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Tag: Best Practices

Project Managers Can Shine in Today’s Tough Economy

Written by Kevin Aguanno on . Posted in Articles. 3 Comments on Project Managers Can Shine in Today’s Tough Economy

In service companies, people have characterized sales people as the ones who bring in revenue to a company, but project managers as the ones that translate that revenue into profit.  Project managers are the ones who lead in the creation of value for project stakeholders.

Yes, I admit that, in most projects, project managers are not creating deliverables that will drive business value for their clients. However, project managers are the ones who focus the rest of their teams on the right goals, and then lead the team on a journey towards meeting those goals.  If the right goals are chosen, then incremental business value can result from the project.

In an economy where the word “recession” has been in the headlines for the past two to three years, using incremental business value as the measure of project success has become more and more common in the marketplace.  Project managers are being asked more and more to track financial benefits along with financial costs, and to document business case justifications inside their change authorization forms.

While the ability to read business cases and financial statements has always been required of senior PMs, the requirement that PMs create these documents and link business benefits to business strategy is more recent.  In my experience, I have seen that the extreme emphasis on business value can be linked to economic cycles:  when times are good, more projects get approved with “soft” benefits like improvements in customer service; while in hard economic times, projects need to deliver “hard” benefits, valued in dollars.

But aside from juggling the numbers in various reports and documents, how else does this affect the role of the PM?  I believe that economic downturns allow the more experienced, “senior” PMs to differentiate themselves from those more junior – specifically in the area of business strategy.

I like to work directly with the project executive sponsor as a partner in helping them to make their business case a reality.  This partnership paradigm is not just a feel-good word – it drives significant behavior changes.  I believe that what distinguishes the very best PMs from the rest of the crowd is this partnership mindset.

Being a partner to the project sponsor means that I will be their trusted advisor in providing opportunities (or alternative approaches) for the project that will help him or her achieve project goals, in the most effective way possible.  This improved effectiveness is measured using phrases like increased return on investment, lower project risk, better integration with external projects, etc.  To communicate these benefits to the sponsors, project managers must stay away from jargon like “earned value” or any of the technical terms used by the delivery team: talk to the sponsors in their own (business) language.

On technology projects, this is critically important.  The technical jargon and technical issues can overwhelm business executives who don’t have the background to be able to understand the implications of many of these terms in order to make appropriate decisions.  As a result, when they have had technical issues discussed with them in the past (using technical terms) they don’t understand the underlying message, and as a result they experience “surprises” later when the true impacts of the issues arise.  I’ve heard many executives talk with deep disappointment about “technology projects that always take far longer and cost much more than originally planned.”  With frequent cost overruns, executives have lost confidence in their delivery teams (and with good reason).

To reestablish trust with the business, technology delivery leaders need to learn to speak in the business’s own terms.  In effect, use “MBA-speak” – the jargon of the business world.  By speaking in business terms and taking the time to truly understand the business case behind the project, the PMs will soon be seen as “peers” of the sponsor, and soon can move towards being seen as a “partner” in helping the sponsor achieve his or her goals.

Another technique I use to speed up the process of being seen as a partner is to seek out the hidden agenda of the sponsor.  In other words, to uncover what personal objectives the sponsor would like to achieve alongside the project objectives.  I explain that I can plan a project a hundred different ways that will each achieve the project goals, but only some will help the sponsor achieve his or her own personal goals.  By having a frank discussion about his or her own performance measurements, commitments they made to their boss (or that their boss has made) and other similar items, I can present strategic options for structuring the project to make the sponsor more successful in their personal or career endeavors.  This will help build long-lasting, partnership-based relationships that can last across multiple projects.

In a down economy, companies are looking for ways to cut costs – often including the dismissal of underperforming staff.  As a project manager, your own performance may be measured based upon the success of your projects and the happiness of your sponsors.  And experienced PMs know that building a strong relationship with a sponsor can mean the difference between project success and project failure.  By taking the approaches mentioned above, you can position yourself as the trusted partner – one who is too valuable to consider dismissing – and better protect yourself from downsizing during a recession.

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10 New Year’s Career Resolutions to Consider for 2010

Written by Cynthia Low on . Posted in Articles. 3 Comments on 10 New Year’s Career Resolutions to Consider for 2010

Toronto — In addition to exercising more and pledging to eat healthier, the new year could be the right moment to revisit how you’re doing at work and set career resolutions. Kathryn Bolt, president of Accountemps’ Canadian operations, points out that for workers who lost jobs in 2009, rebuilding confidence may be the biggest challenge.

“The past year was a difficult one for many people, but the employment market shows signs of improvement,” Bolt said. “Whether employed or conducting a job search, professionals should take steps to enhance their marketability and better position themselves for advancement opportunities.”

Bolt offers the following 10 career-related resolutions for 2010:

  1. Play ‘internal’ auditor. Everyone’s heard that it’s a good idea to take an objective look at your skills and identify your strengths and weaknesses, but surprisingly few do so. Take some time to sit down and jot down areas where you think you could really improve in 2010.
  2. Learn something new. Pursue a certification, become proficient with a new software program or take a course to enhance your skill set. The key is to continually broaden your expertise.
  3. Grow your network. Join a professional association or online network, or consider working with a specialized staffing firm in your job search. These contacts can provide valuable career guidance as well as keen insights on trends impacting your field and business.
  4. Pay it forward. Networking is as much about helping others as asking for help. Offer to be a reference for a former colleague or provide resume advice for a friend. In the process, you’ll strengthen your relationships and build goodwill.
  5. Be a better coworker. Volunteer to help colleagues who may be overburdened and look for ways you can improve office morale, such as praising others’ achievements. In the process, you’ll establish yourself as a trusted resource at your firm.
  6. Brush off your resume. You never know when a new opportunity might come along, so it’s best to be prepared. Updating your resume also helps you mentally crystallize what you bring to your current job, especially how you are helping your firm weather the recession and prepare for growth — good things to have at the tip of your tongue at review time.
  7. Build your people skills. An Accountemps survey found that interpersonal skills often are the factor that can tip the scale in a candidate’s favour. Work with a mentor who can help you identify your strengths and those skills needing improvement.
  8. Don’t be a wallflower. Offer to take on projects beyond your job description and participate in or even lead cross-departmental teams. The exposure you gain to different functions and colleagues within your organization will enhance your professional marketability and the value you bring to your employer.
  9. Reward yourself. As you reach milestones in your career or job search, take the opportunity to acknowledge your success. Making time to go to a favourite restaurant or read a new book can go a long way toward keeping you motivated and ready to tackle new challenges.
  10. Stay positive. Employers want to work with people who maintain their poise, no matter how difficult things become. Use levity when appropriate to build rapport with your colleagues and ease tensions that arise. You’ll distinguish yourself by persevering and motivating others to perform at higher levels.

 Accountemps has more than 360 offices worldwide and offers online job search services at www.accountemps.com.

Using the Requirements Creation Process to Improve Project Estimates

Written by Curt Finch on . Posted in Articles. 5 Comments on Using the Requirements Creation Process to Improve Project Estimates

Estimation can be one of the most difficult parts of a project. Important questions must be asked in order to form the right figures and plans. How long will the project take? How many resources will it consume? Consultants may also ask the following question: What is the appropriate amount to bid on this project? These questions are not easy to answer at the outset when one generally has only a vague idea of what will be required throughout the project.

The good news is that there is a fairly simple way to improve project estimation and, consequently, the bidding process. Most people do not realize that the requirements creation process can lend insight into the length and scope of a project. Let me give you an example of how this method works and then explain how you can implement it within your own company.

The Story

Back in 1992, I was working for a consulting company named The Kernel Group (TKG). During this time, I was put in charge of porting Tivoli’s software from Sun’s Solaris operating system to IBM’s AIX operating system. The project was to be done under a fixed bid, and consequently, we at TKG knew that estimating the effort required to port the code was of paramount importance.

I looked at the code with a coworker of mine, and he came to the conclusion that if Tivoli didn’t make the project hard for us in some unspecified way, we could port the million or so lines of code in about a weekend. I told him that he was nuts – that it would take at least a week, maybe even two. We jointly decided that we probably ought to call it three weeks just to be safe. We also decided, rather smugly, not to report our padding of the schedule to evil upper management.

As a result, evil upper management drastically expanded the project bid to $325,000, and my coworker and I thought that this was a ridiculously high price. We believed that we were gouging the customer and that they would never accept it.

Yet they did accept it, and once the project began, we proceeded to discover how truly terrible we as software engineers were at the task of project estimation. To make a long story short, the porting schedule expanded to exceed our original estimate and we consumed not only all of the $325,000, but a whole lot more on top of it.

The Formula

Now our consulting company was religious about tracking employee time on a per-project basis, and so we broke every project into phases: requirements/specification, design, coding, testing, debugging, documentation, training, etc. This project was no different in that respect; we broke it down into its respective phases as well.

Just before we started working on the project in question, I read a book called Practical Software Metrics for Project Management and Process Improvement by Robert B. Grady. (By the way, this is a truly fabulous book that I would highly recommend to anyone who is managing software development projects.) According to the book, one of Grady’s rules of thumb is that 6-8% of every software project is usually eaten up in the requirements/specification phase.

One of the conclusions that Grady comes to in his work is that you can use this fact to estimate total project size. In other words, if it took 60 hours to do the specification, that’s probably 6% of the job and the job will be 1000 hours. Following such logic, a six hour specification implies a 100 hour job. Since the specification always comes first in any project, you can get some pretty reliable estimates from this method alone. In fact, in my experience as both a programmer and the CEO of a software company, I have found it to be incredibly accurate and useful.

A second way to triangulate this project estimate is to ask experts in the area for their opinions – hopefully they will be better at project estimation than my coworker and I were that first time. A third way is to select an appropriate metric for estimation. For example, one could use line of code counts or function points in estimating the length and scope of software projects. For architecture projects, you might use number of pages in the drawings or square feet planned as similar analogies. Every project has some gross measure of its size that is available at the outset and can be used to plan the overall project in addition to this method I’ve described of tracking time against the earliest phases.

So back to the story. We really blew it on estimating and bidding on that first project for Tivoli, but when the next one came around, we had data on the portion of the overall project that the requirements phase had taken up. This allowed us to use Grady’s ratio to predict overall project size, and we found that on this second project, we came up with a very accurate project estimate. This worked very well for all of the subsequent fixed-cost consulting work we did for Tivoli.

Partially due to the strength of the solution and how well it ran on IBM’s AIX operating system, Tivoli was able to eventually sell their company to IBM for 743 million dollars in 1995.

For a consultancy that is doing fixed-cost projects, this concept of using the standard ratio of requirements phase to overall project length is a very powerful project estimation technique. It can eliminate erroneous bidding and its resulting costs, which is a major concern for such companies.

Accurate Bidding

Overbidding on a consulting job means that you won’t get the work in the first place, because the potential customer will give it to your competitor at a cheaper price. Underbidding, however, means you will win the deal and lose money. Neither situation is acceptable for businesses today, and yet, most consultancies do a poor job in this area. One way to make more precise bids is to use a key performance indicator, which is a tool used to measure progress towards a strategic business goal. For example, the number you want to minimize in this situation is defined by the formula [(E-A)/E], where:

E = estimated hours to complete the project
A = actual hours spent to complete the project

It is important to keep this KPI value as close to zero as possible, which indicates that you are bidding on projects more accurately.

Just tracking this number is a great first step towards better bidding, and you can get the necessary data to calculate it from any timesheet system, including a paper one. Automated timesheet systems, however, are generally even more effective in this area because they often have reports to calculate the KPI figure for you.

Improving adherence to your estimate can be difficult for some companies until they understand the ratio concept described above. An example of this is illustrated in the following diagram, which shows how the formula can work for any business. Your company’s magic number may not be 6-8% like Grady’s, but once you determine your own ratio for specification to total project length, you can use it again and again.

usingtherequirements1

Making it Work

I currently run a software company, Journyx, and I can assure you that this project estimation technique continues to be successfully employed by many of our customers to their great advantage. It is easy to implement and you can do it too. Once you do, you will start producing laser sharp estimates before you know it. And that’s a result we can all feel good about requiring.

Happy estimating!

Don’t forget to leave your comments below

Curt Finch is the CEO of Journyx. Journyx offers customers two solutions to reach the highest levels of profitability: Journyx Timesheet – a timesheet and expense management solution for the entire enterprise – and Journyx ProjectXecute – a solution that unites project and process planning with resource management. Journyx has thousands of customers worldwide and is the first and only company to establish Per Person/Per Project Profitability (P5), a proprietary process that enables customers to gather and analyze information to discover profit opportunities. Curt is an avid speaker and author, and recently published “All Your Money Won’t Another Minute Buy: Valuing Time as a Business Resource.” Curt authors a project management blog and you can follow him on Twitter.

The Risks and Benefits of Knowledge Process Outsourcing

Written by Carlos Sanchez on . Posted in Articles. 5 Comments on The Risks and Benefits of Knowledge Process Outsourcing

Many organizations now consider Business Process Outsourcing (BPO) as a viable option to increase operational capacity, access specific business process knowledge and reduce costs.

The evolution of BPO is Knowledge Process Outsourcing (KPO), the outsourcing of process requiring analytical thinking and judgement. Embarking on an outsourcing effort is not for the faint of heart. There could be negative repercussions on employee morale and public opinion, and the probability of failure is high. This article describes some of the benefits, challenges, risks and program management aspects you should know before evaluating a process outsourcing effort specifically around KPO.

KPO at Home and Abroad

Business Process Outsourcing reached mainstream management thinking in the late 90s and it is no longer exclusive to large corporations; small and medium sized companies are also taking advantage of the BPO opportunity to augment their capabilities and allow them to focus on revenue growth. Since 2003 business process outsourcing has shifted from outsourcing back-end, non-core, and repetitive processes such as accounts payables and accounts receivables to outsourcing core processes that require analytical-intensive thinking and judgement like market research and data analysis. This shift has created what is now referred to as Knowledge Process Outsourcing. KPO vendors are typically located abroad in places like India and Singapore usually referred to as off-shore locations. Other countries like Mexico and Chile are providing KPO services and are referred to as near-shoring locations because of their shorter travel times, time zone alignment and culture similarities. Some KPO vendors have operations in the same country as their clients and they are referred to as on-shoring.

Trends in KPO

KPO is predicted to grow to anywhere between $10 and $17 Billion (USD) globally by next year [2010]. Areas that are experiencing growth in the KPO arena include: data search, data integration, market research, project management, remote education, radiology, medical transcripts preparation and legal processes. Some of the factors driving the growth in KPO include the adoption of global standards for qualifications, access to a large pool of skilled and experienced professionals abroad and improved remote project management capabilities due to improvements in telecommunications and other enabling technologies. The way decisions are made about outsourcing is also changing. KPO decision making will move from the CIO and COO level to divisional business managers and board of directors.

Benefits of KPO

While the main attraction of BPO was improved efficiency and cost reduction, the main attraction to KPO is increased revenue and improved competitive advantages as a result of having access to a large pool of skilled professionals in knowledge intensive industries. Other benefits of KPO include cost savings, converting fixed costs into variable costs, flexibility for companies to add or reduce personnel based on business cycles and the continuous execution of work by taking advantage of different time zones.

KPO Challenges

The challenges of pursing a KPO strategy are both external and internal. External challenges include finding a suitable KPO vendor that can offer the necessary skills in a scalable manner. Protecting intellectual property is a challenge since it will have to be shared with the vendor. For some industries, protecting data and privacy as well as abiding to legal and compliance requirements are challenges to overcome. The physical location of the KPO vendor creates challenges from a language and time zone perspective. Internal challenges stem from adapting the organizational and management mindset from managing internal resources to managing the KPO vendors resources situated in a remote location. The definition of quality and performance metrics can pose a challenge since some of them may not exist. Internal processes and managers usually do not have quality metrics in place and will need to be defined before outsourcing the process. In some cases, the outsourcing effort exposes inefficiencies and weak areas in the process and a decision needs to be made to outsource the process as is or to optimize it before outsourcing. Technical challenges can also arise so the information technology department must be involved to ensure the infrastructure, applications and data is in place and well protected, and that the KPO vendor is using the data and applications as it was contractually agreed.

Risks of KPO

Process outsourcing is a risky initiative. The main risks include the impact on employee morale, key talent retention, outsourcing a core competence, negative public opinion, unfavourable currency exchanges, poor program management, poor project management, political instability in the KPO vendor’s location, terrorist attacks, taxing structures, security, privacy, salary inflation, service interruption, technical issues. These are just some of the risks to be considered. Also consider that KPO vendors may experience a labour shortage or may be unable to attract key talent and skills needed and can eventually go out of business. Poor program management, lack of executive support, poor vendor selection, lack of understanding of the company’s core competencies, undocumented processes and procedures are also risks to be considered from within the organization. Based on the business strategy, organizations considering a KPO strategy must first conduct a thorough analysis of their core competencies, process efficiencies and risks. The impact to employee morale and human capital is a significant risk and needs to be managed appropriately.

Program and Project Management Considerations

To increase the probability of success, organizations must use a structured approach to managing the [KPO] outsourcing opportunity. Organizations can pursue a KPO strategy directly without any prior BPO experience, although organizations with BPO experience will have a shorter learning curve and less risk. Outsourcing efforts should start by forming a team that will identify opportunities to outsource as KPO. This team should perform a thorough analysis of the organization to identify opportunities for outsourcing and it should represent all relevant functions of the business. The team must be aware of the organization’s strategic intent and the objectives of the outsourcing effort. The project manager should be someone with prior experience in outsourcing projects and a high level of empathy given the human aspect of the project. In some organizations a central group is created to oversee the outsourcing efforts. This group can provide consistency in the way outsourcing projects are managed, evaluate adherence to outsourcing methodologies and monitor the on-going performance of the vendor. KPO vendor selection must be based on whether the vendor can provide a significant competitive advantage and must be able to provide the required talent and skills. Selecting the process or function to outsource should also be done on a phased approach from lowest risk to highest risk. During the first phase only simple processes can be considered. A second phase can include processes with low cross functional dependencies. A third phase should deal with the more complex processes.

Conclusion and Recommendations

Knowledge Process Outsourcing can provide value and allow companies to focus on increasing revenue growth while providing challenging and progressive positions to employees that want to move into supervisory and monitoring roles. KPO offers a great opportunity to outsource analytical intensive processes that contribute to the development of new products, evaluate new markets and offer new services. KPO continues to grow and is becoming a core option for business strategists. Large and small organizations can now take advantage of the KPO model since it requires deep knowledge and not the high volume transactions associated with BPO efforts. To increase the probabilities of success, a phased approach to selecting the outsourcing candidates must be performed using a program and project management approach with executive buy-in and cross-functional representation. Standard project management methodologies must be followed and most importantly a two-way communication with the KPO vendor must be maintained throughout to ensure on-going success.

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Carlos Sanchez, MBA, PMP, CMC is a consultant at SPM Group. He has over 10 years of experience working in a variety of consulting projects both technical and business. His area of expertise includes Operations, Process Improvement, Project Management, and Supply Chain Management. Carlos holds a BSc in Mechanical Engineering from the University of Toronto and an MBA from the Rotman School of Business. He is an active member of the Project Management Institute and is a certified Project Management Professional (PMP) and a Certified Management Consultant (CMC).

Security Considerations for Managing Project Information

Written by Mike Lecky on . Posted in Articles. 2 Comments on Security Considerations for Managing Project Information

How do we achieve balance between ensuring that project information flows freely and protecting sensitive information?
As project managers, one of our primary roles is to make sure information flows between those that need it to do their job and support the project. But we’re also responsible for ensuring that corporate information assets and strategic information about the project remain secure.

The 2005 edition of ISO 17799 (Code of Practice for Information Security Techniques) advocates a risk based approach to managing sensitive information. This applies equally to information flows in projects.

It’s well understood that achieving increased security usually occurs at the expense of the user and, in this case, project stakeholder expense. For example, certain files we may want to view may be subject to restricted access. It’s an extra step which serves to limit the exposure of information to those granted the privilege of access. Access may require an additional password or other authentication technique, adding yet more difficulty to the process of restricting the information on an ongoing basis.

So what do we need to consider when deciding how to protect sensitive information? We don’t wish to overburden project participants with access limitations, nor reduce efficiency in our project execution? We need a balance.

First, identify sensitive information and rank the risk of exposure. This will guide the level of effort you apply to restricting access to key project stakeholders. “Need-to-know” is the guiding principle here.

Second, you can review your project activities and resource allocations in terms of “separation of duties.” The idea here is to limit an individual’s ability to act irresponsibly (intentionally or accidentally) based on the information they have access to. Of course, clear lines of separation and an understanding of what individuals need to know is necessary for this to be effective. Segregating roles reduces the risk of collusion as well as protecting corporate assets.

Finally, “cross-training” can be used to increase the likelihood that the people with the right knowledge will be available to perform project activities at the right time. It ensures an alternative when individuals who have developed specific knowledge based on their access to privileged information become unavailable to support the project. The availability of key people should play into your assessment of risks regarding sensitive information.

By considering these three security principles, the appropriate level of protection can be applied to project plans based on the risk of exposure of the information assets. Plans can mitigate or avoid risks of exposing sensitive information and project delays due to the unavailability of key stakeholders.