What’s Different Project Management in the Public Sector John Alley, Director PMO, McMaster PSPMF...
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Transcript of What’s Different Project Management in the Public Sector John Alley, Director PMO, McMaster PSPMF...
What’s Different
Project Management
in the Public Sector
John Alley, Director PMO, McMaster PSPMF - Sept 2008
Key Learning Points
• key differences for project management in the public sector
• how Project Managers can deal with those differences and succeed on public sector projects
• how a PMO can foster success given these differences
What is the Public Sector?
Public Sector Private Sector
An organization funded (mostly) by the public to provide service for the public.
Gover
nmen
ts (F
eder
al,
Provin
cial, M
unici
pal)
Higher
Edu
catio
n
Health
Car
e
Profit
Seekin
g
Utilitie
s
Charit
ies
Crown
Corpo
ratio
ns
“a degree of unlikeness” Concise Oxford Dictionary, 1990
• difference in kind
• difference in degree
Differences
Differences are important
• differences lead to different actions
• what about PM maturity?
• differences run deeper
What’s Different for Public Sector Projects
Resourcing
What’s Different?
• sources of project financing
Public Sector
Private SectorTaxes, Grants
Earned Revenue,
Capital Markets
More on FinancingPrivate Sector • profit seeking• grow or die• uses capital market• define a hurdle rate• find funds for any
project that benefits the bottom line
Public Sector• provide services the
market can’t• resist growth• rarely use capital
market• what’s a hurdle rate?• select the ‘best’
projects that fit the available funds
What’s Different – Constraints
• resources– fixed pot for all projects– every project will have limited funds
• time– legislated deadlines– political deadlines
• scope– usually starts at the minimum
What’s Different – Constraints
• many projects are triple constrained
• contingency• risks• quality of estimates
Resources – Thrive as a PM
• address the triple constraint:– seek a charter that identifies which one can be
adjusted– focus on risk analysis– make your estimates realistic
• understand the priority of your project among others and the strategic alignment
• know the business benefits and find ways to deliver benefits in stages
Resources – PMO Adds Value
• resist “On time, on scope, on budget”
• adopt a charter format that identifies the priorities among time, scope and resources
• pooled contingencies, risk analysis and stretch objectives
What’s Different for Public Sector Projects
Estimating
What’s Different?
• Size
• Scope of activity (for a given size)
Public Sector
Private Sector
Large Small
Public Sector
Private Sector
Complex Simple
What’s Different - Complexity
City of Hamilton• police• fire• bylaw enforcement• parks• recreation services• garbage collection• sewer services• roads• planning services• … and more
McMaster• 25,000 student school• 3400 bed residence• 18 food outlets• athletic club• parking service• bookstore• library• computer labs• health clinic• print shop • and more ….
What’s Different – Estimating
• many factors lead to low estimates– cost constraint– inexperienced
estimators– resource expertise– business complexity
Estimator
ExperienceResource
Expertise
Achievable
PredictableScope
Clarity
Speed of
Delivery
Cost
Constraints
Estimate
Estimating – Thrive as a PM
• use parametric tools
• get an independent assessment
• build on your history
• allow for costs of change management
Estimating – PMO Adds Value
• post-project reviews better estimates
• build standard estimates for key components– internal approvals– acquisitions– security testing
• build in gates as opportunities for re-estimating
What’s Different for Public Sector Projects
Acquisitions
What’s Different - Acquisitions
Bellamy Inquiry
MFP Leasing
Toronto Tax System
What’s Different – Acquisitions
• purchasing policy
– open and accountable process– accessible to all vendors– issues of interprovincial trade– clear and open selection– get the best value for public funds
What’s Different – Acquisitions
• limited exceptions for sole source– defined criteria– get the best value
• approvals are based on $ limits– defines accountability– limits risk
• the process takes time
Acquisitions – Thrive as a PM• know the rules - the $ limits and the
process for each
• allow sufficient time/cost/effort to follow the process
• maintain meticulous records
• the process protects the PM
Acquisitions – PMO Adds Value
PMO can build in compliance
– build the process into templates
– define standard time/cost/resources for each variation
– provide training on the process for PMs
What’s Different for Public Sector Projects
GovernanceStrategic alignment
Stakeholders
Decision-making
Project Selection
What’s Different for Public Sector Projects
GovernanceStrategic alignment
Stakeholders
Decision-making
Project Selection
What’s Different – Strategic Alignment
Strategy
Strategic
Programs
Projects
Top-Down Bubble Up
Private Sector
Public Sector
Strategic alignment – Thrive as a PM
• Emphasize alignment in business case, charter and communications
• Understand competing priorities – slower pace for lower priorities
• break projects into smaller components – fit in as resources permit
– allow for benefits even if terminated early
Strategic alignment – PMO Adds Value
• promote strategic alignment of projects
• document and communicate priorities
• promote smaller projects
What’s Different for Public Sector Projects
GovernanceStrategic alignment
Stakeholders
Decision-making
Project Selection
What’s Different - Stakeholders
Private Sector Public Sector
Internal Stakeholders
Owners / Shareholders The public Elected Officials as individuals
Board of Directors Board of Directors / Cabinet / Council / Board of Governors / Senate
Finance Committee Finance Committee
Sponsor SponsorTeam members Team members
Management Management
Employees Employees
Internal customers Internal customers
Internal Audit Internal Audit
What’s Different - Stakeholders
Private Sector Public SectorExternal Stakeholders
Customers CustomersExternal Team Members External Team Members
Labour Unions Labour Unions
Suppliers Suppliers
Consultants Consultants
Consumer Groups Consumer Groups
Special Interest Groups Special Interest GroupsTaxpayers Taxpayers
Government Government – other levels/ branches
Financial institutions Financial institutions
Stock analyst/Bond rating service Bond rating service
Stakeholders – Thrive as a PM• Understand the importance of
– taxpayers– other branches and levels of government – special interest groups
• Communication plan to address stakeholders
Stakeholders – PMO Adds Value
• stakeholder analysis templates
• communication plan templates
• peer reviews / steering committee review
What’s Different for Public Sector Projects
GovernanceStrategic alignment
Stakeholders
Decision-making
Project Selection
What’s Different – Decision Making
ManagementEdict
ConsensusPrivate Sector
Public Sector
Decision-making – Thrive as a PM
• define who makes decisions and how
• make decision points visible
• apply facilitation techniques / creative problem-solving
Decision-making – PMO Adds Value
• develop standards for decision-making
• develop standard oversight structures– Project Selection Board– Steering Committees
• train your sponsors and managers
What’s Different for Public Sector Projects
GovernanceStrategic alignment
Stakeholders
Decision-making
Project Selection
What’s Different – Project Selection
QuantitativeCriteria
Qualitative CriteriaPrivate Sector
Public Sector
What’s Different – Project Selection
• the public sector provides services the market can’t– fire-fighting– roads– courts
• but what about private garbage collection, the 407, private prisons?
• what is the ROI on these services?
What’s Different – Project Selection
• quantitative vs qualitative criteria
• how do we compare services?– eg: fire fighting vs seniors’ recreation
• how do we balance service improvements, cost savings and legislated requirements?
• how do we align with strategy?
What’s Different – Project Selection
• How do we weigh the importance of each criterion?
Strategy
Cost
Savings
Cost
Avoidance
And
many
more …
Security
Service
Capability
Selection
Project selection – Thrive as a PM
• much of this is beyond the scope of a Project Manager
• define metrics that align with selection critieria
• ensure outcomes / benefits are clearly defined
Project Selection – PMO Adds Value
25% strategic fit
25% business case / service improvement
25% capacity, security, adherence to standards, project risk
25% corporate risk reduction
20% strategic fit
20% business case
20% value to external clients
20% sponsor commitment
20% project risk
facilitate consensus on a selection model
2 examples:
Project Selection – PMO Adds Value
• standard project proposal format– strategic fit built in– accountability built in
• standard valuation for– customer service improvement– cost reduction / avoidance– qualitative benefits
What’s Different for Projects?• Resources (Financing) – the triple constraint• Acquisition – policies / time• Estimating – second opinions• Governance
– Strategic alignment – metrics – Stakeholders – templates – Decision-making – define who and how– Project selection – define criteria / qualitative
Key Learning Points
• key differences for project management in the public sector
• how Project Managers can deal with those differences and succeed on public sector projects
• how a PMO can foster success given these differences
Questions?
John Alley, Director PMO, McMaster PSPMF - Sept [email protected]