In this final part we define the projects, prioritize them and choose the one to start the process and write the POS for the chosen project.
Define the ECPM Project or Projects
Whether you use the ECPM Brainstorming Process or some type of Feasibility Study approach you should have generated a few alternatives, and it is time to explore them in more depth in your search for the best alternative. There are several variables that you might use to profile each alternative project. Here are some suggestions:
- Team size and skills
- Expected business value
Analyze the Alternative Projects
The analysis of alternative projects examines their business value. The objective is to prioritize them and select the best. There are several approaches to analyzing the financial aspects of a project. While the sponsor should perform this analysis, it is often done by a project manager. The approaches I have chosen are easily understood and give enough insight into the financials of the project at this early stage in its life span.
Some organizations require a preliminary financial analysis of the project before granting approval to perform the detailed planning. Although such analyses are very rough because not enough information is known about the project at this time, they will offer a tripwire for project-planning approval. In some instances, they also offer criteria for prioritizing all of the POS documents that senior management will be reviewing.
At one time, IBM required a financial analysis from the project manager as an attachment to the POS. At the time, they were my client and allocated 4 hours for the project manager to complete the financial analysis. Project managers are typically not professional financial analysts, and 4 hours is not much time. So, the resulting analysis will be cursory at best, but it does lend some information relevant to financial feasibility.
Following are types of financial analyses you may be asked to provide. Keep in mind that the project manager may not be a financial analyst, and requiring an in-depth financial analysis may be beyond their ability.
- Cost and Benefit Analysis
- Breakeven Analysis
- Return on Investment
- Cost-Benefit Ratio
For further details refer to (Wysocki, 2014a and Wysocki, 2014b).
Prioritize the Alternative Projects
The first tactical STEP in every portfolio management model involves prioritizing the projects that have been shown to be aligned with the portfolio strategy. Proposed projects are usually grouped into funding categories or aligned under Objectives, or under the Strategies that align under Objectives.
Each group defines a potential portfolio. When finished, each group will have a list of prioritized projects. Dozens of approaches could be used to establish that prioritization. Some are nonnumeric; others are numeric. Some approaches are very simple; others can be quite complex and involve multivariate analysis, goal programming, and other complex computer-based algorithms. My approach is to identify methods that can easily be implemented without any pre-requisite knowledge or experience, and which do not require a computer system for support, although sometimes a simple spreadsheet application can reduce the labor intensity of the process. This section describes the models commonly used for establishing priorities:
- Forced ranking
- Must-Do, Should-Do, Postpone
- Criteria weighting
- Paired comparisons
- Risk/benefit matrix
For details on each of these models see (Wysocki, 2014a and Wysocki, 2014b).
Select the Project To Be Proposed
STEP 1 ends with the selection of a project to take into STEP 2. Several prioritization lists may have been created for the potential projects identified in the affinity packages. The decision will be based on both quantitative and qualitative data. In the final analysis, these data are guidelines for a decision that is first a good business decision. It would be unusual if all prioritized lists have the same project as highest priority, but it has happened. It is in keeping with the ECPM Brainstorming Model if more than one project were proposed. Let the best project survive the approval StageGate.
The Business Case is the foundation and referent for all project decisions in ECPM Framework projects. It maintains alignment of the project to the expected business value validated for the project.
Project IDEATION Phase STEP 2: Elicit Requirements
Many authors will use the term “Gather” with respect to building the list of requirements. That suggests the requirements are just laying around and waiting to be picked up and added to the requirements bucket. In complex projects, nothing could be farther from the truth. The term “Elicit.” suggests that requirements must be discovered and drawn out for documentation and addition to the list.
Project management thought leaders are of like mind in that requirements are rarely complete during project definition. Beyond the complexity and uncertainty the project is affected by the changing internal environment and external market dynamics. Managing a complex project is of course complex by definition but the challenge is further increased due to incomplete requirements. The situation is not hopeless and there are mitigation strategies that are available in the ECPM Framework during the Project IDEATION Phase.
Project IDEATION Phase STEP 3: Write A Project Overview Statement
A Project Overview Statement (POS) is the first formal document that describes the project idea at a high-level and is used for general distribution. It is written in the language of the business so that anyone who has the occasion to read it, will understand it. No “techie talk” allowed. It is only one page, so there isn’t an opportunity to say much other than a few basic pieces of information.
Definition of the Project Overview Statement
The POS is brief—one page is always sufficient. A POS basically summarizes the RBS. A POS template with an example is shown in Figure 2. The POS contains the following five sections::
- A statement of the problem or opportunity (reason for doing the project).
- A goal statement (what will generally be done).
- A statement of the objectives (general statements of how it might be done).
- The quantifiable business outcomes (what business value will be obtained).
- General comments on risks, assumptions, and obstacles to success.
Figure 2 A Typical POS Template with Example Data
After more than 50 years of managing projects, I can honestly say that I have always been able to write a one-page POS regardless of the scope of the project. Being able to write a one-page POS means that you really understand the project and can communicate it intelligently to senior management. Think of it as though it was the two minute elevator speech and you won’t go far astray. I’ve seen project initiation documents as large as 70 pages. I’m not sure who reads these, if anyone. If they do, do they really understand the project at the level of detail needed for granting approval to create the project plan? I doubt it! A document of that length may be of value to the development team but not to the sponsor and certainly not to the executive who will be approving it.
Seek StageGate #1 Approval
StageGate #1 is the senior management approval to proceed to the Project SET-UP Phase. Along with this approval is the release of the resources that will be needed for that phase. There is still a lot about this project that has to be defined before any version planning work can be done and one more approval STEP (StageGate #2) before the actual work of the project is authorized and budgeted by senior management.
There will be occasions when the POS is not approved. This usually means that the sponsor has not made a compelling argument for the business viability of their intended approach to the problem or opportunity. Despite the fact that the business need may be critical, the risk of failure is weighed against the expected business value of the solution. Expected business value may not justify the cost of the project. It does not mean that the project is not important to the executives, just that the approach chosen does not make good business sense. Some other approach is needed. The sponsoring business unit is invited to revise and resubmit the POS. Alternatively, the POS may be rejected without further consideration.
PUTTING IT ALL TOGETHER
In this article we described the ECPM Framework Brainstorming Process which spans STEP 1 of the IDEATION Phase. It is a robust process that will have application in several contexts.
In the IDEATION Phase we have brought an idea from a very informal statement of need or opportunity to a initial definition of one or more prioritized projects and finally to a choice of the initial project to be pursued. The IDEATION Phase is ended with a one page statement of that project that is forwarded for management approval. The IDEATION Phase includes the first three STEPs to defining a project and seeking the resources and authorization to proceed to the SET-UP Phase.
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