Page 1 Project Management and Organization Success:
Transcript of Page 1 Project Management and Organization Success:
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Project Management and Organization Success:
An executive briefing to Princeton management
Michael KnappJuly, 2002
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this Presentation is intended to:
Look at the ‘state of play’ & directions in project & program management
Look at the value to Princeton of modern program and project management
Discuss the roles and responsibilities of senior management in managing successful programs & projects
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1. Project Management: its current status
2. Why Projects Fail
3. What’s the ROI?
4. Project Management: the new perspective
Topics
Directions in Project & Program
Management
Section A
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Project Management – a practical definition
Project Management covers those set of
practices designed to:
1. Deliver specific objectives
2. Realize clear & measurable benefits
3. Within a discrete time frame
4. Manage a budget & resources
Most importantly, projects deliver change and
increase value to the organisation, its members
and constituency.
Section A: Directions in modern project management
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A clash of cultures?
One reason why Universities often struggle
with projects and project management is:
“If a little change is OK, no change is better.”
In other words, being efficient at managing
change is not necessarily a high priority for a
lot of Universities.
Section A: Directions in modern project management
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What is Project Success?
Objectives
Time Cost
The 'Golden Triangle' of Project Success
Project success occurs when we have:
Note that project success is more than just finishing the project
A delighted client (expectations met) Delivered the agreed objectives Realised the expected benefits Met time and budget expectations
Section A: Directions in modern project management
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Where project management currently sits
Conclusions:
1. Project management is seen as being critically important to organization success.
2. The relevance of project management is increasing.BUT3. Organizations are not prepared to leverage its real value.
* PA Consulting report: 1997 - 2002
Section A: Directions in modern project management
Where is Project Management heading?
0% 10% 20% 30% 40% 50% 60% 70%
PM is a core competency
PM is critical to companysuccess
PM delivers results in ourorganization
People understand howPM works
We have the right projectskills
2002
1997
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How projects actually perform
Section A: Directions in modern project management
Claimed in the Business Case
TimeQ1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Yr 1 Yr 2
$NPV
+$
-$
Break-even
Claimed in the Business Case
TimeQ1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Yr 1 Yr 2
$NPV
+$
-$
Break-even
What was realised!What was realised!
Some projects ending up losing money!
Service / satisfaction levels are poorTime
Client / user Satisfaction Level
Very happy
OK
NOT happy
Implementation
Too many projects fail!
Cumulative Cost: Budget vs Actual
0
20
40
60
80
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120
140
160
180
1 2 3 4 5 6 7 8 9 10 11 12
Elapsed Months
$'00
0 Budget
Actual
Cost Cost blowblow--outout
Time Time overover--runrun
Cumulative Cost: Budget vs Actual
0
20
40
60
80
100
120
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180
1 2 3 4 5 6 7 8 9 10 11 12
Elapsed Months
$'00
0 Budget
Actual
Cost Cost blowblow--outout
Time Time overover--runrun
We do not reduce head-count!
Before implementation AFTER implementation
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Principal causes of project failure
Section A: Directions in modern project management
1. Senior management show less than optimal commitment
2. Accountabilities are not met
3. Poor alignment with Strategies & Priorities
4. Benefits not defined or not realizable
5. Estimates are wrong. Full life cycle costs were never understood
6. Scope is not set or controlled
7. Insufficient / inappropriate resources
8. The wrong strategy. Time frames too ambitious or too long
9. Inappropriate technology
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IT has been the traditional focus of projects & project
management within a HE organisation
Projects have too often focused on delivering benefits at the operational level
Academic Unit 1
CEO
Administration
HR StudentFinance
Academic Unit n ITExternal Affairs
Business Units Service Units
Strategic
Operational
Traditional Focus of Projects
IT
Section A: Directions in modern project management
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A new focus on ROI
StrategicBenefits
Positioning the institution Technology enabling change Strategic alliances and Joint Ventures Better financial & administrative performance Improving services to our various stakeholders
Business & Academic Unit /
TacticalBenefits
OperationalBenefits
Why invest in projects? It’s more than just better technology & saving fte!
Section A: Directions in modern project management
Increased research opportunities Improved communication & collaboration Improved services to the student New opportunities in Teaching & Learning New business opportunities Raising the academic profile ‘Ubiquitous connectivity’ enhances academic independence
Improved business process efficiency Greater process automation Eliminating waste, duplication & re-work Improving services to users & end-users Re-allocating resources to more productive tasks
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Types of Projects
Business / Organisation change• Re-structuring the organisation• Implementing new methodologies• New business & academic initiatives
Technology• Infrastructure• Systems Integration• Communications• T&L technologies• Web-based services
Process improvement• Business Process Re-engineering• Management Improvement
Academic Projects
• New / updated Learning Programs• Implementing Learning Technologies• Research Projects• Academic ventures
Marketing & Promotion• Marketing & promotion campaigns
• Market & industry research
Business Venture
There are more than just IT projects
• Joint ventures• In-sourcing• Business Development
Section A: Directions in modern project management
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Projects are, firstly, Business Projects
‘End-to-end’ Project
IT Project*
Business Process
Re-engineeringProject*
Implementation Project*
* - examples only
The ‘End-to-end project’ is designed to deliver business benefits
The project is made up of component projects which are aligned with broad areas of responsibility
Overall accountability resides at a single point
The Project Sponsor is whoever will receive the greatest benefits
Most organizational projects are business projects with a significant technology component.
Section A: Directions in modern project management
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1. Supportive & knowledgeable management
2. Good Project Management Practices
3. Good Project Methods
4. Skilled Project Managers
They have achieved appropriate competency Know what they’re doing & keep focused Recognised as professionals
Commit to their accountabilities Appropriate resourcing & funding Issues resolution - decision making Know & understand ‘Project Dynamics’
Stakeholder management Risk management Quality Management Planning (especially estimating & scheduling) Scope creep kept under control
Best Practice ‘know-how’
What Delivers Success
Section A: Directions in modern project management
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Organization Maturity
Individuals’ Competencies
Effective Projects
The combination of the ‘culture’ and practices of the organization along with the sum competencies of the individuals in a project governance position (not just the project manager) deliver effective projects.
Delivering more successful projects requires a happy marriage of the right organization maturity and the right level of individuals’ competencies.
How we deliver more effective projects
Section A: Directions in modern project management
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seat of the pants
Projects just ‘happen’ Poor project initiation Inadequate buy-in Poor communication Inter-dependencies not
managed Insufficient planning Unknown benefits Poor standards (if any)
Success rate less than 40%
aware
competent
best practice
Projects formally initiated Plans endorsed Varying standards with few
disciplines Methodologies introduced Stakeholders managed Projects become business-
driven
Success rate less than 60%
Methodology & standards well established & supported
Stakeholders understand & accept accountabilities
Discrete measures support good management
End-to-end projects set up & managed as such
Risks clearly defined & controlled
Project Management accepted as profession
Success rate less than 75%
Improvement programs formal
Good measurement enables optimization
High risk projects successfully managed
Respect & support of projects
Success rate better than 75%
This model is meant to give a very quick ‘snap-shot’ of an organization’s maturity in regards to its ability to effectively manage projects. The model relies on a fairly subjective assessment of a number of indicators which point to the overall maturity of the organization.
Section A: Directions in modern project management
Organisation maturity in managing projects
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Gen
eric
Man
agem
ent
Socio-cultural
Specialist Project Management
• Empathy• Cultural awareness• Respect and equity• Awareness of the
environment• Social fairness
• Financial management• Resource management• HR management• Business Planning• Operational management
• Scope management• Stakeholder management• Risk management• Communication management
• Time management• Quality management• Vendor & contract management• Specialist resource & HR management
All those in a Project Governance position are both aware of the responsibilities of their position, and confident they have the necessary competencies to meet those responsibilities.
Section A: Directions in modern project management
Competency-based management
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Project Dynamics
Scope & Size
Resources
Risk
Technology
Time Constraints
ManagementPractice
Quality
Budget
Project Impact
Project Dynamics describe the way various factors inter-relate in influencing project outcomes.
Predicting project outcomes is complex and is often counter-intuitive
Section A: Directions in modern project management
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Dynamics and Paradoxes
1. Projects do not perform as if they have a brake and accelerator.
2. Adding resources to a project can slow it down.
3. Taking resources away from a project can speed it up.
4. The more we measure where change comes from, the less change we will measure.
5. Putting a project ‘on hold’ is like being told to ‘breathe less’.
6. Good practice is ‘scaleable down’ but bad practice is not ‘scaleable up’.
7. Projects which include contingency take a shorter time than projects without contingency.
8. High risk projects are often more beneficial than no-risk projects.
Section A: Directions in modern project management
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Project Life Cycle
Start the Project
Execute the Project
Complete the Project
In its simplest representation, a project has 3 phases it passes through:
1. It has a start2. It has a middle (where a lot of work is done!)3. It has a finish
The application of the project life cycle to a particular project is called the Project Methodology
Section A: Directions in modern project management
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x = Actual cost / time
1.5x
0.5 x
0.8 x
1.3x
1.2x
Ove
r-e
stim
atin
gU
nd
er-e
stim
atin
g
0.25 x
0.7 x
Project Definitio
n or Business
Case
NOT > +/- 50%
NOT > +/- 30%
Project Initiation
A key objective for all project managers and senior management is to increase the accuracy of estimates as early as possible in the project cycle
All estimates should reflect a level of confidence
Start the Project
Execute the Project
Complete the Project
Section A: Directions in modern project management
Estimating Accuracy across the Project Life Cycle
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“If the old middle managers are dinosaurs, a new class of managerial mammal is evolving to fill the niche they once ruled: project managers”
Project Management – a new perspective
Section A: Directions in modern project management
The profile of Project Management is being elevated within organizations as it is increasingly seen as fundamental to organization success
Emergence of Strategic Project Management
Emergence of the Project-based Organisation
Seen as delivering a partnership between administration, business, academic groups, technology & vendors
It’s being seen as a profession, with defined career paths and competency-based accreditation
The ‘dark science’ aspects are being replaced with practices based on performance & measurement
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Project Management – 2 fundamental questions
Section A: Directions in modern project management
There are 2 fundamental questions which need to be answered regarding organizational projects:
1. Are we running the right projects, with the right priorities for the right investment (people & $’s)?
and
2. As an organization, do we have the maturity and competency to run successful projects?
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The answers lie in understanding the new model
1. Strategic benefits were not targeted
2. Projects run in a stand-alone manner
3. Solutions were seen as technology solutions
4. The business case not fully understood
5. Management practice immature
6. Senior management were not involved enough
‘Old’ Model
Projects deliver the Strategic, Academic & Business Plans
Projects grouped under Programs
All projects are, firstly, business projects
The ROI is well understood AND realizable
Project Management is competent
Senior management involved and committed
‘New’ Model
Section A: Directions in modern project management
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1. Strategic Project Management
2. Portfolio & Program Management
3. Business-driven project management
4. The value for Princeton
Topics
The value of program & project management
Section B
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Program A
Project A1 Project An
Program X
Project X1 Project Xn
Portfolio of Programs and Projects
The Project Portfolio
1. The current approach is to group projects into programs, and define all of these in the organization's Project Portfolio
2. The aggregation of the projects into programs is known as the Project Portfolio
3. One way to view the Project Portfolio: it’s how we will deliver the Strategic Plan and component Academic, Research and Business Unit Plans
Section B: The value of program & project management
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Strategic Project Management
Strategic Project Management is a set of processes which ties the Project Portfolio directly to the Strategic and Business Plans:
Strategic & Business Planning
Build the Project
Portfolio
Run the Programs &
Projects
Monitor, Evaluate, Improve
1. The Portfolio is the prioritized list of Programs and Projects
2. The Portfolio is built each year BUT the cycle is repeated each quarter
3. The continual evaluation of project performance and success against the Business Plans ensures goals & targets are being met
4. The process supports the rigorous monitoring of claimed benefits and ROI as the projects are being run – NOT after projects have finished
Section B: The value of program & project management
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Strategic Plan
Academic Strategic Plan
Strategic Goal 1
Goal 2
Research Strategic Plan
Goal 3 Goal n
Programs relate to the Strategic Plans
IT Strategic Plan
Administration Strategic Plan
Program A Program B Program B Program N
Owner
X
X
X
X
X
X
X
Owner
Owner
Owner
X
Programs relate Business Plans to the
Strategic Plan
X
Section B: The value of program & project management
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Portfolio
Program A Academic Units
HR
Project 1
Project 2
IT
Project 3
Finance
Benefits /Commitments
Benefits /Commitments
Benefits /Commitments
Benefits /Commitments
Benefits /Commitments
Benefits /Commitments
Benefits /Commitments
Benefits /Commitments
Benefits /Commitments
Benefits /Commitments
Benefits /Commitments
Benefits /Commitments
Programs & projects are functional in nature
Section B: The value of program & project management
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Projects are grouped into Programs
Some reasons why structuring projects into programs makes
sense.
Projects relate to same / similar business objectives.
They may share scope.
They often impact the same part of the business in the same time-frame.
They probably share resources.
They may well be dependent of the same technology.
Project A Project B
Project C
Program X
Section B: The value of program & project management
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The value of program & project management
1. By relating programs to business & academic plans, their realization is controlled and more assured.
2. There is greater coordination across all the initiatives and projects running across the organization.
(‘the right hand DOES know what the left hand is doing’)
3. There is more effective use of scarce and valuable resources.
4. Greater coordination leads to less waste, shorter time frames and lower costs.
5. Decision-making becomes clearer and more effective.
6. Your people achieve greater satisfaction and less frustration.
7. Project success is enhanced and benefits realized.
Section B: The value of program & project management
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1. Key management roles
2. Principal accountabilities
3. Accountabilities across the Life Cycle:
• Project Start-up• Project Execution• Project Completion
TopicsSection C
The roles and responsibilities of
senior management in project success
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Key Management Roles
Section C: The roles & responsibilities of senior management in project success
The main Senior Management roles in Program & Project Management are:
Program Sponsor
Project Sponsor
Steering Committee Member
Take ownership for the delivery of strategic goals Chairs the Program Board.
Has overall accountability for ensuring the benefits of the Program are delivered
‘Owns’ the project. Funds the project. Chairs the SC. Sets direction and maintains the vision.
All projects need to be owned. Whoever has most to gain (& lose) is often the sponsor.
SC members are ‘key stakeholders’ and assist the Sponsor in decision-making and endorsing management deliverables.
Key stakeholders are those who, by definition, will cause project failure if they withdraw support.
Role Description Comments
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In influencing project success and benefits
realization, there is probably no more important
role than that of the Sponsor
How important is the Project Sponsor?
It is the Sponsor who sets the vision, defines the
goals and objectives, approves and owns the
scope and makes all the ‘big calls’.
Section C: The roles & responsibilities of senior management in project success
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Principal Accountabilities of the Sponsor
Section C: The roles & responsibilities of senior management in project success
1. Commit adequate funding against a business case.
2. Ensure project accountabilities defined and agreed. Buy-in has occurred.
3. Ensure appropriate Project Governance is set up.
4. Priorities delivery options.
5. Ensure the right business / academic resources are allocated.
6. Approve Scope and changes to Scope.
7. Approve all project plans and budgets.
8. Ensure critical issues and conflicts are effectively resolved.
9. Ensure good management is carried out. Drive this practice ‘top-down’.
10. Make sure that projects are tracked using ‘hard data’ - the Performance Indicators.
11. Initiate Project Reviews to identify any major issues & improvements.
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1. Make sure that scope is clearly and unambiguously defined.
2. Ensure accountabilities (R&R) are defined and agreed.
3. Agree to Project Governance (including make-up of the Steering Committee).
4. Define the Business Case: a valid & realizable ROI.
5. Make sure the business has the capability and resources to run the project successfully – especially key personnel are available.
5. Ensure the Project Plan (esp. cost and time estimates) are valid.
6. Review the Risk Plan and contingencies.
Accountabilities of the Sponsor at Project Start-up
Section C: The roles & responsibilities of senior management in project success
Start the Project
Execute the Project
Complete the Project
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Governance Models
Section C: The roles & responsibilities of senior management in project success
Project Governance Program Governance
Program Board
Program Sponsor
ProgramManager
Enterprise-wide Oversight Committee
Executive Sponsor
ProjectManager 2
ProjectManager 1
ProjectManager 3
Reference Group
Steering Committee
Sponsor
ProjectManager
Enterprise-wide Oversight Committee
Executive Sponsor
ProjectTeam
ProjectTeam
ProjectTeam
Reference Group
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Accountabilities of the Sponsor during Project Execution
Section C: The roles & responsibilities of senior management in project success
1. Attend Steering Committee meetings!
2. Have a 1-on-1 with the Project Manager to review status and resolve issues.
3. Ensure changes to scope are kept to a minimum and are ALWAYS agreed to.
4. Ensure that resourcing commitments are being met.
5. Ensure budget, time frames and objectives will all be met; if not, then ensure corrective action is taken.
6. Monitor the claimed benefits to ensure they remain valid.
Start the Project
Execute the Project
Complete the Project
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Accountabilities of the Sponsor at Project Completion
Section C: The roles & responsibilities of senior management in project success
At the end of the project:
1. Ensure Benefits Realization is carried out.
2. Sponsor a ‘Post Implementation Review’.
3. Oversee the hand-over from the project to the business / academic units.
3. Ensure improvements are made to management practice.
4. Share your experiences & knowledge with peers.
Start the Project
Execute the Project
Complete the Project
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at the end of the day...Managing successful projects is an
issue for the whole of Princeton.
The ability for continued growth,
meeting aggressive time frames and
achieving academic, research &
business objectives will all be boosted
by the application of good project
management practice.
Princeton has the opportunity to further
its reputation as being a truly excellent
organization.