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Three Steps to Project Success

Written by Cynthia Low on . Posted in Articles. 8 Comments on Three Steps to Project Success

Increased competition, changing consumer demands, and overall economic uncertainty are causing business leaders to rethink they way they conduct business. To maintain profitability, many organizations are focused on four main business objectives: Reduce Cost, Increase Revenue, Maintain Operations and Increase Speed and Efficiency.

To achieve these business objectives, many companies engage in tactical projects… projects that are typically run sporadically within an organization and rarely achieve success or business value. In fact, industry analysts report that 70% of projects executed are not successful. In addition, less than 20% of companies that engage in supply chain initiatives actually achieve ROI. This is astounding given that a recent survey from CIO Insight indicates that 50% of business executives require that new projects deliver faster ROI…. “Houston we have a problem”. How can your project deliver faster ROI if the chance of delivering ROI in the first place is slim?

Our research indicates that the leading cause for such poor project success is related to the ability to implement change within the organization that holds people accountable for results, and tracks ongoing performance measurement. The fact is, many organizations spend most of their time implementing the “solution” rather than focusing on the business processes and organizational change required to deliver results. The bottom line is that proper organizational change and new business processes account for over 70% of the ROI from a successful project, while only 30% is attributed to the implementation of technology alone.

Focusing project efforts around delivering the remaining 70% of project ROI and business benefit is the key. Based on our work with many Fortune 500 companies, we have seen three main themes for achieving project success:

Obtain Executive Buy-in and Maintain Executive Leadership During the Project Life Cycle.

This means that a solid business case should be developed to ensure commitment, not only for project funds and resources, but also for ongoing leadership to help ensure the results can be delivered. In fact, 63% of project management professionals ranked executive buy-in and leadership support to be the number one driver for achieving measurable business value from a project (source: Jeff Berman Group 2006 Project Performance Survey). Along with a feasible implementation plan and setting realistic expectations for achievement, gaining executive leadership and support requires the ability to demonstrate “how” your project will deliver results.

By showing executives how benefits and ROI will be delivered, executives will stay enthused and help toe the line for implementing change. How includes true mapping of project business value drivers by linking financial, process and operational metrics that will be used to track ongoing performance. Linking such drivers to the case for change will help develop a clear picture that is simple to understand and easy to drive. This will ensure the ongoing leadership support needed to achieve project success.

Implement Change by Managing Key Project Stakeholders.

Stakeholders are defined as an individual or group that is affected by or capable of influencing the change process. Such stakeholders may include managers, system users, project steering committees, customers or suppliers. Stakeholders are important because without their buy-in or consensus to the process or organizational change, the change will never happen. For instance, suppose you plan to put in a new inventory planning system, but the new users of the system (e.g. planners) like the way they have been manually planning inventory for the past 20 years. Furthermore, what if the planners do not buy in to the way safety stock is calculated in the new system? These project stakeholders (in this case planners) won’t trust the new system and will inevitably go back to their old way of doing things. Result: the new multi million-dollar planning system will not be used as originally intended…. project ROI will be sacrificed.

The key here is to involve project stakeholders, from the beginning of the project, to obtain buy-in. This can be done through meetings, workshops, etc., and requires a constant feedback and communication mechanism to ensure that stakeholder commitment is achieved during and after the project is implemented. The bottom line is to understand that any change, whether it is organizational, process or technology related, involves people. People are the foundation for delivering the results. People are your project stakeholders.

Implement an Ongoing Performance Management Process.

Ever hear the term “manage what you measure”? Organizations spend a lot of time doing a lot of things, but mainly focus on those things that are measured or reported. Establishing a Performance Management process requires that your project have Key Performance Indicators (KPIs) or operation metrics that are linked to company business objectives, people and the original business case. Business objectives for projects typically include: reducing cost, growing the business or increasing speed and efficiency. By assigning people (Stakeholders) to KPIs and linking KPIs to business objectives, a clear path is made for not only achieving the original project business case goals, but also delivering project ROI to the business. This means that project stakeholders will be held accountable for results. In return, the company should recognize and reward these efforts. Putting in place an ongoing performance tracking mechanism means that the organization is prioritizing projects and activities for the purpose of delivering results (implementation of the “how” from above). In doing so, the organization will benefit by focusing their time managing what is important…projects linked to business objectives.

In conclusion, the three steps above are things that many of us know or may intuitively feel, but never get the chance to implement. In particular, IT projects tend to be very complex thus requiring that most of our time is spent on the “implementation of the solution” rather than focusing on “how” the benefits and ROI will be achieved. Given today’s tight IT budgets and fierce competition within the marketplace, companies can no longer afford not to have their IT project justified or successfully implemented. Don’t be left behind, take the first step of the three step approach.

If you have the time, I’d like you to join me for a free webcast on June 4, when we’ll discuss Maximizing Project Value. You can earn one PDU. Register free at
http://www.amanet.org/events/maximizing-project-value/

, president of the Jeff Berman Group, has developed a reputation for success by transforming organizations and managing global projects for Fortune 500 companies such as Gillette, Johnson & Johnson, FMC, CertainTeed, and Cytec. He specializes in helping companies deliver measurable value from project investments by combining expertise in business processes with technology implementations. Mr.Berman is author of the best selling book Maximizing Project Value as well as several white papers, published articles and training books. He holds a B.S. in Industrial Engineering and M.B.A. from Northeastern University. Maximizing Project Value (ISBN: 0-8144-7382-2) can be purchased at your local bookstore or at www.pmi.org or www.jeffbermangroup.com for an autographed copy. Mr. Berman can be reached at [email protected].

 

Jeff Berman

The Electric PMO

Written by Cynthia Low on . Posted in Articles. 6 Comments on The Electric PMO

I had the great pleasure of sitting in on a round-table discussion at ProjectWorld Canada this week in Montreal. Of all the things you can do at ProjectWorld Canada, sitting with other project managers and doing peer-to-peer learning is by far my favorite. The topics in this case were on placards at each table and you could just select the subject that was of interest and sit in for a half-hour discussion. “A successful Project Management Office (PMO)” caught my attention and I sat in on both sessions to listen in.

I was not at all surprised to find several varied opinions about how to make a PMO successful, but what was most interesting was the wide range of ideas over what constitutes a PMO and what its purpose should be. If you’ve read my column before, you know that my focus in the industry is on project management systems, but imagine the challenge for someone in my area if it is that difficult even to define a PMO. Let’s take a look at a couple of different perspectives of what a PMO could be:

The Owner
It’s the rarest of all PMOs. In this scenario, the PMO has ultimate authority over every project manager. The project managers report directly to the PMO. We see this most often in a mega project environment where the entire organization has been created, in fact, to accomplish a particular project. It can also happen in Defense and Aerospace projects where the government has imposed project management standards, which define how the organization must manage. In this environment we’re more likely to find a small, centralized project management office staffed by highly skilled full-time project scheduler and project cost analyst personnel.

The tools that are chosen for this situation are heavy on the analytics and light on user-friendliness. Compliance and collaboration are not the first concerns here. What’s more important is that we can do strong forecasting, strong project accounting, and that we’re able to have sufficient flexibility to integrate directly into the organization’s ERP and corporate reporting systems. We focus more here on government or contract compliance, so we’re more likely to find things like requirements for Monte Carlo risk analysis and Earned-Value standards for cost analysis.

The Coach
(No, not the couch – that’s where PMO staff end up after a long day!). Perhaps the most common PMO role today is that of mentor or coach. They’re not there to impose their authority on a project or on the project manager but, rather, to be there to guide the Project Manager, to offer assistance if needed, and to provide tools and resources to help the project get out of trouble.

In this case, the PMO is more likely to be a small, highly skilled group and extremely unlikely to be hosting a strong centralized enterprise project management or enterprise portfolio management system. They’re more likely to offer tools that each individual project manager can use, and to facilitate training exercises and the delivery of easy-to-implement templates. There’s not much room here to police the projects under the coach, so the role is supportive rather than prescriptive.

If it’s all about supporting others, the ability to disseminate information is more important than our ability to collect it. So, we look for tools that are strong on document management, strong on communications and light on centralized analysis.

The Scout
Many PMOs are set up like the Defense Early Warning (DEW) System of cold-war fame. The purpose of the office is to identify potential problems within projects and to report back on this to management. Scout PMOs don’t have much authority but often they are much more than reporters. After all, if they can identify the problems early on, why not try to tackle them up front. It’s not unusual to find a desire for an enterprise project management system here, but deploying one can be a challenge. The Scout PMO is often empowered from the highest levels of management, and that’s a good thing if you’re trying to deploy an EPM system. However they’re often viewed with suspicion by the project managers themselves, and that’s an awful thing if you’re looking for the cooperation you need to get an EPM system used by everyone.

Systems for a Scout PMO will be strong on data collection, strong on reporting, and a little lighter on heavy analysis. Assembling information from numerous disparate sources into a single view for management is almost impossible, so the Scout PMO will lobby heavily for data collection and tool standards, as well as some semblance of standards for projects, such as coding for stage gating phases and project durations.

The Facilitator
While it’s not yet the most numerous, certainly one of the most desired types of PMOs anywhere is that of the Facilitator. This kind of PMO doesn’t have authority over the rest of the project managers, yet it doesn’t have a passive role either. The PMO’s role is to facilitate the execution of the projects under its purview. This means that the role includes that of the Coach and the Scout. It’s often said that a facilitator has the toughest role in a negotiation. They are held responsible for the result but carry no authority to generate it and that, indeed, is how it works in this environment also.

The Facilitator PMO will have the backing of senior management but will be a dotted line on the organigram. Without authority, they will resort to cajoling, threatening, inspiring, evangelizing and pleading in order to produce the result, and it’s often very successful.

This PMO is characterized by a small cadre of highly trained and highly charismatic personnel. We’re most likely to find a successful Enterprise Project Management system implemented with this kind of PMO. Communication and collaboration are very significant desirables in this scenario, and that is often a key to making an EPM system work. Also, centralized information is essential to the Facilitator’s being able to identify areas in which project managers, team leads and management must collaborate. So getting all project data into one place is going to be an essential part of making the Facilitator PMO successful.

There are other kinds of Project Management Offices, so if I’ve not mentioned yours or if yours is a hybrid of the couple I’ve described, don’t fret. The point is that before you head off to choose project management software ideal to your PMO, or before you start to implement the project management software you’ve got, it’s worthwhile to think about what role you’re trying to fulfill. None of the definitions I’ve listed are the “best”. They’re all specific to what an organization is trying to accomplish and the particular business challenges they are facing at that time. In fact, it’s not unusual to see the role of a PMO change over time as the organization it serves changes.

Most high-end enterprise project management packages these days have so much flexibility that they can be deployed in many different ways. You can focus on so many different aspects of these systems that they can easily support many different PMO scenarios. So, think about your PMO scenario before leaping directly to installation and training of the system you’ve chosen.

Chris Vandersluis is the founder and president of HMS Software based in Montreal, Canada. He has an economics degree from Montreal’s McGill University and over 22 years experience in the automation of project control systems. He is a long-standing member of both the Project Management Institute (PMI) and the American Association of Cost Engineers (AACE) and is the founder of the Montreal Chapter of the Microsoft Project Association. Mr. Vandersluis has been published in numerous publications including Fortune Magazine, Heavy Construction News, the Ivey Business Journal, PMI’s PMNetwork and Computing Canada. Mr. Vandersluis has been part of the Microsoft Enterprise Project Management Partner Advisory Council since 2003. He teaches Advanced Project Management at McGill University’s Executive Institute. He can be reached at [email protected].

Project Management is not Rocket Science

Written by Andrew Miller on . Posted in Articles. 3 Comments on Project Management is not Rocket Science

I am going to let you all in on a little secret

  1. Manage Project Cash Flows
    Identify and estimate when cash from the project will need to go out (paying suppliers, consultants, contractors, etc.) and when cash from the project will be coming in (government or organizational funding, savings, etc.). I am not advocating a complex financial analysis, but by having a monthly cash flow statement for the project, you will be able to better manage the ebbs and flows of the project budget.
  2. Collaborate with Suppliers
    Not enough projects or companies do this well. You have spent a great deal of time negotiating contracts with suppliers, so now you need to manage those contracts and suppliers. Hold them accountable for what was promised and look for other ways to collaborate with them to create mutually beneficial situations. This can be simply done through regular performance meetings with those suppliers providing goods or services to your project.
  3. Integrate Systems and Processes
    Different organizations use different systems and project management methodologies. Ensure that they are all integrated….your change control process should be integrated with the process to changing the contract; the tool you use to manage the project plan should be integrated with your budget. These are all logical links that need to be in place to reduce non-value added activities for you and your team.
  4. Develop and Retain Your Talent
    Sounds easy, but it is very difficult to do because it is thought to be a soft skill. Find opportunities for members of your project team to take on additional responsibilities and show what they can do. Who knows, maybe they can take some work off your plate. Keep them motivated and engaged and you will be surprised at what some people can do. Take time out to provide feedback on their performance, including what they do well and areas where they can develop. A big part of your job as project manager is communication.

Of course, there can be many other things to focus on, but these are four simple ones that can be addressed quickly and easily. If you are not doing all four of these, you should be. If you are already doing them, then kudos to you.

Why Do Organizations Struggle with Project Management?

Written by Mike Lecky on . Posted in Articles. 4 Comments on Why Do Organizations Struggle with Project Management?

There’s no one answer. Barriers to achieving project management maturity are as numerous as there are differences in cultures, business processes, corporate directions, technology infrastructures and skill sets. One certainty is that increasing maturity in project management increases overall performance.

Time and again presenters and researchers provide information showing remarkable increases in performance as firms move from one up to five on the five-point Capability Maturity Model (CMM) scale. It’s not at all unreasonable to expect an overall performance improvement in the range of 40%-70% in moving from level two to four on the model scale. This can represent a huge savings over the course of the three years it would likely take to make this climb.

Overall performance can be measured on several scales, depending on your organization. Ideally, it is aligned with the strategic initiatives and might be based on a scorecard approach. A scorecard model identifies and allocates key goals to different areas of the organization, providing performance targets which are then tracked over the course of a reporting period. If you were interested in setting a scorecard for project management, you might include goals to reduce project life cycles, decrease project cost, reduce unplanned work or reworks, and improved portfolio management.

Regardless of measurement approach, the key benefits of increased maturity are lower costs and shorter project cycles. Perhaps one of the more significant barriers to improvement is the difficulty companies have realizing tangible benefits when at early stages of maturity. The business case is tougher to make early in the climb. It’s a bit of a Catch-22: organizations with lower levels of maturity have limited competencies when it comes to measurement and self-assessment, while those higher in maturity have the rating because of their process measurement and analysis capabilities.

Achieving improvements in project management is not the work of a ‘lone ranger’. It takes planning, commitment and participation at all levels of management. Without long-term commitment from senior management, supported by visible short term ‘wins’ to sustain interest, even the most tenacious ‘agent of change’ won’t be successful. Knowledge of the improvement process and a clear understanding of what to expect in terms of performance improvements over time, is essential to build a successful maturity improvement strategy.

Those early in the climb to maturity experience greater difficulty, since roles, frameworks and formal definitions of process activities are less established. The foundation doesn’t start to solidify until repeatable process activities emerge in level two of the CMM. This makes getting a foothold on improvement difficult. As an organization continues its ascent to level three, controls over the repeatable processes are implemented. These take the form of reviews, metrics and escalations. And these, too, continually improve with the cycles of learning apparent from the increased visibility provided by measures on the process. Once refined enough by these controls, level four is achieved and quantitative goals can reasonably be set and met.

Most organizations wouldn’t see the need to invest in the process optimization necessary to achieve maturity beyond level four. Most certainly haven’t needed to consider this at all, since they continue to struggle with how to measure, analyze and action improvement of their project management processes. Perhaps this is a competency they should consider developing at the same time as they develop and train their project managers.

Staying Power

Written by Cynthia Low on . Posted in Articles. 6 Comments on Staying Power

CIO Survey Reveals Most Effective Retention Methods

In the information technology (IT) industry, money talks, but it’s not the only employee-loyalty tool, a new survey shows. When chief information officers (CIOs) were asked to identify the most effective ways to keep IT staff, compensation (27 per cent) topped the list. Providing flexible schedules was close behind, cited by 21 per cent of respondents; another 17 per cent said opportunities for professional development helped to improve retention rates.

The survey was developed by Robert Half Technology, a leading provider of
information technology professionals. It was conducted by an independent research firm and is based on telephone interviews with 270 CIOs across Canada.

CIOs were asked, “Which of the following elements have you found most
effective at improving IT staff retention?”

Increased compensation…………………….. 27%
Offering flexible schedules………………….. 21%
Professional development or training……… 17%
Telecommuting…………………………….…… 7%
Extra vacation days or time off……………… 4%
Granting company stock or options……….. 3%
None…………………………………..…………. 1%
Don’t know/other………………………….….. 20%
TOTAL …………………………………………100%

Attractive compensation is a key component of an effective retention program as it shows employees their contributions are valued. A corporate culture that includes work/life balance and training options is also highly valued by IT professionals and is crucial for retaining top performers in a competitive hiring environment.

Effective Retention Programs would include the following components to improve staff retention rates:

Pay competitively. Periodically benchmark employee compensation
against industry-standard ranges to ensure your salaries are keeping
pace. Robert Half Technology produces an annual Salary Guide with
salary ranges for more than 60 IT positions.

Support work/life balance. To prevent teams from burning out, ensure
that workloads are realistic. Encourage employees to ask for help
when they need it, and consider bringing in project professionals to
help during peak periods.

Offer and promote training. Provide IT staff access to the courses
and certification programs they need to grow their careers. Make sure
employees are aware of professional development opportunities.

Sandra Lavoy is a vice-president with Robert Half Technology, a leading provider of IT professionals on a project and full-time basis. Robert Half Technology has more than 100 locations in North America, South America, Europe and the Asia-Pacific region, and offers online job search services at www.rht.com. For more information, please call 1-800-793-5533.