Market Analysis and BRM (Benefit

Realization Management) Solutions:

A practical guide for KDM (Key Decision Maker)
July 2011

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Contents
Chapter 1: Introduction ...................................................................................... 5
IT (Information Technology) Investment Management: A Global Perspective................... 5
IT Investment Trend: A Global Perspective ....................................................................... 5
IT Investment: A Regional Distribution............................................................................. 6
Technology Trends that will lead IT Investment over the Next Five Years: ....................... 7
IT Project Paradox: A Common Failure............................................................................. 8
Traditional IT Project Evaluation and Value Realization Limitation .................................. 8
Pros and Cons of commonly used Financial Techniques.................................................... 9
IT Project Value Realization from Business Perspective and rationality of BRM (Benefit
Realization Management)................................................................................................ 10

Chapter 2: Benefit Realization Management (BRM) ...................................... 11

What is BRM?................................................................................................................. 11
Why BRM?..................................................................................................................... 11
BRM for Whom? ............................................................................................................ 12
Fundamental process of BRM Approach ......................................................................... 13
Frameworks for BRM ..................................................................................................... 14
BRM Models................................................................................................................... 16
Cranfield BRM process model..................................................................................... 16
Active Benefit Realization (ABR) Model .................................................................... 17
Project Appraisal Method (PAM) BRM Model............................................................ 18
The DMR model for BRM........................................................................................... 18

Chapter 3: BRM Practice in Different Arena .................................................. 20

ERP Implementation and BRM ....................................................................................... 20
Telecom Project Value Optimization ............................................................................... 21
Institutional Innovation (Education Sector)...................................................................... 22
Public Sector ................................................................................................................... 23
Developed Economy ....................................................................................................... 25
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Emerging Economy......................................................................................................... 25

Chapter 4: BRM Case Study............................................................................. 26

Vodaphone Customer Intelligence Case .......................................................................... 26
Vodaphone PRINCE2 Case............................................................................................. 28
SIGMA BRM Case ......................................................................................................... 29
Fujitsu Case .................................................................................................................... 30

Chapter 5: BRM Application Related Issue..................................................... 31

Issues Related with the Adoption of BRM....................................................................... 31
IT Managers Approach towards BRM............................................................................ 31
Business Managers Approach towards BRM.................................................................. 32
Major Challenge: Aligning BRM with Corporate Strategy............................................... 32
Emerging Issue of EPMO (Enterprise Project Management office) and BRM.................. 32

Chapter 6: Conclusion & Recommendation..................................................... 34

Conclusion & Recommendation for Organization............................................................ 34
Recommendation for KDM (Key Decision Maker).......................................................... 34
Align IT with Corporate Strategy................................................................................. 34
Link Current Practice with BRM ................................................................................. 36
Integrate BRM with Strategy Map ............................................................................... 37
Adopt a BRM Model ................................................................................................... 37
Create EPMO (Enterprise Project Management Office) ............................................... 38
Recommendation for Business Manager.......................................................................... 39
Recommendation for IT Manager.................................................................................... 40
Recommendation for EPMO and Project Manager (PM) ................................................. 40

List of Figures
Figure 1: Estimated Actual and Projected Global Spending on IT from 2003 to 2013, Source:
World Information Services Technology Association (WITSA) Digital Plant, 2010 (October
2010) (Forecast in US$) ........................................................................................................ 6
Figure 2: Project management cycle shift: conventional vs. BRM approach ........................ 12
Figure 3: Cranfield process model of benefit management (Source: Ward and Peppard, 2002)
........................................................................................................................................... 16
Figure 4: Active benefit realization approach (Source: Remenyi & Sherwood-Smith, 2002) 17
Figure 5: DMRs benefit realization .................................................................................... 19
Figure 6: The core element of the DMR result chain (source: Thorp, 1999, 2001) ............... 19
Figure 7: JISC institutional innovation program framework ................................................ 23
Figure 8: Public sector project management cycle ............................................................... 24
Figure 9: The new IT alignment: IS capability and organizational performance (Source:
Pappard & Ward, 2004)....................................................................................................... 35
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Figure 10: The Application Services Portfolio and IT Infrastructure (Source: Pappard, 2003)
........................................................................................................................................... 35
Figure 11: Tasks need to accomplish in order to gain benefit from IT project ...................... 36
Figure 12: Issues of BRM.................................................................................................... 36
Figure 13: A Strategy Map (source: Robert S. Kaplan and David P. Norton) ....................... 37
Figure 14: BRM strategy and positioning in organizational framework ............................... 38
Figure 15: Suggested EPMO structure................................................................................. 39

List of Tables
Table 1: Territory wise % contribution to IT production and projected growth over 2014...... 6
Table 2: Benefit frameworks (Sources: Shang and Seddon, 2002) ....................................... 15

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Chapter 1: Introduction
IT (Information Technology) Investment Management: A Global Perspective
According to change management guru John Kotter, Up to 70% of change initiatives fail
to deliver on the benefits that they set out to achieve. The question is why, what is the
problem?
Another finding of Cranfield University says, only around 50% organizations undertake expost evaluation of business benefits delivery and this is largely unchanged over the last
decade. Due to technological revolution, in the last decade the world changed rapidly.
Organizations started viewing IT as the major driving path for change. Almost all the
organizations across the world started using IT in their business development and day-to-day
business. Especially IT Companies are spending billions of dollars in development project.
However, most surprising matter is that still many organizations report ROI from IT
investment project is 1% or less. Only in the US & UK, average cumulative yearly IT project
loss is about 58 billion.
Despite billion-dollar investment, across the world deriving a sustainable value from
technological change is still a constant challenge for the organizations. Ongoing
developments in IT have resulted in a growing need among organizations to build, integrate,
and acquire the most suitable applications that will enable them to achieve their corporate
strategy more efficiently and effectively. Achieving corporate strategy includes harnessing
the full power of systems, aligning with business perspective whilst recognizing the
importance of people, culture, and external drivers. The major challenge is with using right
appraisal metrics that can deliver 360% business benefits. It is the perfect time of every
organization to think about old vs. modern metrics to ensure the potentiality of ROI from IT
projects.
IT Investment Trend: A Global Perspective
Despite the sign of recent economic recovery, World Information Technology Services
Association (WITSA) Digital Plant, 2010 forecast says, the global spending on IT is expected
to grow 1.5% year on year to US$573.4 billion over the next few years that is pretty slower
than in the five years prior to the economic downturn. The locus of growth is expected to

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shift from North America and Europe to the Asia Pacific region, which will account for 43%
of the growth over pre-recession levels.

Figure 1: Estimated Actual and Projected Global Spending on IT from 2003 to 2013, Source: World
Information Services Technology Association (WITSA) Digital Plant, 2010 (October 2010) (Forecast in US$)

IT Investment: A Regional Distribution

According to Gartner research centre, the IT sectors are divided into five broad categories:
hardware, software, services, telecommunications and semiconductors. Though most
countries strive to distinguish themselves in one or more of these sectors, only the US has
successfully developed in each of these five sectors. All the IT investments fall under this
category. Currently global economy is recovering but its ratio varied across regions. IT
investments also failed to recover fully in regions. The emerging economy such as China &
APAC region continued to recover in a faster pace than the North America and Europe
market, which also supports the WITSA projection of focus shifting to Asia Pacific area. This
Region/Country

% of world IT supply

Projected % growth to 2014

US

30%

5.7%

EU

20%

3.6%

Japan

25%

-1%

Emerging Asia Pacific region

20%

43%

Rest world

5%

4%

Australia

13.8%

Canada

4%

Table 1: Territory wise % contribution to IT production and projected growth over 2014

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faster recovery of IT investments is a result of cloud computing and other new modes of
using IT:
It is already very clear that across the region, the change mainly is in IT and using IT. All the
way, IT is the driving force of todays business innovation & transformation and the focus is
gradually shifting to Emerging Asia Pacific region. Now issue is, how to best use of IT and
IT investment in business.
Technology Trends that will lead IT Investment over the Next Five Years:
In addition to the pre-defined five broad sectors - hardware, software, services,
telecommunications and semiconductors, there is a consensus that the major technologies of
IT user industries over the next five years will be (1) virtualization, (2) the Cloud and, (3)
Service-oriented Architecture (SOA).
Virtualization: In 2010, the Society of Information Management (comprises of senior IT
managers of Canada and the US) survey mentioned virtualization as one of the leading
technology investment in near future. It refers to software applications that create a virtual
(rather than an actual) version of hardware platforms, operating systems, storage devices and
network resources. It is expected to holds out a gross save on IT investment budget. In
addition, it also helps organization in human resource deployment flexibility. Companies can
easily trace when and where human resources are needed.
The Cloud: The OECD Information Technology Outlook, 2010 defines 'cloud computing' as
the provision of scalable IT services over the internet typically based on consolidated
hardware and software in large-scale data centers. Companies providing cloud services works
in one or more of three area: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS),
and Software-as-a-Service (SaaS). The cloud offers organization a substantial savings
potential in IT capital budget and operating costs. At the same time, it will also reduce the
need for in-house infrastructure and application support. For example, if a company of 15,000
employees move its email from in-house to a Cloud supplier, cost per employee would be
reduced by roughly 66% and IT staffing expenditures on email would decline by almost 90%
(as per OECD estimate 2010). US data shows that cloud companies are expanding at
exponential rates.
Service-Oriented Architecture (SOA): SOA is a high-level design approach where
orchestration can acts as flexible service platform. The discrete services provided by selfstanding components can be associated through orchestration. Data has to be arranged in a
structured way so that it can be useable in across platform. SOA creates ad-hoc applications
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to meet the organization need. The rational of using SOA is low marginal cost for new
application creation if a sufficient library of self-standing components is developed. The
required software is already exists as self-standing components. For large IT users, SOA
offers an economic and quick solution to meet the application needs by unlocking the risk of
locked into a obsolete software.
IT Project Paradox: A Common Failure
The Benefits of Organizational Change 2009 by Moorhouse Consulting for the Financial
Times reported that only 20% of the organizations believe that their organization succeed in
consistently delivering the planned benefits of change. It is because of using improper metrics
for evaluating IT projects. IT innovations and applications are usually involve huge financial
commitment and cost cutting. Organizations usually consider on improving task efficiency,
productivity, availability of timely business information for effective decision-making, gain
or sustain competitive advantage, and maintaining business agility but these attitudes are
already proved a wrong. Thus, it is gradually changing. Noticeable change is, now a days
organization not only invests in IT just for a competitive advantage, though for some it is
primary for survival but also sustain their competitiveness in the business.
The widely claimed paradox of IT productivity arises mainly when IT project fails to deliver
any or most of the expected business benefits. Mostly identified causes are as follows:

Improper alignment of the organizations business objective with IT project objective;

leading to inappropriate project selection

Unrealistic or overly high expectations from IT project

Organizations impatient to wait for long term and yet to be realized IT benefits

Use of financial techniques to evaluate IT returns; consider only monetary return

ignoring the intangible benefits of IT

Traditional IT Project Evaluation and Value Realization Limitation

Most organization faces difficulty in justifying their IT investment because they primarily
consider capital return by using financial evaluation techniques. However, the financial
techniques like Return on Investment (ROI), Net Present Value (NPV), Internal Rate of
Return (IRR), Cost-Benefit analysis and other similar payback approaches are failed to
consider the long term and intangible benefits that may accrue from an IT investment. The
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common trend of project failure, budget overrun, project cancellation, delay in project
delivery are also supports this logic.
Pros and Cons of commonly used Financial Techniques
Net Present Value (NPV): NPV approach is the widely used techniques to evaluate the
feasibility of a potential investment opportunity. Under this approach, all future cash flows
are discounted at the weighted average cost of capital for a company. It makes a comparison
of the present value of money with future value considering inflation and returns. If the NPV
of cash flows is greater than zero, company selects the project considering a positive NPV
and vice versa.

Pros: The main advantage is NPV ensures a greater present value of money comparing future
value. It gives a sense of security since it analyzes risk associated with future cash flows. If
needed it is possible to add more project to evaluate together.

Cons: NPV calculation is in simple mode so it cannot say when a positive NPV is achieved
and how long the project will produce positive NPV. The greatest limitation is in unlimited
time line. Another problem is, this approach assumes presence of abundant capital that may
not be the reality always. It ignores the scarcity of resources issues and does not consider the
size of investment in calculation. But, the IRR approach can help to overcome these
limitations.

Internal Rate of Return (IRR): The IRR is also called discounted cash flow rate of return
where NPV assumption is always equal to zero. It can be calculated on trial and error basis
until NPV is equal to zero. The project decision is positive if IRR is high. When it is
compares with the opportunity cost of capital or weighted average cost of capital if IRR is
higher the project has to be accepted.

Pros: Most organization use it as a quantifiable measure of return since it is based on

discounted cash flow rate. It can provide better guidance on a projects value and associated
risk.

Cons: The worth discussing three limitations are:

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Multiple or no Rates of Return if a project undergo one or more than one change in
project duration there is a possibility of generating multiple or no IRR at all.

Changes in Discount Rates if discount rate of a project change each year then
determining whether IRR is greater than the opportunity cost of capital or weighted
average cost of capital is impossible. Thus, it is difficult to decide.

Not Add Up a new project cannot be added with existing one; it must be combined
or evaluated on an incremental basis.

Payback Period: Payback calculates a return period back to the company of the original
investment. Generally, the lower the period, the project are accepted. It is alternatively also
called cut-off period because most of the organization sets a specific timeframe of return.

Pros: It can give an easy understanding of recouped timeframe of investment, projects taking
or rejecting decision is easy.

Cons: The approach ignores present time value of money and cash flows after the payback
period is reached.
IT Project Value Realization from Business Perspective and rationality of BRM (Benefit
Realization Management)
The limitations of the financial evaluation techniques clearly indicate that organizations need
to use non-financial techniques that look beyond purely quantifiable IT benefits. A study by
Lin and Parven indicates that it is rarely an organization using any formal non-financial
metrics for justifying IT investment, some kind of business perspective is present but little
formal approach. It is also noted that organizations using some kind of formal BRM
approaches as non-financial metrics have achieved a significant level of satisfaction from IT
investment. So here is the concept of BRM emerged as non-financial project evaluation
model to fill up the gap between what could be achieved and what is being achieved.
Suggested approach is continuous and active management of benefits throughout the project
or program life cycle. BRM transform the change initiatives and IT focus from project-level
to business-level impacts.

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Chapter 2: Benefit Realization Management (BRM)

What is BRM?
IT is a significant component of capital spending for most companies, representing typically
50 % to 75 % of total expenditures. More than 70% of their spending is fixed cost. In every
year when a company calculates real value of IT spending, they get a small percentage
success because prior years carry over spending and depreciation consumes big portion. As a
result, it is found that only 12% companies can accurately measure the business impact of
their IT investments. Most commonly, they evaluate IT projects from industrial-age approach
resulting automation-focused approach.

Most commonly, IT project evaluation falls under three categories:

1st is to evaluate in terms of cost

2nd is in terms of benefit

Last & important one is to balance benefit against cost. BRM is such an approach to
balance between cost and benefit

BRM is an approach used to identify, prioritize and optimize business benefits arising from
IT projects, which cannot be done effectively through traditional financial techniques. It is
also known as value management. The important factor is to change the attitude of
organization focusing on business benefit rather than only financial benefit. BRM model
helps organization to keep track of the processes involved in successful IT management and
increase their ability to identify not only the monetary returns but also the business benefits.
Why BRM?
A study cited by Thorp highlighted that 87% of the project were completed late, 57% were
over budget, and 45% failed to deliver expected benefits. Similarly, on an average 70% of the
IT projects ran either over budget or beyond schedule. It is also observed that most
companies lack formal benefit realization in critical area and they run too many projects at a
time so they cannot overcome crisis. As a result most projects becomes no more than a nonvalue add. To avoid this scary situation, BRM helps an organization to forecast & manage
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proactively, to measure financial & operational benefit and to realize strategic benefits. It is
about driving accountability for IT results across the organization.
The BRM approach includes traditional project management processes but it reaches well
beyond the boundary. It transform the conventional cycle of project management by counting
upstream and downstream impacts or results.

Figure 2: Project management cycle shift: conventional vs. BRM approach

With BRM implementation and continuous improvement, it is possible to envision 80% to

90% even more success rate from IT enabled change initiatives. It also helps to recognize IT
as a delivering path for generating consistent and demonstrable business value for an
organization.
BRM for Whom?
BRM approach is a practical solutions which has already been tested widely in Canada, the
US, Europe, Australia and New Zealand. It covers the wide variety of organizations including
telecommunications, energy companies, banks, insurance companies and manufacturers. In
short, BRM approach for organizations across the sector who drive IT enabled change
initiatives. It has been used to optimize benefits from business transformation challenges,
such as:

Understanding and realizing benefits clearly from large & expensive software
investments including SAP, web applications, and knowledge management initiatives

Understanding, managing and realizing benefits from business process re-engineering

Handling complex portfolio management projects

Giving a clear focus on potential outcomes that eventually guide change projects

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BRM design is aim for creating an organization-wide impact. It mainly creates a shared
vision among the stakeholders. For example:

Senior management gets a clear understanding of what business results are to be

achieved through a major IT investment

Middle management can clearly understand of the resources required to get these
results, and of their role in achieving this goal

All employees and work groups develop an understanding of how they will contribute
to results and how they will use new technologies to do their work in new ways

All the organizations regardless the sectors or regions need to integrate BRM
approach in their IT investment value realization practice to create an organizationwide business level impact

Fundamental process of BRM Approach

The cores of the BRM approach are three fundamental attitudes shifting of organizations
followed by an iterative process:
Three fundamental shifting:

Attitude shifting to business program management rather than stand-alone IT project

management concept

Attitude shifting to structured portfolio management rather than keeping free-for-all

competition among projects

Attitude shifting to full cycle governance instead of traditional project management

cycles

The iterative process:

Start foundation selectively: choose a particular business unit and split initiatives

Build business co-ownership:

Involve senior management in IT selection process
Integrate input and support of corporate finance

Monitor benefit performance: review performance on period basis and adjust

measurement parameter if needed. It will prevent of getting it stale or obsolete

Create accountability for fund management and IT results management: concern

matter is if the business doesnt want incremental benefits in operational plan

Select right BRM metrics:

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 Select few manageable performance measures rather than too many that may
dilute the focus
Find out what results truly matter

Take a break for yourself and others: Its better not to use same measurement level
and process in all initiatives, customize it

Select a business performance language:

Select the metrics that are business goal oriented and have a meaning to
stakeholders
Reflect stakeholders interests in metrics
Be sure not to use same benefit parameter in entire IT landscape (e.g.,
infrastructure spend is different from new business applications)

Monitor benefits of BRM practice itself: it will help to indentify key improvement
areas such as ROIC (return on invested capital), variance between estimated & actual
cost

Frameworks for BRM

The bottom line of BRM practices are not cookie-cutter, it is a specific set of processes,
methodologies, toolkits, and most of all, a journey. Successful one is very context-driven and
take into account the organization's culture and management style. It does not wait to make
every thought perfect, in reality it wont ever be. It integrates such capabilities with
organizations DNA rather than just having a crisis approach.

Management culture, experience, technological expertise and size of the organization

determine the perceived business benefits from IT project. Organization needs to be aware of
what to expect, and how and when to harness those benefits from their projects. To gain full
potential, a widely suggested approach is the targeted approach rather than generic approach
because in most case benefits are being distributed throughout the value chain of the
organization. One or more benefit frameworks such as strategic, organizational, and
technological framework can do this. The use of these three frameworks can help
organization to realize and prioritize the benefit at each particular level. At the same time, it
enables organization to increase the benefit discovery scope even after project completion; it
also can help to extend the scope of obtaining unexpected benefits.

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Shang & Seddon recommended a new benefit framework focusing five different dimensions
that can be the main driver for measuring investment in IT projects:

Dimensions

Operational

Managerial

Strategic

IT infrastructure

Organizational

Sub Dimensions

Cost Reduction

Cycle time reduction

Productivity improvement

Quality and customer service improvement

Better resource management

Improve decision making and planning

Performance improvement

Support business growth

Support for business alliance

Building business innovations

Building cost leadership

Generating product differentiation

Building external linkage

Building business flexibility for current and future changes

IT cost reduction

Increased IT infrastructure capability

Changing work pattern

Facilitating organizational learning

Empowerment

Building common vision

Table 2: Benefit frameworks (Sources: Shang and Seddon, 2002)

The given framework works like an indicator for finding the scope of benefits in order to
develop more relevant and accurate benefit charter. It also highlights the probable tangible
and intangible benefits for organization.

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BRM Models
As just described, benefit framework creates a platform for benefit identification but to
manage the realization of desired benefits it is important to have a structured approach. A
BRM model contributes to the effective IT management that encompasses a series of
activities and techniques based on the concept of total quality management, in fact, it is a
descriptive approach for handling and obtaining perceived business benefits.
Cranfield BRM process model
Cranfield School of Management in association with few industry experts of UK-based
organizations developed the Cranfield process model of BRM. The underlying purpose of the
model is to identify the benefit of projects, to allocate responsibilities in proper way, and to
recommend tools and techniques in managing the projects in order to analyze the successes
and failures of IT project with proper identification.

Figure 3: Cranfield process model of benefit management (Source: Ward and Peppard, 2002)

The model describes six iterative processes beginning with aligning business and IT
objectives together by analyzing probable benefits that technology can bring. It aims to help
constant checking of gaps between expected and delivered benefits at every stage and also
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helps to take required changes in action plan if needed. Users and other stakeholders
perspective are also taken into consideration in stage four enabling organization to continue
with further change management process.
Active Benefit Realization (ABR) Model
The ABR model for IT project designed by Remenyi & Sherwood-Smith aims to increase
business benefit delivery from information system as well as reduce waste & time to market
of appropriate information systems to support the business.

Validation
Decision to
proceed

Initialization
of Project

Determination of
Business opportunity
.Validated
opportunity
Determination of
Primary stakeholder
.Opportunity/solution
Lexicon

2
2
Production
of
Picture

Agreement
to proceed

5
2

4
2

3
2

System
development

Evidence
collection

6
2
Review
&
Learning

Formative Review
Variance
Determine trade-off

Development of:

BP

FP

PP
Involving
primary
Stakeholders

7
2
Development
Of updated
Pictures

Future/
Maintenance
Project

Abandon
Project

Key

Flow of process from activity, to activity

involves
Involves ie.

Installatio
n phase

Determination of
business opportunity
etc.

Figure 4: Active benefit realization approach (Source: Remenyi & Sherwood-Smith, 2002)

The ABR program includes seven major activities enabling organization to record all
activities throughout the lifecycle of a project starting from the very beginning of the project
implementation and to make informed decision about the implementation of the project by
making a correlation between delivery capacity and required action for corporate strategy
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with a solid consideration of financial impact on organization. It helps organization to check

the project performance continually so that the project can be terminated before reaching to
worst situation.

This model also emphasizes active participation of stakeholders in

evaluation process and enables them to realize business benefits.

Project Appraisal Method (PAM) BRM Model
PAM is another set of tools having three main dimensions of evaluation of IT investment
project, as follows:

Financial cost benefit analysis

Risk assessment and risk management

Strategic and intangible benefit appraisal

Three main outcomes of this approach are a financial model of the cost & benefit, a risk
management plan and a benefit profile incorporated into an IT project development lifecycle.
The financial model enables and encourages sensitivity analysis of investment project by
calculating measures such as the project payback period, the internal rate of return, and the
net present value. The risk management plan helps to estimate the probability of risk and to
calculate their potential impact by identifying main risk based on the feedback of users or
stakeholders. The benefit delivery plan highlights the intangible benefits compared to main
organizational objective after assessing the initial business process.
The DMR model for BRM
Its a product of DMR consulting group designed to address the issues of IT benefit
realization and management suggesting that business process may have to undergo a series of
iterative changes and actions. Unless organizations are not putting best efforts to retrieve
expected business benefits the greater value from IT investment project cannot be obtained.
The

challenge

goes

to

IT

manager combining on time

action

and budget requirement.

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Figure 5: DMRs benefit realization

approach (source: Thorp, 2001)

The main aspects of DMRs BR approach are as follows:

In order to link all IT projects with business objectives it is necessary to group all
projects under one umbrella called business program management

Outcomes
While grouping deferent projects, probable series of changes in process should be
managed proactively rather than considered as an implementation problem

It focuses on managing individual project in single portfolio to ensure its contribution

Initiatives
to strategic goal
The result sought: to achieve the ultimate benefits it is necessary to
sort out intermediate outcomes in the chain

One or more results contributed by actions

Assumptions

Contributions

The roles played by elements in the Result Chain, either initiatives or

intermediate outcomes, in contributing to other initiatives or
outcomes.

Assumption for perceived outcomes or initiatives. Need to consider

risks that may act as hindrances.

Further, a full cycle business governance approach is emphasized to manage each

project, program and portfolio in order to obtain business benefit from each one of
these
Figure 6: The core element of the DMR result chain (source: Thorp, 1999, 2001)

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The most challenging part of the implementation of DMR approach is to implement a full
fledge business program which is different from technology project. Its a combination of
various projects and involves people in each project. Therefore, it is necessary to establish a
relationship between each project and people who are involved. Cultivating a different
mindset of taking technology change as an organizational change is another challenge. To
address this issue DMR developed a result chain by utilizing four main elements- outcomes,
initiatives, contributions and assumptions (figure 6). A business program developed by using
these core elements provides a guideline for manager to locate benefits and encourages them
to proactively think in different ways of obtaining benefits and deciding whether they are
doing right things in right way.

Chapter 3: BRM Practice in Different Arena

ERP Implementation and BRM
According to Panorama survey result, per year $6.2 million is the average cost for companies
implementing on-premise ERP packages and average business benefits realization ration is
37.2%. Those represent a complete frustrating figure of benefit realization. On an average,
companies can only achieve 37.2% of benefits after implementation. Image your company
invests $6.2 million into your ERP project, would you be happy if you only achieve 37.2% of
the benefits you expected?

An ERP cost includes software, service and maintenance costs. In addition, 20% software
license fee is added. Based on these assumptions Panorama says, when we consider an
average cost of $6.2 million, an average payback period of 2.7 years, and average benefits
realization of 37.2%, the model shows that the benefit loss from the ERP implementation is
$4.3 million. Additionally, it takes 2.7 years to recover these costs while it should have been
only 10 months.

A well-defined ERP BRM program is absent in practice. It is needed to give a clear

perspective of key benefits that could be the potential outcome of new ERP implementation
program. Usually most ERP consultants and software vendors avoid this issue because of
their ignorance.

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A recent survey by Forrester Research reported that, North American and European small &
medium businesses (SMBs) set cost reduction and recovery from the economic downturn
their top business goals. Similarly, across the world large organizations are also focusing on
cost minimization.

In 2010, another research on SMB Software and Emerging Trends,

Forrester Research identified cost reduction would be a top priority for future business
growth, mostly would be achieved by shortening the business process execution speed such
as order-to-cash process time reduction. To do it effectively with ERP program
implementation, an organization need to asses possible benefits effectively before taking the
project on-board:

First need to sort out the answer of three Ws :

Where are the business benefits?
What about the people and localization?
What is the training?

Analyze Bermuda Triangle of ERP implementation:

High implementation cost and risk
Long implementation duration
Low business benefits and return on investment

After that need to address the following issues in designing the implementation
program:
ERP software best practices and pre-configured solutions do not solve all of the
challenges of ERP

A formal team is critical to ERP success

Never just think ERP system are misaligned means softwares fault, it could be
benefit realization problem

Dont need to implement ERP all at once

Integrate ERP implementation program with BRM approach before implementation

starts

Telecom Project Value Optimization

These days one of the key challenges facing every company is to trim telecom budgets
without compromising service or infrastructure. Worldwide organizations on an average
spend 20% of IT budget in telecommunication carrier services. For most cases the

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telecommunication support units is not only expensive but also complex and labor-intensive.
Thus it often produce inaccurate bill. No other alternative except reducing cost.

On an average, most enterprises can reduce carrier expenditures 10% to 20% by

implementing a proactive Accenture Telecom Expense Management solution, basically BRM
solution that continually seeks to ensure cost compliance and network optimization. The
Recommended Accenture approach is:
Diagnostic: The diagnostic phase quickly defines the benefit program and determines the
potential savings opportunities. The concerned areas are billing, inventory audit, contract
negotiation, inventory optimization and the procure-to-pay process model development.
Transformation: At this stage, clients get immediate financial benefit and simultaneously
approach builds a solid foundation to manage telecom infrastructure on an ongoing basis. The
four focused value levers of this stage are audit services, contract services, optimization &
network services, and process services.
BRM: It is also called ongoing management phase. The stage tracks perceived benefits and
keep the focus on Telecom Expense Management strategy outlined during previous two
stages. An in-sourced application service provider (ASP) or business process outsourcing
model could leverage it.
Institutional Innovation (Education Sector)
The education sector is not even beyond the IT innovation platform. Emergence of web 2
technologies accelerated institutional innovation for education. Modular e-Administration of
Teaching (MEAoT), e-Assessment in Higher Education (EASiHE) and Enhancing Lectures
Through Automated Capture (ELTAC), Distance Learning are few examples of institutional
innovation blessed by technology. Worlds top class universities including Oxford have
invented & implemented different IT projects to their day-to-day work. Again, a huge cost is
involved. Managing and embedding change are still a significant concern of many projects.
They are taking a variety of approaches on continue from the top-down to the bottom-up and
from the internally- to externally-facing. However, ensuring sustainability, realizing benefit is
still a major concern.
JISC Institutional Innovation Program designed a simple framework as a foundation of
benefit realization. The rigorous process analyze can reduce cost by at least 10% and can
ensure institution-wide benefit impact.

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Figure 7: JISC institutional innovation program framework

There are three broad parts of the approach:

Part 1: WHY addresses the following issues:
Political institutional strategy and policy
Pragmatic institutional ICT concerns
Programmatic intended outcomes of the JISC Institutional Innovation Program
Part 2: What includes innovation themes:
WHAT is changing?
What is really new?
What are the consequences of responding to the strategic, pragmatic and
programmatic drivers of change?
Part 3: How includes Techno-cultural enablers:
HOW, at the micro level, are projects doing what they are doing?
What are the specific tools, standards, processes, being used? PHP or Java? Google
Apps or Microsoft SharePoint?
Finally integrate with BRM models at each stage of implementation to derive best business
benefits.
Public Sector
According to Stephen Covey, Putting First Things First is the best winning strategy.
Without a solid focus like Covey, it is more likely to fall in activity trap such as work harder
& harder towards the wrong wall. Steve Jenner (the driving force behind the development of
UK Criminal Justice System IT approach to Portfolio and Benefits Management that awarded
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"UK Best Practice" in 2007) was described by the UK Government as "the Rottweiler of
benefits management for public sector. Managing the Portfolio, Realizing the Benefits was
his key.
With nearly 100 billion of yearly investment, BRM becomes a key priority for all public
sector projects. A public sector project is much different from private or institutional value
driver. The stakeholder profiles are wider. Social return is an important factor. A planned
strategic approach is very much needed to harness full benefits:

Figure 8: Public sector project management cycle

It starts with writing a strategy reflecting the following concern:

WHY making this investment in change, what you are trying to achieve?

HOW you will demonstrate that you are on track, or discover that you arent?

What will be measured?

WHEN you need to start do you need to prepare well in advance, and when do you
expect to see results?

WHERE will responsibility for benefits realization, for benefits measurement, reside,
and how will they link together?

WHO will take the responsibility?

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The BRM is integrated in the above-mentioned diagnosis stage (typically equivalent to

project initiation). It documents how the project aligns to the strategic objectives of the
organization and how the benefits realization processes would be used.
Developed Economy
The ratio of using BRM approach in higher in developed parts of the world comparing
developing economy. It is being widely used in US, UK, Australia and New Zealand. The
economic maturity made the organization bound to look beyond traditional project
management approach of just ensuring financial return. However, most surprising factor is
that the value realization ratio is still 1% or less. 2/3 rd of the organizations cannot derive
expected benefits simply lack of a formal BRM approach. On the other hand, in UK yearly
average IT projects savings is 3 billion only for effective use of BRM approach. However,
success is not impressive, lots of room left to work with BRM from organizational strategic
point of view as well as project implementation practice.
Emerging Economy
Most of research of BRM has been carried out in developed countries such as US, UK and
Australia. The emerging economy is unseen until today in terms of benefit realization. Unlike
the developed economy, emerging country spends only 4.2% in IT projects of their total
budget, which is very low. Their return measurement approach is completely traditional in
most cases. However, an emerging trend of B2B E-commerce and SMB massive growth is
seen in emerging economy especially in Asian region. A formal BRM is very much needed to
align their IT strategy with business strategy in order to get full business benefit.

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Chapter 4: BRM Case Study

Vodaphone Customer Intelligence Case
In 2004, Enterprise Business Unit (EBU) of Vodaphone UK in coordination with Capgemini,
a consulting firm, launched a 3 years project named Project-21 targeting to deliver better
experience for customers and employees alike. At mid stage of Project 21, Kyle Whitehill,
Director - EBU, Vodafone said, Were probably going to deliver about 15million worth of
benefits, but more importantly, our customer and employee satisfaction scores have improved
and thats absolutely fantastic.

Capgemini helped Vodafone to achieve greatly improved customer experience and

operational excellence with potential savings in millions, eliminated customer impacting and
internal points of pain. Capgeminis role was to provide project management and
consulting support, central to which were a number of founding principles keeping the BRM
approach in project planning to implementation stage:

Collaboration

Data driven approach

Tangible benefits realization

Sustainable change

Collaboration: Three elements set the tone for collaboration. Firstly, Capgemini established a
joint team with clear roles and responsibilities, comprising Implementation Managers and
Six-Sigma Black Belts from Vodafone supported by experienced Project and Change
Managers from Capgemini. Capgemini consultants worked closely with Implementation
Managers and Black Belts, taking on full project management responsibility and managing
the change initiative, ensuring that the business was ready for changes to be implemented. In
addition, Capgemini consultants provided training, coaching, facilitation and support along
the way.
Secondly adopted a collaborative approach to secure strong executive sponsorship. Key
executives from Vodafone were engaged as Process Owners, both to demonstrate
commitment to the project and to ensure quick and effective resolution of issues. Process
owners were responsible for ensuring consistency across the end-to-end process, signing off
all implementation plans and resolving policy issues.

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Lastly, the wider organization was involved in process design and implementation. Close
collaboration with stakeholders across EBU helped to establish a shared understanding of
issues, achieve consensus and create buy-in and ownership of the changes.
Therefore, Vodafone enjoyed dedication, professionalism and strong commitment to change
from EBU employees.
Data Driven Approach: Capgemini aligned their methodology to the Six Sigma approach
adopted by Vodafone, allowing the project team to work with familiar approaches. Key to
success was the focus on capturing the voice of the customer as well as that of the employee,
and adopting a data driven approach to collect, measure, analyze and act on data to
understand the root causes of issues rather than to deal simply with the symptoms. Some
major themes emerged in areas like communication, billing, delivery and query resolution,
with over 40 points of pain identified. The team drew up a framework to prioritize these
points of pain in order to focus on those offering best value. Initiatives were classified as
either Gold, Silver or Bronze to reflect their relative importance. Some of the key
initiatives centered on improving customer-facing processes such as:

Handset replacement process

Account Set-Up process (in particular, reducing the number of errors on

customer first invoices)

Sustainable Change: Beyond improving processes, the goal of Project 21 was to develop and
embed new capabilities and improve ways of working within the EBU. Measurement,
analysis and control systems were put in place to monitor ongoing performance after projects
had been implemented.
Tangible Benefits Realization: Kyle Whitehill, was delighted with what he felt was a
tremendous return on investment. Benefits realization was core to Capgeminis approach.
A system to track benefits was also introduced to ensure that all initiatives had a compelling
case for investment and were progressed and tracked. Clear performance indicators to
measure the success of the initiatives were established, and any identified savings were
signed off by stakeholders and embedded into budgets. The benefits tracking system also
ensured that any tangible results and quick wins along the way were communicated internally.
Project Result:

The Handset Replacement improvement program reduced repeat call volumes by

between 15 20 %, and delivered 100 % quality checking on all devices

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The Account Set-Up initiative reduced the processing time per connection by 40
minutes and significantly reduced errors when setting up Accounts

Delivered quantified financial benefits of 15 million over three years

Delivered increases in both EBUs employee and customer satisfaction scores. This in
turn is expected to translate into stronger, more profitable customer relationships

Furthermore, the project instilled a culture of continuous process improvement

Vodaphone PRINCE2 Case

In 2003, Vodaphone UK Telecom System (TS) Department decided to achieve PRINCE2
level 3 project management standards to set themselves as a benchmark against emerging
standard. They took it as 12 months benefit achieving business case. Vodaphone designed the
project to realize the following benefits:

Potential per annum capex savings target was 16M

Improve project management capability to deliver better projects, more efficiently

Make TS the centre of excellence for project management in Vodaphone

The project planning was integrated with BRM approach and were broken down into five
stages including competitive tendering process:
Initiation stage: The purpose of the stage was to

Gather information to present a valid PID

Win the competitive tender

Investigation stage: The stage was set for

Develop a set for level 3 compliant processes

Develop appropriate training materials for projects

Develop material for project managers

Develop indicator & other measures for Vodaphone TS department

Set up different focused workshops to define required skill & competence

Training Stage: This stage was targeted to

Train up the individual taking to different project roles

Establish the new support process enabling staff to use new process framework

Encourage every project manager to take PRINCE2 foundation exam

Roll out stage:

Proactive support to all project staff to implement new process framework

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Support Vodaphone TS in developing new project governance infrastructure

Benefit Realization Achievement:

All the objectives were successfully achieved within the timeline of one year
including per annum 16M capex savings.

Achieved PRINCE2 Level 3 standard

A total of 43 products were successfully delivered

A total of 113 projects, issues and other events were logged during the delivery of the
projects

Project management capability was increased

A dedicated Program Management Office was created to ensure benefit realization

SIGMA BRM Case

Sigma has a unique approach to achieve maximum business benefits from change,
particularly change involving technology. Their BRM approach provides a business solution
to the problem of managing change in today's world. It can be viewed at four levels:

Purpose: sigma's approach involves eliciting and shaping purpose with stakeholders.

Process: sigma incorporate key decision points with continuous managed process to
maximize business benefits. Sigma's four phased process maintains stakeholder
commitment whilst facilitating the termination of low value or high risk projects in
the early stages of their life-cycle.

Practices: Within each step of the process, there are many potential pitfalls, which can
be avoided with good practices. sigma's approach includes a set of 'best practices'
which have been determined and refined from considerable consulting experience and
include many proven and practical tools and techniques.

People: Achieving success requires more than purpose, process and practices.
Utilizing these for a successful outcome is primarily a human process, not a technical
formula. Sigma's approach includes a strong focus on people issues and involves
effective partnership with stakeholders through facilitated workshops.

Their client testimonial says BRM consistently improves the delivered value of change. It
increased their success due to the following alignment:

Pervasive commitment towards positive change

Perfect alignment of systems, business processes and objectives

Identification and quantification of financial and non-financial benefits

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Clear accountability for process change and benefit delivery

Systematic tracking and realization of benefits

Fujitsu Case
According to Doug Whitfield, NFFS Benefits and Project Manager, Environment Agency,
UK, Benefits realization is now embedded in our culture, which means more people get
better warnings, faster, reducing flood damage to UK plc and loss of life. There are not many
jobs left that you can claim about. In the UK, Fujitsu ensured benefit realization massively
at the Environment Agency. In fact, Fujitsu is one of the first companies among world who
adopted BRM approach internally and externally for service solutions. Fujitsu applied BRM
solution to their outsource clients achieving almost 400 million of business benefits. For
their client it is a real wow factor. Their approach is outlined in their book The Information
Paradox and currently it is being used as a fundamental part of the Val IT initiative.

Fujitsu approach is more linked with business needs of the projects. They set a clear link up
between delivery and outcomes. They designed their approach in the following way:

A Benefits Roadmap, representing visually in the form a Results Chain diagram,

and

constructed

through

interviews,

workshops

and

analyzing

available

documentation

A clear Benefits Plan, explicitly capturing expected outcomes or benefits, their target
values and profiles over time, baseline values, a practical means of measurement, and
defining clear accountability for realization

A common understanding and commitment to the aims of an outsource, using the

Benefits Roadmap and Benefits Plan as communications aids and participation in
their development to cultivate buy-in

A Benefits Register management system, in which benefits are actively monitored and
reported for regular review and proactive management. Benefits Realization sits
alongside Portfolio Management and Strategic Governance. Value Governance
ensures maximum value from IT investment services

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Chapter 5: BRM Application Related Issue

Issues Related with the Adoption of BRM
Even though formal benefit realization techniques are available however sometimes,
organization thinks BRM is a complicated process, simply waste of time and resource
ignoring the long-term benefits. The situation regarding BRM is popular in US, UK and
Australia whereas for other parts of the world like Japan, China, South Korea, it is relatively
a new phenomenon. Few organizations practice some similar approaches of BRM such as
measuring IT effectiveness, identifying project, competitive advantage etc.

In fact, the main factors related with the adoption of BRM strategies in organization are with
awareness and organizations varied perception towards using particular model:

Management attitude towards IT, considering IT as technical issue

Failure to understand business benefits from IT project

Lack of benefit measurement and business benefit ownership

Organizations resistance to change

IT Managers Approach towards BRM

Generally, IT managers think that IT investment is a strategic decision for the organization
and it has a significant role in the organization. But unfortunately justifications of the IT
investment proposal are always being done by the business manager. Business management
is also doing the reviewing of the IT project. In most case, IT manager works as an
implementer of an already taken decision. Business management considers IT project from
the standpoint of cash return rather than considering its overall business value. They
implement it to improve the process efficiency and to satisfy information needs of the
organization.

On the other hand, IT mangers think that the derived perception need to change and it should
be considered as strategic decision & integral part of Business Process Re-engineering.
Therefore, it is important to adopt a constructive approach to determine the business value
from IT investment project. Also management process need to link up with business value to
IT. So its all about the perception of organization. Therefore, changes require to current
thinking process of the organization towards measuring IT project.
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Business Managers Approach towards BRM

Generally, business manager evaluate and review the IT investment project. They usually
think that IT takes a big portion of organizational budget. Therefore, it has to produce quick
cash return. Though they think that it has a significant contribution to improve the business
process however, it need to be justified from immediate cash return rather than counting
overall impact on business value. Therefore, the main bottleneck of implanting BRM model
belongs to the attitude towards using it. Integrating IT investment appraisal & justification
with overall business value measurement is often considered as wastage of time & energy. IT
is just for process improvement and to satisfy information needs of the organization. It is also
noticed that some of their current practices is also more or less similar with BRM model but
in a small scale.
Major Challenge: Aligning BRM with Corporate Strategy
The key factors of gaining success from IT investment are to have a clear business strategy &
model, and an information strategy that supports those. Thus, a major challenge for all
organizations falls into aligning IT strategy into corporate strategy. Several factors underlie
ineffective IT-business alignment, like:

Lack of awareness of non-financial evaluation techniques

Mismatch between IT and business perspective

Difficulties in defining role of IT and Information in organization

Lack of support from business management in handling IT task

As a result, sometimes IT manager oversell the IT project to organization that ultimately

bring lower return from investment. Sometimes unrealistic high expectations results lower
level of perceived benefits than those organizations that are associated with realistic benefits.
As a result at the end of the day business manager failed to gain expected benefits and start to
consider IT as a cost & utility center, and notice only when the machine doesnt work
properly.
Emerging Issue of EPMO (Enterprise Project Management office) and BRM
A research result of Business Improvement Architects shows, 57% of the organizations who
maintain project management offices (PMOs) had not embraced the direction of the PMO in
all levels of the organizations and 60% of the PMO heads mentioned full alignment among
their respective departments. These results clearly indicate that departmental PMOs are

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successful only in their boundary and therefore are unable to influence the organization as a
whole. In most cases, Project Management Offices are located only within a department in an
organization. Generally, these offices are relegated to the IT or Engineering department. They
face hurdle to make strategic align with entire organization because they are not set-up to do
so. This is because many PMOs started from a grass root approach initiated by an individual
or small group who saw the need to bring more control over projects or portfolios.

Todays complex business environment and failure rate of PMOs helped to move from a
grass-root approach into a more formal structure called Enterprise Project Management
Office (EPMO). EPMO create avenue to gain organization-wide strategic alignment and
projects align movement to the objectives of the organization. EPMO is organizationally
based and more likely to get executive support. In a word, the project management basis
should be on organizational strategy not departmental strategy.

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Chapter 6: Conclusion & Recommendation

Conclusion & Recommendation for Organization
The whole discussion and analysis gives a clear sense of current IT investment ROI, project
management scenario, best practice of project evaluation and emerging strategic concern. It is
evident that traditional project management practices are inapt to quantify business delivery
form IT investment and often resulting a project failure or overrun or inadequate return. It is
also noticeable that most of the organizations spend huge for IT project but still lacking a
formalized benefit realization approach linking with corporate strategy because they consider
IT as a tool to improve process efficiency. The current scenario gives a clear message to
every organization adopting a formalized BRM approach that can effectively align IT and
business strategy to ensure average 80% to 90% ROI from IT investment. Even though some
of their techniques are similar with BRM model such as periodic meeting, feedback, and
implementation review however it needs to be fully integrated from strategic viewpoint to
ensure enterprise wide business-level impact of change delivery.

Considering the situation, it is strongly recommended for the organization to use the
following organized approach:

Use of investment appraisal techniques prior to IT investment decision

Use of benefit delivery plan and track benefits periodically

Regular use of in-house model

Build awareness regarding BRM approach

Recommendation for KDM (Key Decision Maker)

Align IT with Corporate Strategy
Around 72% of the organizations do not effectively tie their IT investment with business
strategy and goals. This is the number one job for every KDM to collaborate IT strategy
effectively with business strategy. Generally, IT initiatives are influenced by two
interdependent factors - economic and human factors that also can lead to ineffective decision
on IT investment.
The economic factors encompass the financial situation of the organization and its ability to
invest in desired technology. On the other hand, human factor includes organizational culture,
managers & employees resistance to change, user groups competence to use a particular
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technology, false promise & unrealistic expectations, managerial attitude towards technology
& its management, and stakeholders knowledge, attitude, & experience. Every KDMs first
challenge is to address every issue properly and align with corporate strategy. Implementing
the following model will help realizing IT capability across a range of strategic and
operational activities of organizations:

Figure 9: The new IT alignment: IS capability and organizational performance (Source: Pappard & Ward, 2004)

The concept of IS capability of this model gives a sense of better alignment of IT throughout
the value chain of the entire organization. It will create an organization wide impact of
creating new business avenue, providing support, contributing to the business strategy and in
turn producing better organizational performance. This model cant guarantee the success of
evaluation of IT but to avoid the failure complication, organization need to monitor the IT
value chain closely and consistently by creating a paradox of IT productivity. To monitor &
manage the IT project effectively and to mitigate the potential risk, it is important to
understand the different categories of IT project and their role in every phase:

Figure 10: The Application Services Portfolio and IT Infrastructure (Source: Pappard, 2003)

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Commonly finance manager and others at the board level in an organization are responsible
for IT spending and to maximize productivity that eventually improve the financial
performance of the organization. However, collaboration between high-level business and IT
personnel can enable them to understand each others objective, problems and limitations.
This has to be done by KDM.
Link Current Practice with BRM
It is already clear that IT not only improves operational efficiency but also bring business
value to organization. The important point for every KDM is to connect IT with business
from holistic viewpoint; it is more like creating value throughout the entire value chain of the
organization. The main obstacle is awareness. Its not that organization has given lower status
to BRM rather they are not fully aware of potential benefits of implementing BRM. To derive
full benefits, KDM need to implement the following task of establishing a primary
connection of current IT practice with business:
Selection of
IT project
IT innovation
Evaluation
based on
derived benefits

Business value

Effort

Monitoring
benefits

Business Goal

Figure 11: Tasks need to accomplish in order to gain benefit from IT project

Along with it, KDMs task also lies in improving learning about BRM and other metrics in
the organization so that people can realize its effectiveness and side-by-side increase
awareness followed by use. The following conceptual diagram will help you understanding
the flow:

Figure 12: Issues of BRM

and its relation

Awareness

Knowledge
increase

Knowledge
increase
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Use

Increase

Effectiveness

Integrate BRM with Strategy Map

The main purpose of an organization is to derive maximum benefits from IT investment but
most of the time it failed due to absence of appropriate evaluation metrics. To ensure the
perceived business value, a KDM need to integrate BRM in organizations overall strategy.
To do it he/she need a clear path. Strategy map can be a process to create awareness for BRM.
It describes how an organization can build strategic themes based on growth & productivity
and how to describe & communicate it. In short, it gives a visual picture of whole
organization concisely. The fundamental of a strategy map includes six iterative processes
that are determining objective, determining dominant value proposition, key financial
strategies, key customer related strategies, key internal business process strategies, and key
learning & growth strategies. It mainly converts intangible assets into tangible outcomes.

Figure 13: A Strategy Map (source: Robert S. Kaplan and David P. Norton)

KDMs task is to indentify IT needs with every steps of strategy map and then set a link of
BRM strategic concern with every steps of strategy map. Create a ground of evaluating
holistic impact of IT in business through BRM. Strategy map will give a clear path to derive
value and BRM would be the execution path of value deriving process.
Adopt a BRM Model
A KDMs task is to help organization to avoid potential project failure and derive business
value from change initiatives. To ensure this, it is recommended for KDM to implement a
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formalized non-financial evaluation approach along with financial approach. Here choose and
implement any of BRM models discussed in chapter 2 but before implementation it is
important to give people a clear understanding of the position of IT strategy and business
strategy in an organizational framework. Full alignment starts from perfect positioning of
major strategic concerns in framework but already mentioned low awareness level is a major
obstacle for adapting BRM. Considering the limitations KDMs are recommended to use the
following model that would help to implement a full fledge BRM model:
Understanding and selecting
appropriate technology

External environment
Business + technology
Business Strategy
Internal Business environment

IT strategy

Should be an integral part of

business strategy
Need deeper understanding of
external environment

Business + technology
BR strategy

Collaboration of Business
and IT for business benefit

Figure 14: BRM strategy and positioning in organizational framework

Create EPMO (Enterprise Project Management Office)

We already know the importance of EMPO as new wings in todays complex business world
to ensure effective alignment of all IT change initiative with organizations corporate strategy.
The KDM can demonstrate a strong commitment to this EPMO by requiring all project teams
to adopt the process, tools and template of the EPMO. In SMBs, EPMO may oversee the
management of all strategically aligned projects whereas in large organizations, EMPO will
have departmentally based reporting directly to EPMO. It will align all corporate-based and
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departmentally based projects with the strategic plan that will help prioritizing projects and
determining resourcing issues.
The EPMO focus should be more like overseeing projects on weekly or monthly basis,
identify task requirement & resources, providing quantifiable and qualitative data on projects
and receiving continuous support from management. A well structured EPMO is
fundamentally very important for better functioning. If EPMO reports to senior management,
the likelihood of on time project decision increase. Side by side, it creates greater visibility &
acceptance of the EPMO to the rest of the organization. It is suggested to change the current
approach who currently reports to the functional manager rather than to EPMO. Changing
reporting line will reduce the hierarchy of the EPMO but the head must have the same
management level as the managers of the functional manager from which they will need to
draw staff for the project team. The EPMO structure could be looks like:

Figure 15: Suggested EPMO structure

Recommendation for Business Manager

Business managers are functionally mid-level managers and have very important role. Moor
house consulting says around 37% leaders believe their projects are delivering satisfactory
benefits whereas 5% mid-managers believe so. There is a communication gap between
leaders and mid-managers. A business manager has to make this functional alignment. On the
other hand, traditionally business managers have viewed IT as supporting tools but this is the
time to change their attitude since these days almost all the change initiatives are IT driven
and his/her role is very critical in BRM success. Business managers need to carry out lots of
functional task to make change initiatives successful:

Take responsibility for defining and realizing the perceived benefits to the team as
well as EPMO

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Realize and help in careful transition of all areas of the business affected by the
change program

Communicate top-down message clearly to the team

Provide on-ground delivery

Communicate potential business benefits with IT teams

Recommendation for IT Manager

In traditional structure, business manager views IT manager as just an implementer of already
taken decision but EPMO takes them beyond from the role of doer to a thinker. It incorporate
the voice of IT manager in strategic level. Thus, the projects get more non-financial benefits
deriving shape. Here IT manager can play an important role:

They can align non-financial justification with every project.

Helps leaders and business managers to better understand the potential impact of IT
change initiatives

Can help to identify resource requirements for projects implementations

Can identify the right person to carry out specific task

Can best set out the benefit timeline

Finally design best project feedback program

Recommendation for EPMO and Project Manager (PM)

Finally, the biggest role goes to EPMO and all PMs. EPMOs task is to ensure align projects
fully with corporate strategy and direction. The recommended tasks are:

Create a full functional structure

Reduce ladder gap in hierarchy

Engage senior management in planning & implementations stage

Address all potential business benefits and sale it to management & all functional
manager

Remove budget constraints by effective analysis

On-time project feedback collection and communication to management

Apply risk management and crisis management situation in approach

Ensure proper alignment among departments

Determine qualified and effective project managers

The projects manager should work closely with EPMO as well as teams
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