X1 Evaluate the generated Value X2 Optimize the Value generation strategy X3 Conduct a focused communication Y1 Evaluate portfolio stakeholder satisfaction Y2 Evaluate the ongoing programs and projects Y3 Plan improvements Y4 Conduct a focused communication Z1 Manage follow-up items Z2 Start, stop, or pause programs and projects Z3 Balance resources 6-Monthly Cycle Monthly Cycle Daily Cycle

X1 - Evaluate the generated Value

This management activity belongs to the 6-Monthly Cycle. The activities in this cycle define and revise the Value generation strategy.

What

This activity measures and records the actual benefits generated by ongoing and closed programs and standalone projects.

Why

Benefits are measurable improvements that are desirable for the organization. In this sense, benefits are subjective, meaning that something that would be considered a benefit for one organization may not be so for another. Therefore, benefits must be evaluated with a good understanding of the organization, in a holistic way, and in a high-level management layer such as portfolio management.

We should do this activity for the following reasons:

Remember that it’s natural to have a few programs and projects that don’t generate the expected Value. If they all work as planned, you’re probably losing opportunities by being too conservative. This is especially the case for internal projects.

Who

This activity is done by the sponsor of each program or project, under the supervision of the portfolio manager.

How

This evaluation starts for each program or standalone project when it’s finished or as soon as it starts generating benefits during the execution. It continues as long as there’s a notable potential or actual benefit (usually, at least for a few years). The results of the measurement will be stored in the Value Generation Matrix. The measurement must include expected and unexpected benefits across all categories of Value in the matrix.

Your program and project management systems may have activities equivalent to this one and form a common task (e.g., G01 in P3.express). However, when multiple programs or projects have been done on the same product or on a set of related products that impact each other’s performance, it’s best to evaluate their generated benefits together in an integrated way.

There must be one and only one unit of measurement for investments and benefits for all programs and projects in the portfolio, to make it possible to compare them. When there are multiple sources of Value, they must be converted and combined into a single unit. It can be a monetary amount adjusted for the value of money at a specific time, grams of gold, number of lives saved, etc. When such objective measurements are not practical or possible, abstract, relative, semi-subjective units can be used along with vote-based measurement and estimation techniques (similar to the Planning Poker®).

Note that when it’s possible and justifiable to measure something objectively, it would be the preferred option because of its higher reliability. However, when objective measurement is not practical, forcing it would be harmful for multiple reasons, including that its reliability would be lower than that of a well-formed subjective measure.

The benefits of some programs and projects are semi-continuous rather than one-time. Those can be converted into one-time Values by considering a pre-agreed time window.

You should make sure you’re not double-counting benefits. If multiple programs and projects enable a source of benefit, the resulting benefit should be divided among them based on their contributions.

Consider the following points in time for a program or project:

All measurements are comparisons. The measurement of benefits should not be a comparison between T2 and T0 because many other factors may have changed in that period. Instead, the benefits at T2 in the actual world should be compared to the benefits at T2 in a hypothetical world in which the program or project did not occur.

When the benefits of all items are measured, their Value can be calculated as follows:

Value = benefit ÷ investment

The Business Case of each program or project is helpful in evaluating its benefits. However, sponsors shouldn’t limit themselves to a mechanical evaluation based on the Business Case.



⊚ Download the manual: PDF (A4), PDF (mobile), plain text, ePub, ODT

⊚ Download the diagram


Thanks for sharing your opinion with us. Please note the following:

  • Please write it briefly and clearly.
  • Feel free to write in any language you prefer.
  • If you have multiple suggestions, please submit them separately.

If your suggestions inspire a positive improvement, we’d be happy to credit you as a contributor (if you provide us with your name and email address in this form).



To distinguish you from random bots on the Web, please answer the following question.


If you like, you can share your name and email address with us, in case we need to talk to you about your comment, or give you credit as a contributor: