Project Management Notes PDF

Project Management Program Management 3:00 - 7:30 | Friday Business Processes Managing Complex Projects Six Sigma Topic 1 - The Changing Landscape of Risk Manage...

Project Management Program Management 3:00 - 7:30 | Friday Business Processes Managing Complex Projects Six Sigma Topic 1 - The Changing Landscape of Risk Management Project Management Some companies have certification boards, which meet frequently and TOPIC 1 - THE CHANGING LANDSCAPE discuss what OF PROJECT MANAGEMENT certification programs would be of value Executive View of Project Management for their project managers. Certification Global Project Management programs that Project Management Methodologies and require specific knowledge of company Framework processes or company intellectual The Need for Effective Governance property may be Engagement Project Management internally developed and taught by the Customer Relations Management company’s own employees. Paperless Project Management 2 Project Management Maturity and Executives have come to the realization Metrics that there is a return on investment in Project Management Benchmarking and project Metrics management education. Therefore, 1 executives are now investing heavily in EXECUTIVE VIEW OF PROJECT customized project MANAGEMENT management training, especially in the Table 1.1 behavioral courses. Executive View of Project Management Other training programs that executives Project management is no longer feel would be beneficial for the future regarded as a part-time occupation or include: even a career Establishing metrics and key path position. It is now viewed as a performance indicators (KPIs) strategic competency needed for the Dashboard design survival of the firm. Managing complex projects Superior project management capability How to perform feasibility studies and can make the difference between winning cost–benefit analyses and losing a Business analysis contract. Business case development A project manager may desire to become How to validate and revalidate project certified in: assumptions Business Analyst Skills or Business How to establish project governance Management How to manage multiple stakeholders  How to design and implement ―fluid‖ or services on a global basis consider adaptive enterprise project management themselves to be business solution methodologies providers and How to develop coping skills and stress differentiate themselves from localized management skills companies according to the elements in GLOBAL PROJECT MANAGEMENT the Table 2.1 Every company in the world has complex below. projects that they would have liked to Those companies that have taken the undertake but were unable to because of time and effort to develop flexible project limitations such as: management methodologies and become No project portfolio management solution providers are companies that are function to evaluate projects competing A poor understanding of capacity in the global marketplace. Although these planning companies may have as part of their core A poor understanding of project business prioritization the providing of products and services, A lack of tools for determining project they may view their future as being a value global solution A lack of project management tools and provider for the management of complex software projects. A lack of sufficient resources Table 2.1 A lack of qualified resources Global versus Non-global Companies A lack of support for project For these companies, being good at management education project management is not enough; they A lack of a project management must excel methodology at project management. They must be A lack of knowledge in dealing with innovative in their processes to the point complexity that all A fear of failure processes and methodologies are highly A lack of understanding of metrics fluid and easily adaptable to a particular needed to track the project client. They 3 have an extensive library of tools to Because not every company has the support the project management capability to manage these complex processes. Most of the projects, they tools were created internally with ideas must look outside for suppliers of project discovered through captured lessons management services. Companies that learned and best provide these practices. PROJECT MANAGEMENT Can plan for better execution METHODOLOGIES AND FRAMEWORKS Can predict results more accurately Most companies today seem to recognize Improves customer relations during the need for one or more project project execution management Can adjust the project during execution methodologies but either create the to fit changing customer requirements wrong methodologies or misuse the Provides senior management with better methodologies that visibility of status have been created. Many times, Provides standardization in execution companies rush into the development or Captures best practices purchasing of a Rather than using policies and methodology without any understanding procedures, some methodologies are of the need for one other than the fact constructed as a that their set of forms, guidelines, templates, and competitors have a methodology. checklists that can and must be applied A methodology is a series of processes, to a specific activities, and tools that are part of a project or situation. specific It may not be possible to create a single discipline, such as project management, enterprise-wide methodology that can be and designed to accomplish a specific applied to each and every project. Some objective. When companies have been successful doing the products, services, or customers have this, but there similar requirements and do not require are still many companies that significant successfully maintain more than one customization, companies develop methodology. Unless the methodologies to provide some degree of project manager is capable of tailoring consistency in the the enterprise project management way that projects are managed. With methodology to these methodologies, the metrics, once his/her needs, more than one established, methodology may be necessary. usually remain the same for every 5 project. Deciding on what type of methodology is There are significant advantages to the not an easy task. There are many factors design and implementation of a good, to flexible consider such as: methodology: The overall company strategies—how Shorter project schedules competitive are we as a company? Reduces and/or provides better control The size of the project team and/or of costs scope to be managed Prevents unwanted scope changes The priority of the project  How critical the project is to the Organizations that do not possess either company of these two characteristics rely heavily How flexible the methodology and its upon components are methodologies constructed with rigid There are numerous other factors that policies and procedures, thus creating can influence the design of a significant methodology. Some paperwork requirements with of these factors include: accompanying cost increases, and Corporate strategy removing the flexibility that the Complexity and size of the projects in project manager needs to adapt the the portfolio methodology to the needs of a specific Management’s faith in project client. These rigid management 6 Development budget methodologies usually rely upon time and Number of life cycle phases cost as the only metrics and can make it Technology requirements nearly Customer requirements impossible to determine the real status of Training requirements and costs the project. Supporting tools and software costs Jason Charvat describes these two types Project management methodologies are as light methodologies and heavy created around the project management methodologies: maturity level of the company and the 1. Light Methodologies corporate culture. If the company is Lightweight projects have only a few reasonably mature in rules, practices, and documents. Projects project management and has a culture are designed and built on face to face that fosters cooperation, effective discussions, meetings, and the flow of communication, information to the clients. Light teamwork, and trust, then a highly methodologies are much less flexible methodology can be created documentation based upon guidelines, oriented, usually emphasizing a smaller forms, checklists, and templates. amount of documentation for the project. The more flexibility that is added into the 2. Heavy Methodologies methodology, the greater the need for a Heavy methodologies attempt to plan a family large part of a project in great detail over of metrics and KPIs. Project managers a long span of time. This works well until can pick and choose the parts of the things start changing, and the project methodology and managers inherently try to resist change. metrics that are appropriate for a Frameworks particular client. More and more companies today, the clients and stakeholders, we then especially those that wish to compete in input the requirements, business case, the global and accompanying marketplace as a business solution assumptions. The methodology then provider, are using frameworks rather guides us through the PMBOK ® Guide than methodologies. process groups of A framework is a basic conceptual initiation (I), planning (P), execution (E), structure that is used to address an issue, monitoring and controlling (M), and such as a closure (C). project. It includes a set of assumptions, The methodology also provides us with project-specific metrics, concepts, guidance in the identification of metrics, values, and KPIs, processes that provide the project and dashboard reporting techniques for a manager with a means for viewing what particular client. Some people believe is needed to satisfy a that, once the customer’s requirements. A framework is deliverables are provided to the client a skeletal support structure for building and project closure takes place, the the project’s project is completed. deliverables. However, more companies today are Frameworks focus on a series of adding, at the end of the life cycle phases processes that must be done on all of the projects. Each methodology, another life cycle phase, process is supported by a series of forms, entitled ―Customer Satisfaction guidelines, templates, checklists, and Management.‖ metrics that The purpose of this phase is to meet with can be applied to a particular client’s the client and the stakeholders and business needs. discuss Both methodologies and frameworks are what was learned on the project mechanisms by which we can obtain best regarding best practices, lessons learned, practices and lessons learned in the use metrics, and KPIs. of metrics and KPIs. The intent is to see what can be done 7 better for that client on future projects. Figure 1. 8 Figure 3.1 THE NEED FOR EFFECTIVE Generic Methodology GOVERNANCE Figure 3.1 illustrates the generic use of a Project governance is actually a methodology or framework. Once we framework by which decisions are made. identify Governance relates to decisions that define stakeholders and whether the project is expectations, accountability, for an internal or external client. responsibility, the granting of ENGAGEMENT PROJECT MANAGEMENT power, or the verifying of performance. With project management viewed as a Governance relates to consistent strategic competency today, it is natural management, cohesive policies, for processes, and companies that wish to compete in a decision-making rights for a given area of global marketplace to be strong believers responsibility. Governance enables in ―engagement efficient and project management‖ or ―engagement effective decision making to take place. selling.‖ Years ago, the sales force would Every project can have different sell a product governance, even if each project uses the or services to a client and then move on same to find another client. Today, the enterprise project management emphasis is on methodology. The governance function staying with the clients and looking for can operate as a additional work from the same clients. separate process or as part of project In a marital context, an engagement can management leadership. be viewed as the beginning of a lifelong Governance is not designed to replace partnership. The same holds true with project decision making but to prevent engagement project management. undesirable decisions from being made. Companies like IBM Effective governance must be supported and Hewlett-Packard no longer view by a good themselves as selling products or project management information system services. Instead, they (PMIS). The PMIS must have agreed upon 9 metrics and see themselves as business solution key performance indicators such that providers for their clients, and you informed decision making is possible cannot remain in rather than seat-of business as a business solution provider the-pants decision making. without having superior project Historically, governance was provided by management the project sponsor. Today, governance is capability. provided by a committee. The As part of engagement project membership of the committee can management, you must convince the change from project to project client that you have and industry to industry. The the project management capability to membership may also vary according to provide solutions to their business needs the number of on a repetitive basis. In exchange for this, you want the discover on our project. client to treat you as a strategic partner 10 rather than as Decades ago, the sales force (and just another contractor. This is shown in marketing) had very little knowledge Figure 4.1. about project Figure 4.1 management. The role of the sales force Engagement‖ Project Management was to win contracts, regardless of the Companies that wish to compete in a concessions global environment must have superior that had to be made. The project manager project then ―inherited‖ a project with an management capability. This capability underfunded budget must appear in the contractor’s response and an impossible schedule. to a request Today, sales and marketing must for proposal issued by the client. Clients understand project management and be today are demanding the following in able to sell it their proposal: to the client as part of engagement Show us the number of Project selling. The sales force must sell the Management Professionals (PMP) in your company’s project company management methodology or framework and identify which PMP will manage this and the accompanying best practices. contract if you are the winner through Sales and competitive bidding. marketing are now involved in project Show us that you have an enterprise management. project management methodology or Engagement project management framework, and that it has a history of benefits both the buyer and the seller, as providing repeated successes. shown in Show us that you are willing to Table 4.1 below. customize the framework or Table 4.1 methodology to fit the Before and after Engagement Project client’s environment. Management Show us the maturity level of project The benefits of engagement project management in your company and management are clear: identify Both the buyer and the seller save on which project management maturity significant procurement costs by dealing model you used to perform the with assessment. single-source or sole-source contracts Show us that you have a best practices without having to go through a library for project management and your formalized willingness to share this knowledge with bidding process for each project. us, as well as the best practices you  Because of the potential long-term Developing the right relationship with strategic partnership, the seller is the customers interested in the Maintaining customer retention lifetime value of the business solution This cannot be done entirely by the rather than just the value at the end of project manager. Some companies have the both project. engagement managers and project You can provide lifelong support to your managers. These two individuals must client as they try to develop value-driven work together to relationships with their clients. maintain customer satisfaction. Table 5.1 11 below shows the partial responsibilities The buyer will get access to many of the of each. project management tools used by the Table 5.1 seller. The corollary is also true. Engagement Manager versus Project There is a risk in hiring consultants to Manager manage your projects if they bring their 12 own PAPERLESS PROJECT MANAGEMENT methodology and accompanying metrics Making informed decisions requires that are not compatible to your business information. In the early years of project or your management, we relied heavily upon needs. You must make sure that the legacy systems for the information we business solution providers demonstrate needed. Over the that: past several decades, other information Their approach is designed to your systems have emerged as seen in Figure business model and strategy. 6.1 below. The metrics they bring with them fit Figure 6.1 your business model and strategy. Growth of Information Systems to You understand the metrics they are Support Project proposing. Project management information systems If necessary, they are willing to create (PMIS) evolved to provide information additional metrics that fit your needs. solely CUSTOMER RELATIONS MANAGEMENT for the project at hand. Later, enterprise Engagement project management is resource planning (ERP) systems and forcing project managers to become customer active relations management (CRM) systems participants in customer relations appeared that provided project management (CRM) activities. CRM management with activities focus on: sufficient information such that they Identifying the right customers could now make business as well as project based decisions. reporting should take place. Today, the amount of information that a Unfortunately, this placed restriction on company can generate is overwhelming, the project managers, and eventually the and all policies and procedures were replaced of this information will be stored in data with guidelines. Today, the focus is on or information warehouses. With pure dashboards. legacy systems 14 that tracked business metrics the PROJECT MANAGEMENT MATURITY information was reported mainly AND METRICS vertically up the All companies desire maturity and organizational hierarchy. Today, excellence in project management. project-based information can be Unfortunately, not reported everywhere all companies recognize that the time including organizations external to your frame can be shortened by performing company. strategic planning Having more information comes with a for project management maturity and price: more costly reporting and larger excellence. and more The simple use of project management, frequent reports. This is shown in Figure even for an extended period of time, does 6.2 below. As the cost of paperwork grew, not companies lead to excellence. Instead, it can result 13 in repeated mistakes and, what’s worse, began looking at the possibility of learning from paperless project management. This your own mistakes rather than the would necessitate mistakes of others. identification of only the critical Strategic planning for project information and presenting the management is unlike other forms of information using dashboards. strategic planning in Figure 6.2 that it is most often performed at the Growth of Information Systems to middle and lower levels of management. Support Project Management Executive Initially, reporting was done at the end of management is still involved, mostly in a each life cycle phase. Unfortunately, supporting role, and provides funding some together with customers would not see project status employee release time for the effort. until the end of phase gate review There are models that can be used to meetings. To solve assist in achieving excellence. One such this problem, created policy and model is procedure manuals are created that dictated how and when the Project Management Maturity Model Level 4 Benchmarking (PMMM), shown in Figure 7.1 below. Each This level contains the recognition that of the five process improvement is necessary to levels represents a different degree of maintain a competitive advantage. maturity in project management. Benchmarking should be performed on a Figure 7.1 continuous Project Management Maturity and basis. The company must decide who to Metrics benchmark against and what to 15 benchmark. Level 1 Common Processes Level 5 Continuous Improvement In this level, the organization recognizes In this level, the organization evaluates the importance of project management the information obtained through and the need for a good understanding of benchmarking and must then decides the basic knowledge on project whether or not this information will management, enhance the along with the accompanying language singular methodology. and terminology. Although these five levels are normally Level 2 Common Processes accomplished with forms, guidelines, In this level, the organization recognizes templates, that common processes need to be and checklists, the growth in metrics defined and developed such that the management has allowed us to further successes on one project can be repeated enhance PMMM by on other including in each level the necessity for projects. Also included in this level is the metrics. This is shown in Figure 7.1. recognition that project management can 16 be Metrics can serve as a sign of applied to and support other organizational maturity. The need for methodologies employed by the paperless project company. management will require that more Level 3 Singular Methodology emphasis be placed upon metrics In this level the organization recognizes management as part of the synergistic effect of combining all the project management maturity corporate methodologies and processes process. into a singular methodology, the center Maturity in project management allows of which companies to recognize that project is project management. The synergistic management effects also make process control easier is a strategic competency as shown in with a Figure 7.2 below. For companies that single methodology than with multiple promote their methodologies. project management capabilities to such as through the use of external clients, competency in project value-reflective metrics, gives you a management is sustainable competitive viewed as a sustained competitive advantage. advantage (SCA). Figure 7.4 In Figure 7.2 we showed that excellence in Non-sustainable Competitive project management is achieved when Advantages project management is seen as a strategic 18 competency and the company recognizes Unfortunately, competitive advantages that its are not always sustainable as can be seen project management capability has from become a competitive advantage. Figure 7.4. As you exploit your Figure 7.2 competitive advantage, the competitors Project Management Competitiveness counterattack to reduce However, ineffective metrics or eliminate your competitive advantage. management can increase the risks in Figure 7.5 maintaining a Sustainable Competitive sustained competitive advantage as Advantages shown in Figure 7.3 below. These risks Therefore, as illustrated in Figure 7.5, you will be covered in must have continuous improvement for detail in later chapters. the 17 competitive advantage to grow into a Figure 7.3 sustained competitive advantage. Metric Risks to Maintain a SCA Table 7.1 Having a sustained competitive Competitive Advantages from advantage in project management does Value-Reflective Metrics not come just 19 from being on time and on budget at the There is no point in wasting resources on end of each project. Rather, offering your value metrics unless the client clients understands something that your competitors cannot the metric and perceives the value that is do may help. being created. Therefore, client input But in project management, a true into the selection competitive advantage occurs when your of the attributes for the value metrics is efforts are essential. Table 7.1 shows some typical directly linked to the customers’ value-reflective perception of value, and whatever means metrics and the accompanying strategic you use to show this, competitive advantage. PROJECT MANAGEMENT BENCHMARKING AND METRICS One of the fastest ways to reach maturity specific best practices, usually with the and excellence in project management is aim of increasing some aspect of project through the use of benchmarking. management A benchmark is a measurement or performance. Benchmarking is often standard against which comparisons can treated as a continuous process in which be made. organizations Benchmarking is the process of continually seek to improve their comparing one’s business processes and practices. performance metrics For more than a decade, companies have to industry bests or best practices from been fascinated with the expression other industries. ―best Dimensions typically measured are practices.‖ Best practices are generally quality, time, and cost. In the process of those practices that have been proven to benchmarking, management identifies produce the best firms in their industry, or in 20 another industry superior results. But now, after a decade where similar processes exist, and or more of use, we are beginning to compares the results and processes of scrutinize the term those studied (the ―targets‖) to their own and realize that perhaps better company’s results and processes. expressions exist. In this way, they learn how well the When a company says that it has a best targets perform and, more importantly, practice, it really means that there is a the business technique, process, metric, method, or processes that explain why these firms activity that can be more effective at are successful. delivering an Best Practice versus Proven Practice outcome than any other approach and In project management, the terms ―best provides the company with the desired practice benchmarking‖ or ―process outcome with benchmarking,‖ in which organizations fewer problems and unforeseen evaluate various aspects of their complications. As a result, the company processes in relation ends up with the most to best practice companies’ processes, efficient and effective way of usually within a peer group defined for accomplishing a task based upon a the purposes of repeatable process that has comparison. been proven over time for a large number This then allows organizations to develop of people and/or projects. plans on how to make improvements or Once a best practice has been identified adapt and been proven to be effective, we normally integrate the best practice into our Because project management exists in project management processes so that it virtually every industry, benchmarking becomes a personnel should not make the mistake of standard way of doing business. looking only at their own industry. Therefore, after acceptance and proven 21 use of the idea, the 3. Identify organizations that are leaders better expression possibly should be a in these areas ―proven practice‖ rather than a best Look for the very best in any industry and practice. This leaves in any country. Consult customers, the door open for further improvements. suppliers, financial analysts, trade Benchmarking Methodologies associations, and magazines to determine There is no single benchmarking process which that has been universally adopted. The companies are worthy of study. wide Symposiums and conferences sponsored appeal and acceptance of benchmarking by the Project has led to the emergence of Management Institute provide excellent benchmarking opportunities to hear presentations from methodologies. The following is an companies that are doing things example of a typical benchmarking exceptionally well. methodology: 4. Visit the ―best practice‖ companies to 1. Identify problem areas identify leading edge practices Because benchmarking can be applied to Companies typically agree to mutually any business process or function, a exchange information beneficial to all range of research techniques may be parties in a benchmarking group and required. They include informal share the results within the group. conversations with 5. Implement new and improved business customers, employees, or suppliers; practice exploratory research techniques such as Take the leading edge practices and focus develop implementation plans that groups; and in-depth marketing research, include quantitative research, surveys, identification of specific opportunities, questionnaires, funding the project, and selling the ideas reengineering analysis, process mapping, to the quality control variance reports, financial organization for the purpose of gaining ratio demonstrated value from the analysis, or simply reviewing cycle times improvements. or other performance indicators. Benchmarking Costs 2. Identify others that have similar The three main types of costs in processes benchmarking are: 1. Visitation costs This includes hotel rooms, travel costs, best practices from one or more meals, a token gift, and lost labor time. benchmark firms. This is the most 2. Time costs common form of Members of the benchmarking team will benchmarking in project management. be investing time in researching Process benchmarking cannot be problems, finding exceptional companies successful to study, visits, and implementation. This if you do not fully understand your own will take them away from their regular processes. tasks for part of each day so additional 2. Metric benchmarking staff The process of comparing the different might be required. metrics that organizations are using for 22 continuous improvements. Time, cost, 3. Benchmarking database costs and quality are just three of the metrics Organizations that institutionalize that benchmarking into their daily procedures are being used. The intent is to identify find the core metrics needed for project it is useful to create and maintain a management. database or library of best practices. 3. Financial benchmarking The cost of benchmarking can Performing a financial analysis and substantially be reduced through utilizing comparing the results in an effort to the many assess internet resources that have sprung up your overall competitiveness and over the last few years. These aim to productivity. capture 4. Benchmarking from an investor benchmarks and best practices from perspective organizations, business sectors, and Extending the benchmarking universe to countries to make the also compare to peer companies that benchmarking process much quicker and can be considered alternative investment cheaper. opportunities from the perspective of an Types of Benchmarking investor. There are several types of benchmarking 23 studies: 5. Performance benchmarking 1. Process benchmarking Allows the initiator firm to assess their The initiating firm focuses its observation competitive position by comparing and investigation of project products and services with those of management and business processes target firms. with a goal of identifying and observing 6. Product benchmarking the The process of designing new products or upgrades to current ones. This process can sometimes involve reverse functions that can be practiced in the engineering, which is taking apart same or similar ways regardless of competitors products to find strengths industry. and weaknesses. Benchmarking Code-of-Conduct 7. Strategic benchmarking There are numerous problems that can This involves observing how others occur during benchmarking. Some compete. This type is usually not industry problems specific, meaning it is best to look at result from misunderstandings, whereas other industries. other problems could involve legal issues. 8. Functional benchmarking 1. Legality A company will focus its benchmarking Avoid any discussions that could be on a single function to improve the interpreted as illegal for you or your operation of that particular function. benchmarking partners. Complex functions such as human 2. Exchange resources, Be prepared to answer the same finance and accounting, and information questions you are asking. Letting and communication technology are partners unlikely review the questions in advance is to be directly comparable in cost and helpful. efficiency terms and may need to be 3. Confidentiality disaggregated into processes to make All information should be treated as valid comparison. proprietary information. You may wish to 9. Best-in-class benchmarking consider having everyone sign a This involves studying the leading nondisclosure agreement. competitor or the company that best 4. Use of Information carries There must be an agreement, preferably out a specific function. in writing, on how the information will 10. Internal benchmarking be used. A comparison of a business process to a 5. Contact similar process inside the Follow your partners’ protocols and organization. This is a quest for internal customs on who you are allowed to best practices. interface with. 24 25 11. Competitive benchmarking 6. Preparation This is a direct competitor-to-competitor Be fully prepared for partner interfacing comparison of a product, service, and exchanges of information. process or method. 7. Completion 12. Generic benchmarking Avoid making promises or commitments This approach broadly conceptualizes that cannot be kept. unrelated business processes or Benchmarking Failures There are benchmarking mistakes that Recognize that executives who are not can lead to benchmarking failures. Some familiar or supportive of benchmarking of will these mistakes include: always adopt the ―not invented here‖ Limiting benchmarking activities to just argument or ―this is the way we have your own industry always Benchmarking industry followers can done it.‖ provide just as much information as Successful benchmarking is ―doing,‖ not benchmarking industry leaders. ―knowing.‖ Not all results may be applicable to your Benchmarking allows you to learn from company, especially if organizational the mistakes of others rather than from cultural differences exist. your Failing to have a benchmarking plan and own mistakes. not knowing what you are looking for Because of the rate of change that takes Points to Remember place in project management, it is highly There are some critical points that must unlikely that the targets you benchmark be remembered when performing with will be leaders in all areas of project benchmarking: management. It is necessary to understand the culture Benchmarking can prevent surprises. and circumstances behind the numbers You must get these people to recognize to the need for change. This must be fully understand their meaning and use. accomplished with benchmarking The ―how‖ is just as important as the evidence rather than just claims or ―how opinions. much?‖ Change occurs quickly when the people In project management, changes can who are needed to change or make the occur quickly. It is important to set change are involved in the benchmarking frequencies studies. for the benchmarking studies, and each Implementing change requires a process studied may require different champion. Having a PMO is almost always frequencies. the right The more rigorous the benchmarking idea. process, the better the results. Regardless of how good you think your project management systems are, there is always room for improvement. Those who do not believe in continuous improvement soon become industry followers rather than leaders. 26