guarantees alignment with the organization's strategic goals at every stage.
Benefits realization, in contrast, is the procedure of planning, monitoring, and managing the expected benefits from a program. It ensures the program yields the intended outcomes and aligns with the organization's strategic objectives.
So, how do these strategies facilitate the EPMO in extracting value from your program?
Phase Gating: Upholding Quality and Mitigating Risks
Phase gating allows EPMOs to make data-driven decisions throughout the program lifecycle. Fragmenting the program into manageable phases enables a thorough review of progress, resources, and alignment with the original business case. Each gate acts as a decision point, ensuring only programs with a clear and achievable plan for delivering value moving forward.
For example, a typical program might progress through the following gates: Initiate, Discover, Plan, Design, Execute, and Business Realization. Initiation starts with documenting the business need in a Project Initiation Document and gaining executive sponsorship. During the 'Discover' phase, the EPMO identifies the program's purpose and assesses its alignment with the organization's strategy. Resources are allocated in the 'Plan' phase, and a detailed timeline is established. The 'Design' phase involves developing solutions to achieve the program's objectives. 'Execute' is when the planned solutions are implemented, and 'Business Realization' assesses whether the program has delivered the anticipated benefits.
Moreover, phase gating aids in detecting potential issues early on, thereby mitigating risks and lessening the probability of program failure. It promotes regular communication among program teams, stakeholders, and decision-makers, fostering transparency and accountability.
Benefits Realization: Confirming Program Outcomes Synchronize With Strategic Goals
Benefits realization, conversely, is all about the overarching view. It involves juxtaposing the actual benefits of the program against the expected ones. This approach ensures every program adds value to the organization's strategic goals. It requires a coordinated effort from various key players within an organization to effectively measure and validate the actual benefits accrued from the program against the expected ones.
1. C-Level Executives: The foundation of a program begins with the strategic goals set by the C-level executives. These high-level objectives determine the direction and purpose of the program. They initiate the ripple effect of setting the program in motion and remain involved in overseeing the alignment of program outcomes with strategic goals.
2. Business Executive Sponsor and Business Lead: They are critical in developing the program's Key Performance Indicators (KPIs) to deliver to achieve the set goals. Their understanding of the business landscape, coupled with the strategic vision provided by the C-Level, ensures the program remains on track to deliver tangible value.
3. EPMO and Procurement Teams: Once the KPIs are defined, the EPMO and procurement teams step in to evaluate the feasibility and costs associated with implementing the program. Their role is instrumental in balancing the program's expected benefits with the investment required to achieve those benefits.
4. Finance Team: The finance team assists in establishing a solid financial baseline and defining year-over-year realization goals. They work with other groups to track financial benefits and measure the program's overall impact on the organization's bottom line.
When each of these players performs their role effectively, benefit realization ensures the focus remains on delivering tangible benefits that add value to the organization. It provides a robust framework to comprehend and measure the program's impact, from the costs and resources invested to the benefits realized.
By combining the meticulous attention to detail facilitated by phase gating with the broader strategic alignment ensured by benefit realization, EPMOs can ensure that every program contributes maximally to the organization's broader strategic goals.
The Dynamic Duo: Phase Gating and Benefits Realization
Phase gating and benefit realization serve as the backbone of program management. They work hand in hand to ensure that every program is effectively controlled, monitored, and aligned with the organization's objectives.
Here is an example of how phase gating works in conjunction with the questions you should be asking at each gate to ensure your program is on track to deliver benefits:
Phase 0: Initiate
Should we investigate a solution to this business need?
Inputs {Project Initiation Document and Executive Sponsorship}
Phase 1: Discover
Has the Business Case been developed sufficiently? Do the benefits justify the effort?
Inputs {Business Requirements, Estimate to Implement and Sustain, Cost Savings, Profit Opportunities, Non-Monetary Benefits, Baseline Metrics - or simply put, the Business Case}
Phase 2: Define
How much effort should we invest in designing a solution?
Inputs {Timeline, Resource Plan, Refined Budget, RAID Log, Technical Review and Feasibility Assessment, Business Signoff}
Phase 3: Design
Is the design complete and adheres to business requirements and scope?
Inputs {Design Documents, Updated Timeline, Updated Resource Plan, Updated Budget, RAID Log, Technical and Business Signoff}
Phase 4: Execute
Is the solution stabilizing? Have users been trained sufficiently to address change needs? Has benefits realization begun?
Inputs {Build of Deliverable, Test Results, Issue Log, RAID Log, Technical and Business Sign Off}
Phase 5: Realize
Have the benefits been adequately captured and reviewed against the business case?
Inputs {The Business Case, Baseline Metrics, New Deliverable Performance Metrics, Retrospective, End User Feedback}
Each phase gate has a critical question associated with it, and the answer to these questions will determine whether the program progresses to the next phase. In other words, a program's progress depends on satisfying the criteria defined at each gate.
On the other hand, benefits realization ensures that a program's outcomes align with the organization's strategic goals. It ensures that every investment in a program contributes to tangible benefits that add real value to the organization.
In essence, phase gating and benefit realization serve as two bicycle wheels, each indispensable to the other. When they work together, they ensure that a program progresses smoothly from one stage to the next, delivering tangible benefits at each step. They provide a solid framework to ensure every program contributes maximally to the organization's strategic goals.
Understanding phase gating and benefits realization is critical to optimizing the value of your programs. These tools empower EPMOs to make informed decisions, control risks, and ensure that every program contributes to the organization's broader strategic goals.
Stay connected with our blog for more insights into program management best practices, tips, and strategies to maximize the value and impact of your programs.
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