PM 570 Week 5 Benefits Realization Plan Example

Dealers Kept, Engineering Saved, Incidents Avoided: A Benefits Realization Plan for a Refrigerant Conversion Program

[Student Name]

University of Phoenix

PM/570: Projects, Programs, and Portfolios

Week 5 Assignment

[Instructor Name]

[Date]

Red River Air Systems, its benefits, baselines and targets are composites written for a model paper.

Red River Air Systems, the imaginary rooftop air conditioner manufacturer in Wichita Falls used throughout PM 570, is about to start its refrigerant conversion program in earnest. The board approved the program as mandatory, but mandatory does not mean free of value questions. The board chair asked a fair question at the portfolio meeting: beyond staying legal, what will the company have to show for about $19 million over two years? This paper answers with a benefits realization plan.

Why a Plan Is Needed

Breese (2012) examined benefits realization management in UK public sector programs and concluded that, although it had become widely promoted, its practice often fell short of its promise, with benefits overstated in business cases and weakly tracked afterward. He cautioned against treating it as a cure for every failure while still seeing value in disciplined benefits work. Chih and Zwikael (2015) proposed a framework for formulating target benefits at the start of a project, arguing that benefits should be specific, measurable, owned and linked to organizational strategy before work begins. Red River's plan follows that advice and also takes Breese's warning seriously: it states benefits conservatively and plans reviews that continue after the program closes.

Target Benefits

B1: Retained sales through dealers. Without conversion, light commercial sales would fall to near zero for new installations. Target: retain at least 95 percent of the three-year average dealer sales volume in the first year after each line's compliance date.

B2: Engineering and certification savings from the common sensor platform. Target: at least $1.1 million saved against the cost of three separate designs, measured at program close.

B3: Zero serious safety incidents related to the new refrigerant in the plant or in the field in the first two years.

B4: Dealer readiness. Target: 90 percent of active dealer technicians trained before their region's first shipment.

B5: Warranty rate on converted units no higher than 2.5 percent of units in the first year, against a baseline of 2.3 percent on current units.

From Outputs to Benefits

Program outputs create capabilities, which enable outcomes, which produce benefits. The common sensor platform and three redesigned product lines give Red River the capability to sell compliant products; dealers selling and installing them is the outcome; retained sales (B1) is the benefit. The platform's reuse across three lines produces B2 directly. The plant safety upgrade and training create the capability to handle the refrigerant safely, with B3 as the benefit. The dealer curriculum produces trained technicians (B4), and together with robust design and service procedures, a stable warranty rate (B5).

Compliance is the floor; the plan asks what the company gains standing on it.

Measures, Baselines and Owners

B1: monthly dealer shipments by line against the three-year average of 11,400 units a year on the three-to-five-ton line and corresponding figures for the others; owner, vice president of sales; reviewed quarterly from the first compliant shipment.

B2: program cost records compared with the engineering estimate for three separate sensor designs, $1.9 million; owner, vice president of engineering; reviewed at program close.

B3: plant incident logs and field service reports coded for refrigerant events; owner, quality director; reviewed monthly.

B4: training records by dealer and region; owner, director of dealer development; reviewed monthly before each regional launch.

B5: warranty claims per unit shipped; owner, quality director; reviewed quarterly for two years.

Baselines for B1 and B5 are recorded now, from the last three years' data, before any change begins.

Attribution

Not every change in a measure will be caused by the program. Dealer sales could fall because of a construction slowdown or rise because a competitor stumbles; warranty claims could change with a new compressor supplier. The plan handles attribution in two ways. For B1, sales are compared with the regional market, using industry shipment data, so that the benefit is the company's share held rather than its raw volume. For B5, warranty claims are coded by cause, so that refrigerant-related failures are separated from unrelated ones. The program standard stresses that benefits should be monitored and their causes understood throughout and after the program (Project Management Institute, 2017), and attribution is part of understanding them.

Benefits Over Time

Benefits arrive on different schedules. B2 is realized at program close, when engineering costs are final. B4 must be achieved before each regional launch, so it is front-loaded. B1, B3 and B5 accumulate over the first two years of sales and field use. The benefits dashboard shows each benefit against its own timeline, so the board does not judge a two-year benefit after three months or forget a front-loaded one once it has passed.

Dis-Benefits

Two negative effects are expected. Unit cost will rise by about $160 per unit because of sensors, valves and controls; owner, vice president of operations, who will track cost per unit and pursue reductions with suppliers. Plant productivity will drop during the transition on each line, estimated at 8 percent for six weeks; owner, plant manager, tracking units per labor hour. Reporting dis-benefits alongside benefits gives the board an honest picture.

Governance and Reviews

The program board reviews benefits at each wave review and at program close. After closure, benefit owners report to the executive team quarterly for two years, using a one-page benefits dashboard. If a benefit falls short by more than 10 percent of its target at two consecutive reviews, its owner presents a recovery plan; for example, if dealer sales fall short in a region, sales and training will investigate whether the cause is pricing, technician readiness or competitor offers.

An Example of a Benefit Review

The first scheduled review shows how the plan works in practice. Three months after the first compliant shipments, the vice president of sales reports that dealer shipments of the three-to-five-ton line are at 92 percent of the three-year average, below the 95 percent target, while the regional market is down 4 percent. Measured as share held, the benefit is on track. The quality director reports two refrigerant-related warranty claims, both traced to one batch of sensor harnesses, and a supplier correction already in place. The board records both results and asks for the next review to include the harness fix's effect.

Sustaining Benefits

Benefits are sustained through operations. Safety training becomes part of annual plant training. Dealer training becomes part of the dealer certification program. The common sensor platform becomes the standard for future products, enforced through the engineering design review checklist.

Conclusion

The conversion program is mandatory, but its value can still be planned and proven. Five target benefits, each with a measure, baseline, target, date and owner, connect program outputs to business outcomes. Two dis-benefits are tracked openly. Reviews continue for two years after closure, and benefits are built into operations so they persist. This gives the board chair a concrete answer: the company will keep its dealers, save engineering money, avoid incidents and maintain quality, and it will be able to show whether it did.

References

Breese, R. (2012). Benefits realisation management: Panacea or false dawn? International Journal of Project Management, 30(3), 341-351. https://doi.org/10.1016/j.ijproman.2011.08.007

Chih, Y.-Y., & Zwikael, O. (2015). Project benefit management: A conceptual framework of target benefit formulation. International Journal of Project Management, 33(2), 352-362. https://doi.org/10.1016/j.ijproman.2014.06.002

Project Management Institute. (2017). The standard for program management (4th ed.). Project Management Institute.