Author: J. LeRoy Ward

Step Up or Step Out of the Way in 2013

ward FeaturearticleFeb20Money’s tight. Resources are constrained. And clients’ expectations continue to rise. Yet, there’s more work than ever and the right projects need to get done faster. Welcome to 2013 and the world of project management—a world dominated by the need for better project leaders, faster development cycles, and project management offices (PMOs) that are adding value not cost! As we look at the year ahead, here are the trends shaping our industry. 

  1. Organizations will need stronger soft skills but will focus on investments in hard skills. The training focus will remain on hard skills, even though many executives and managers complain that their project managers lack leadership skills. Why the cognitive dissonance? Because most companies prefer to train their project managers in the specifics of “project” leadership rather than generic leadership training that is so commonplace. Organizations will seek out alternatives to develop leadership skills because waiting for the ideal program will only result in perpetuating the existing unsatisfactory situation.
  2. Agile implementation will be viewed in some organizations as a failure, but for the wrong reasons. Studies show that Agile methods can reduce costs, speed time to market, and improve quality; however, in 2013, many organizations will continue to fall short in realizing the promise of Agile. Why? Because their project professionals aren’t trained in Agile methods and their organizations are not culturally ready to embrace its principles. It’s not sufficient to train just a handful of Scrum masters. The Scrum “team” needs to know how to apply Agile practices. Providing training to only those who lead these efforts will undermine Agile adoption, resulting in failed implementations.
  3. Project management is not just for project managers anymore. For decades “project manager” was a role, not a title. Not anymore. We have project manager career paths and more than half a million became certified. While the professionalism of project management will continue, organizations need more project managers, and those will come from the rank and file in such units as HR, sales, and marketing. They have projects too, and they will require individuals outside of those who carry the PM title to perform the role of project manager. There are not enough project managers to go around and these groups have projects that need to get done.
  4. Large projects pose challenges that are tough to overcome. Size does matter, and when it comes to large projects, the impact and interplay of downsizing, complexity, and outsourcing are creating a level of difficulty many find hard to manage. Many of these projects require substantive components to be outsourced, yet many organizations struggle because they have lost the in-house expertise to monitor the level of quality being delivered. Contractors are calling the shots because they both design and develop/construct their own work. As a result, in 2013 we will see more organizations build up their in-house expertise to ensure their contractors are doing the job right.
  5. PMOs will focus on proving their worth. Gone are the days when just implementing a methodology and creating a project dashboard convinced corporate executives that the PMO was pulling its weight. More organizations are conducting PMO “audits” to identify areas where the PMO can provide greater value to the organization. PMO directors who understand that their roles involve not just delivering projects, but also contributing to the overall business performance, will identify key business metrics and measure themselves against those metrics to prove their worth.
  6. The U.S. government will upgrade its PM certification in the face of rising criticism. Having a certified project manager is mandatory for civilian agencies in order to fund major IT projects. However, existing policy that sets the minimum training hours to earn a PM certification has been interpreted by some as guidance only. Many note deteriorating quality in the PM training, causing some to question the quality of a U.S. government “certified” project manager. In 2013 we will see the feds bolster the quality of their PM certification.
  7. Project managers will become better at vendor management. Many organizations that outsource their projects complain they have “vendor management” problems. First, many of their issues have to do with how their contract requirements were written. Mandating that a contractor deliver against a set of confusing requirements is asking for trouble. Second, organizations often select the wrong contract type based on these requirements. And third, they assign people with the wrong skills to work with contractors. In 2013 smart organizations will assign more highly qualified professionals to write requirements and manage relationships.
  8. Continued poor project performance will result in more PMOs being terminated. ESI research shows that the average life span of the PMO is four years. That number is likely to drop if project performance continues to underwhelm executives. Poor project performance has its root causes in many areas. Blaming the PMO for poor project management is an easy way out, but it doesn’t solve the problem. The PMO is in the crosshairs; if project performance doesn’t improve PMO directors may be looking elsewhere for employment.
  9. Portfolio management will take on a greater role. Portfolio management turns strategy into reality. More companies are investing in IT and process improvement to get a better handle on all of the project-based investments. And, they are tweaking or overhauling their portfolio management approach to make sure it is the best it can be. This will require expertise in portfolio management. Will PMI develop a certification in Portfolio Management? We shall see.
  10. Organizations will adopt Agile to accelerate time to market but what they achieve may be a different story. Agile methods have the potential to boost performance in a variety of ways. However, the top benefit derived from adopting Agile (i.e., ability to manage changing priorities) is not the same top reason organizations adopt Agile in the first place; they do so to accelerate time to market. Should this cause an organization to rethink its use of Agile? Not at all. There’s still plenty of evidence Agile can do what its proponents claim it does.

Prove your worth, speed things up, and become a better leader. That’s what organizations are looking for in their PMs in 2013. The expectations are high. The work is challenging. And there’s plenty of opportunity to get ahead. Step up, or step out of the way. 2013 is waiting for you! 

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Top 10 Project Management Trends for 2011

The top 10 Global Project Management Trends for 2011 include such key themes as building the project manager’s (PM) influence, accelerating new leadership and communication skills, and increased use of informal learning approaches such as social media and experiential training. A global panel of consultants and senior executives assembled by ESI identified the trends.

Leadership Skills Will Be the PM’s Critical Success Factor – Leadership skills, such as critical thinking, crucial communication and organizational change management, will be strategically imperative project management competencies to master. In 2011’s project management landscape – featuring more complex projects and greater use of virtual teams – being on time and on budget will require not just a laser-like focus on the triple constraints, but on the requisite leadership skills necessary for an individual PM’s success. The challenge for organizations will be to clearly define what “leadership” means in the project and program management context. 

No Industry Will Be Spared from the War for PM Talent – Savvy talent management and retention strategies will be essential to ward off poaching in 2011. Although economic recovery has been uneven worldwide, PMs with the greatest mobility and experience will have the best opportunities for career growth through “overseas” assignments. In particular, India and China will continue to be plagued by a dearth of competent and experienced PMs to manage large and complex infrastructure and IT projects. Additionally, as mega-projects at the King Abdullah Economic City north of Jeddah and King Abdullah Financial District on the outskirts of Riyadh kick into high gear, more opportunities for work in the Middle East will become a reality.  

Agile Will Be Seen for What It Is…and Isn’t – Project management organizations embracing Agile software and product development approaches will continue to grow while being faced with the challenge of demonstrating ROI through Agile adoption. In addition, they will need to disabuse their stakeholders and executives of the expectations set by IT consultants, the media and the vendor community that Agile is the next “silver bullet.” Organizations that do it right – including selecting the right projects for Agile – will reap significant rewards. 

Competency Models Will Be Core to Managing Professional Development and Promotions for PMs – As project management gains greater acceptance as a discipline, the hiring, assignment, promotion and professional development of PMs will be based on comprehensive competency models. In order for these models to be effective, they must be company-specific. Competency models illuminate the behaviors required for a PM to be successful and take on larger and more complex projects. Accordingly, the CLO (or senior HR executive), business unit heads and the enterprise project management office (EPMO) need to work shoulder-to-shoulder to identify and codify organization-specific competencies, thereby building a framework for talent management success.

Experiential Learning Will Be More the Norm than the Exception – The professional development of PMs will increasingly focus on reality-based learning and on-the-job training, an approach certain organizations in Asia have taken for many years. Learning providers will be required to send PMs back to the job from such sessions with the ability to immediately apply what they learned to their current projects. Even the many universities that offer project management degrees will face the challenge of making their courses and programs relevant, practical and pragmatic based on participants’ real projects. The lecture mode is dead and any training provider or university who ignores it does so at its peril.

Informal Learning for PMs Will Gain Momentum – Organizations will continue to develop and exploit informal learning approaches such as communities of practice (CoP), various forms of social media, as well as coaching and mentoring. With millennials joining the workforce in greater numbers, we will witness more effective use of social learning technologies and approaches, such as wikis, blogs, videos, podcasts and other methods of communication. With four generations now in the workplace, it is not only the millennials who will benefit by such relatively new forms of learning. However, the great Zen kōan question of the day is, “If informal learning becomes formal, does it become formal learning?” If the answer is yes, do we search for more informal learning to formalize?

Project Sponsorship Will Become an Area of Focus in South Asia – The roles and responsibilities of the project sponsor will be a key focus in South Asia, especially in India and Bangladesh, as organizations try to accelerate their structured approach to project management. Such organizations are trying to avoid the experience of others in their industries around the world whose “spotty” record of success in project sponsorship has contributed in whole, or in part, to less than successful projects.

Outsourcing Will Remain a Risky Business – The continued growth of outsourcing will force organizations to pay more heed to its associated risks and conduct better due diligence. As a response, organizations will strengthen their risk management cultures and recognize the value of best practices in contract management. More than a euphemism, the word “sourcing” will replace the term outsourcing as it more accurately describes the resource allocation approach both internally and externally for many organizations.

PMs Will Team with “Change Partners” and Use Structured Methods to Facilitate Adoption – Projects initiate change and PMs are change agents. Yet, they have been ill-equipped to facilitate the type of change required to adopt the product or service the project delivers. In 2011, we will see more organizations developing and assigning “change partners,” also known as change management experts, to projects to assist in such adoption. Moreover, project teams will slowly, but steadily, increase their use of change management methods, which will be packaged as methodologies.

The PMP® Will Continue its “World Domination,” but Will No Longer Be Enough

 – With 400,000+ holders, the PMP® will continue to be the most popular project management credential in the world, outpacing every one of its rivals as the “credential of choice” among practitioners. While most organizations will continue to support their PMs in earning the credential, the value of proven experience and demonstrated competency will take on even more relevance beyond having the certification itself.

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Taking Your PMO to the Next Level

Four Steps to Value Improvement

In today’s economy, every company and organization is struggling to do more with less, and performance is paramount. This is true for public and private sector entities, as well as for non-profits. Which is why, in order to prevail in lean times, it’s essential to optimize every operation of your organization, especially the project management office (PMO). 

It should be readily apparent that no organization will succeed if its projects are not managed effectively—on time, within budget, and delivering stated business outcomes for clients, whether they are internal or external. Your PMO should be an integral component in your organization’s project management practice, and should be delivering results that are critical to business and mission success. Accordingly, a careful analysis of the “state of current practice” of your PMO is extremely valuable in identifying areas for improvement and in ensuring that you’re delivering the highest level of value expected. 

Our company’s professional experience indicates that increasing the value of the PMO is directly related to an organization’s ability to compete in its marketplace and deliver quality services and products to clients in a timely fashion. In short, your PMO has a direct link, and contribution, to your organization’s bottom line. This paper examines various aspects of the PMO, including key functions, characteristics and challenges, and showcases attributes of a successful PMO. A four-step plan is also provided to improve your PMO’s value to the organization at large.

Introduction

There is no “one-size-fits-all” PMO. Each is as unique and specific as the corporate culture it supports. However, for the sake of clarity, it’s worthwhile to define generally what a PMO is and what it does. 

According to the Dictionary of Project Management Terms, 3rd Edition, a project management office is an “organizational entity established to assist project managers throughout the organization in implementing project management principles, methodologies, tools, and techniques. In most implementations, the project management office is a support function and is not responsible for project execution. Its main objective is implementing effective project management practices throughout the organization.” (Ward, 349)

Not specifically stated, but rather implied in the definition, is the notion that the PMO is the instrument through which an organization successfully deploys project management. A PMO, like project management itself, is a means to an end, not the end itself; and, as such it is strategic in its purpose and objective. The “end” is whatever business outcome and results the organization has identified as being critical to its survival.

Where we have a “high-performing” PMO, the entire organization and its clients reap the rewards: Projects are delivered on-time, within budget, and meet stakeholder expectations and requirements. Keeping in mind that the primary role of the PMO is to provide the structure and expertise required to improve an organization’s project success rates, it’s useful to step back and review the key functions of the PMO.

Key Functions of the PMO

In 2005, Dr. Brian Hobbs, a well-known and respected researcher at the University of Quebec at Montreal, conducted a survey of 500 PMOs for a research initiative commissioned by the Project Management Institute (PMI®). The survey underscored the broad variation in activities and functions of each PMO participant. Of its many findings, the survey identified the top 10 most important functions of the PMO (as reported by the respondents), to include (Hobbs, 22):*

  • Reporting project status to upper management
  • Developing and implementing standard methodologies
  • Monitoring and controlling project performance
  • Developing project management competencies, including training
  • Implementing and operating a project management information system (PMIS)
  • Advising upper management
  • Coordinating among project and project managers
  • Developing and maintaining a project scoreboard
  • Promoting project management within the organization
  • Monitoring and controlling performance of the PMO

*Presented in ranking order of commonality as identified in Dr. Hobbs’ study. There were, in total, 27 functions performed by PMOs. Of interest, some of the more “strategic” functions, such as manage benefits, portfolio management and manage customer interfaces, were not included in the Top 10.

Given the survey results, how does your PMO compare? Do you have a good idea what functions your PMO generally performs?  Have you conducted an internal audit or survey of project managers and division heads, as well as senior executives, in order to assess the PMO from an organizational perspective?  If not, a brief internal survey designed to take the “pulse” of your organization regarding its PMO is a good first step. Remember, you can’t know where you’re going if you don’t know where you are.

Step 1—Conduct an Assessment of Your PMO

In order to improve upon anything, even your health, it’s necessary to conduct a baseline analysis to determine your current condition. This is also true with your PMO. How do others in the organization regard the PMO? Do they recognize its potential and its value? Is the PMO being under utilized? Does your PMO have executive support?

Key reasons to conduct an internal survey about your PMO:

  • Better business alignment with strategic goals
  • Improved functional users’ involvement
  • Increased awareness about the PMO and the value of the PMO
  • Improved communication with functional users

Let’s get started with a few representative questions that you might want to pose in the context of such an assessment:

  • Is your PMO involved in project selection and prioritization? 
  • What is your mandate over projects? Over project managers?
  • How would you characterize your PMO’s decision-making authority?
  • How does the organization perceive the value of your PMO?   
  • With respect to the functions of your PMO, which of the top 10 most typical PMO functions are applicable?
  • Do you anticipate a changing role or an increase/decrease in responsibilities for your PMO? How would those changes impact your organization?
  • How do you measure your PMO in terms of overall performance and value to your organization?
  • What business benefits can you attribute to the work of your PMO within the past year?
  • Enumerate the top five achievements your PMO has realized in the past six months.
  • What are your PMO’s greatest strengths? Weaknesses?

To be sure, there are many other questions that might be applicable to your particular organization, and the questions provided here can be augmented or tailored to fit your specific circumstances. Once you’ve gathered information and evaluated the results, prepare a report for senior management that includes recommendations for addressing interests/concerns voiced in the assessment. Be sure to highlight the “good news” or favorable findings. Also, take the time to keep the survey respondents informed, as feedback relative to these kinds of assessments is an important element of good communications. In lieu of creating your own report, and in order to ensure added credibility, you may instead decide to select an independent contractor or specialist to conduct the survey. The specialist should be able to prepare the report and develop creative, professional solutions to issues that have been identified.

 Step 2—Determine What Type of PMO You Have

Now that you’ve conducted an internal assessment, either through in-house staff or with the support of an outside consultant, you’ve effectively taken the “pulse” of your organization. You know the views of others inside the organization with respect to your PMO, and you may have developed a path forward to address issues and concerns that emerged as a result of the survey. Based upon daily functions, as well as information obtained through the assessment, the next step is to determine what type of PMO you have. Your PMO may be all, some of, or just one or two of the following:

  • A weather station—gathering and reporting project progress data
  • A control tower—developing and enforcing standards, methods and processes
  • A resource manager—dispatching project managers to key projects
  • An integrator—managing project interdependencies
  • A benefits verifier—tracking return on investment (ROI)
  • A portfolio manager—managing the health of the portfolio

Being aware of the type of PMO you have, and knowing its various attributes, will help as you (and/or your consultant) move forward in addressing the issues and challenges identified in the assessment. Moreover, being able to articulate the type and functions of your PMO with clarity will help to substantiate aspects of value that were not recognized previously by functional users and senior managers.

Step 3—Determine the Value of Your PMO

Value, like beauty, is in the eye of the beholder. Nevertheless, value can be determined by what one does, how well one does it, and often by how much it costs. Typically, organizations use business cases to prioritize limited resources for those elements or opportunities that provide the greatest ROI. Some of the challenges that put your PMO at risk of being under-valued include:

  • Lack of a current, published operational plan
  • Limited, or no, user involvement
  • Lack of executive support
  • Lack of a compelling business case
  • No standard agreement for requirements or performance metrics
  • Lack of accurate status reporting
  • Lack of organizational commitment and insufficient resources
  • PMO personnel who lack the requisite depth and expertise in critical project management skills

In recognizing these challenges or warning signs, it’s also important to understand who actually determines the PMO’s value. Figure 1 graphically depicts those who play key roles in value determination.

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It might seem that each group has an equivalent scope of influence over your PMO, when in fact, it isn’t true. We believe that project managers, as a group, have the strongest influence in determining whether the PMO is perceived as having value. After all, the PMO, in most implementations, is created specifically to help project managers perform their roles better. If the primary audience for whom the PMO was created fails to see the value in its work, it’s highly likely that others in the organization will fail to see it as well.

Creation, implementation and continued operation are what constitute a PMO as a program. And, as a program, it has multiple, on-going, and inter-related components, many of which are operational in nature. Therefore, as a function managing it, the head of the PMO needs to accurately identify all the stakeholders and engage in active stakeholder management. After all, each of the three groups represented in the above illustration needs something slightly different from the PMO, and it’s the head of the PMO’s job to figure out what that is and deliver it.

Step 4—Increase Your PMO’s Value

Now that you’ve identified the type of PMO you have, and have determined the value that it’s providing your organization, let’s take a look at the ways you can increase its value across the organization.

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Based on more than 28 years of experience in project management, we have developed the PMO Value Continuum shown in Figure 2. You can see that value increases substantially when the PMO moves beyond administrative functions, such as “project reporting,” to higher levels of involvement that align strategically with business management objectives. We’d suggest, based upon our experience, that the closer the PMO works with senior management in strategic planning, managing benefits and business alignment, the greater its value to these very people whose agreement is required to create it, or eliminate it. 

That said, we see a disturbing disconnect between those who run PMOs and those who value them. Looking back to the top ten most important functions, we see that most respondents to the Hobbs’ survey reported that providing project status was the PMO’s most important function; however, from a strategic value perspective it’s a relatively low priority. We do not assert that it isn’t an important function; in fact, it is. But, most senior executives wouldn’t place it high on the “value chain.”

If a PMO is to move up the “value continuum,” it must become more engaged and relied-upon for involvement in such strategic activities as portfolio management and strategic alignment. And, in order to be a key player in those areas, your PMO must be staffed with experienced professionals. Staffing the PMO with senior team members who possess critical skills will go far toward creating the perception of your PMO as a “value creator,” and not merely an overhead. 

Remember that your PMO’s potential is limitless. As in the case of most organizational entities, however, there are many variables that come into play. When it comes to the value of the PMO, these can range from corporate culture to maturity levels, and from strength of personnel and level of responsibility to the perceptions of others. In the end, the value of your PMO will be what you make of it.

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References 

Ward, J. LeRoy. Dictionary of Project Management Terms, 3rd Edition. Arlington:
ESI International, 2008. Print.. > Hobbs, Brian. The Multi-Project PMO:  A Global Analysis of the Current State of Practice.  Project Management Institute, 2007. Web. 9 April 2010.  > Ward, J. LeRoy. The PMO in Hard Times: Adding Value or Adding Cost. ESI International, 17 September 2009. Web. 9 April 2010. > Lang, Kathy J.  The Value of a Project Management Office. Marquette University, 2004. Web. 9 April 2010. > Doerscher, Terry.  PMO 2.0 Survey Report: The Continued Evolution of the Project, Program and Portfolio Management Office.  Planview, 2008. Web. 9 April 2010. >The Challenges to Success for Project/Programme Management Offices. ESI International, February 2009. Web. 9 April 2010

PMI® is a service mark and trademark of the Project Management Institute, Inc., and is registered in the United States and other nations.

The Value of Getting Everyone on the Same Project Page

TheValueofGetting1Background

ASML is the world’s leading provider of lithography systems for the semi­conductor industry, manufacturing complex machines that are critical to the production of integrated circuits or microchips. Founded in 1984, ASML is publicly traded on the Euronext Amsterdam and NASDAQ. With more than 6,500 employees worldwide, it enjoys an approximate 65 percent market share.

ASML spends an average of €460 million (US$610 million) annually on research and development and has more than 3,000 engineers in R&D. Working on five major products, along with other applications and products, ASML’s engineers can have more than 200 simultaneous projects occurring at any one time.

In 2005 ASML decided to assess its project management capabilities. It determined that while the company had long enjoyed successive growth and strong profit margins, there were opportunities through improved project management to realize even greater results.

The assessment showed that while there was no agreed ASML project management methodology, many engineers applied a range of project management skills and tools to gather requirements, plan and track their projects. However, since less than ten percent of project plans were “good” based on ASML’s criteria, this hampered company executives’ ability to evaluate and track projects against corporate goals and ensure effective resource allocation. The review also found that individuals fulfilling the role of project manager had often been selected for their technical expertise, rather than their project management skills, knowledge and experience.

It was determined that ASML could greatly benefit from:

  1. The development of an ASML-specific project management methodology
  2. A learning program to identify, teach and reinforce the methodology to project managers
  3. The embedding of project management support as a function within the company

The Strategy

In order to achieve its project management goals, ASML recognized it would need a partner that could help develop the methodology, design and deliver the learning program as well as help ensure the project management practices became part of ASML’s corporate structure and culture. In 2006, ASML selected ESI International to support the program.

ASML identified several core components for the program:

  • Development of an ASML-specific project management methodology based on the Project Management Institute’s (PMI®) A Guide to the Project Management Body of Knowledge (PMBOK® Guide)
  • Appropriate instructor-led courses to teach the methodology to approxi­mately 1,000 ASML team members
  • Formal, one-on-one coaching to provide real-time learning rein­forcement and support
  • Topic-specific, coaching workshops to further reinforce learning
  • The use of go/no-go project decision gates to reinforce the impor­tance of following the methodology and to embed project management thinking into everyday practice

Tactics

The program consisted of three completely integrated elements:

  • The methodology,
  • The training of the individual and
  • The coaching of the integrated project teams.

The first part of the program focused on the development of the ASML-specific project management methodology. In order to be successful the methodology needed to follow best practices as set out in the PMBOK® Guide while taking into consideration what was already working at ASML and the specific project management needs of the business.

With the methodology well defined, instructor-led courses designed around the tailored methodology were developed and delivered. Once team members completed the courses they were given time to review their current projects and develop an understanding of how to apply the methodology.

After a few weeks, coaching workshops, as well as individual one-on-one coaching sessions, were made available to all project managers and their project teams, a potential audience of more than 200 people. They were asked to identify high-priority projects with a focus on R&D projects for this real-time learning component. The coaching sessions and workshops were spread over several months and allowed project leaders and teams to agree upon working procedures for:

  • Defining the scope
  • Building the project plan
  • Reporting
  • Change control
  • Stakeholder management
  • Risk and issue management
  • Communications

Results

While many organizations struggle to see a significant impact early on from project management learning and development programs, the scope of ASML’s project portfolio combined with the comprehensive nature of the program delivered clear, up-front benefits.

In addition to the knowledge and skills gained through the instructor-led courses, individual coaching and coaching workshops delivered training to ASML team members, with results to date that include:

  • More than 80 percent of all project plans are considered “good” based on ASML’s criteria
  • Improved resource management and decision-making without sacrificing creativity using the decision-gates defined in the methodology
  • Increased levels of transparency in project performance, allowing project managers to see the impact of changes before the change happens
  • The establishment of the first embedded project management office of a planned network of PMOs
  • Demonstrated willingness by executive management to further invest in project management development

Next Steps

Despite its rapid progress, ASML recog­nizes that project maturity is a long-term effort. The company continues to build upon its success by:

  • Expanding the embedded PMO network
  • Focusing on developing the skills and knowledge that will enable project managers to function as trusted advisors and facilitators as well as good administrators
  • Creating a development program to provide line managers the skills and knowledge to better coach their project management staff
  • Increasing the focus on soft skill development for project managers
  • Implementation of an enterprise level project management system
  • Moving the responsibility for the project management learning and development program from the project management function to the learning and development function within human resources

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Reprinted with permission from ESI International.