Project Management Success

Project Management Success
by Jessie Warner

Jessie L. Warner, MBA and student of project management, writes about the foundational principles of project management that help make project managers and leaders more successful. He also publishes articles to help promote the need for and benefits of project management software.

Understanding Project Cost Management

30 November 2010 - POSTED by Jessie Warner

To continue my series on the nine project management knowledge areas, I would like to discuss the topic of project cost management. Cost management involves knowing the financial and human resources required to complete a project within an approved budget.

The PMBOK describes three areas or processes for effective cost management:

Estimate Costs
Determine Budget
Control Costs

Estimating the Costs

The first step in cost management is to estimate the costs of each activity in the project. Costs include both human resource and physical resource costs. Because this step often occurs in the planning phase, it is important to understand that the estimated costs are your “best guesses” at the actual costs of each activity.

To get a good guess at the costs you can use one of the following techniques:

Analogous Estimating: estimates are based on past projects. It uses actual costs from a similar finished project to estimate the costs of the new project. The accuracy of these estimates will depend on the similarities between the new project and the old project.
Parametric Modeling: estimates are based on mathematical formulas, typically following a Regression Analysis or Learning Curve model. The accuracy of these estimates depends on the assumptions made.
Bottom-up Estimating: estimates are based on individual work item cost and duration estimates. This involves estimating the smallest activities and then adding them up to create an estimate for the whole project.

Determining the Budget

Using your best-guess estimates, the next step is to create a realistic project budget. In this step, you will determine the cost baseline and the funding requirements for the project. A good project budget will help you make key decisions with respect to the project schedule and resource allocation constraints.

To determine the project budget, the PMBOK suggests using several techniques:

Cost Aggregation: requires you to aggregate or combine costs from an activity level to a work package level. The final sum of the cost estimates is applied to the cost baseline.
Reserve Analysis: requires you to create a buffer or reserve to protect against cost overruns. The degree of protection should be equivalent to the risk foreseen in the project. The buffer is part of the project budget, but not included in the project baseline.
Historical Data: requires you to think about estimates from closed projects to determine the budget of the new project. This is very similar to analogous estimation described earlier.
Funding Limit Reconciliation: requires you to adhere to the constraints imposed by the funding limit. The funding limit is based on the limited amount of cash dedicated to your project. To avoid large variations in the expenditure of project funds, you may need to revise the project schedule or the use of project resources.

Controlling the Costs

Good project managers will carefully monitor the cost of their projects. This includes watching to see where actual cost has varied from estimated cost. Cost control also involves informing the stakeholders of cost discrepancies that vary too much from the budgeted cost.

To effectively control project costs, you will need to regularly monitor and measure the performance of the budget and revise forecasts as required. The PMBOK suggests several tools and techniques to help control costs:

Earned Value Management: uses a set of formulas to help measure the progress of a project against the plan.
Forecasting: uses the current financial situation to project future costs. The forecast is based on budgeted cost, total estimated cost, cost commitments, cost to date, and any over or under budgeted costs.
To-Complete Performance Index (TCPI): represents the level of project performance that future work needs to be implemented to meet the budget.
Variance Analysis: involves analyzing the difference or variance between the budgeted costs and the actual costs to indicate whether the project is on budget.
Performance Reviews: used to check the health of a project. Includes an analysis of project costs, schedule, scope, quality, and team morale.

By learning how to estimate costs, determine budgets, and control costs, you can be a better project manager and leader. Effective cost management will you help you get projects done on time and under budget, the golden ticket for any successful project manager.

0 Comments »

Four Steps to Project Time Management

15 November 2010 - POSTED by Jessie Warner

The knowledge area of time management typically refers to "the skills, tools, and techniques used to manage time when accomplishing specific tasks, projects, and goals." To become an effective time manager, you should be able to clearly understand the activities of the project and have the necessary skill set to plan, schedule, and control a project timeline. Along with these skills, you must also be able to utilize time management tools to help you analyze, measure, and assess your time management techniques. Keeping all of this in mind, may I suggest four steps to help with project time management?

1. Define the Activities
2. Sequence the Activities
3. Estimate Activity Resources
4. Develop and Control the Schedule

1. Define the Activities. This step requires you to define the tasks, milestones, and other activities needed to complete the project. Start with a basic definition of each task and fill in the details as the project gets fleshed out.

A Gantt chart is a simple and quick way to outline the entire project. Use the Gantt chart to add tasks and their estimated timeframes. Don’t worry about dates at this point, but rather focus on the time it will take to complete each individual task.

2. Sequence the Activities. Once the activities have been defined, you can start putting the activities in order. Without worrying about dates, order the activities in a way that makes the most sense to you. Create subtasks as needed and organize the project in a logical manner.

Once you have the activities in order, add dependencies to each task. Using dependencies, rather than dates, will help you see the true timeline of the project. For example, if you are building a website, you’ll need to design the website before you can start developing it. The design activity is a prerequisite to the development activity. If the design activity is completed later than expected, the development activity will also be pushed out to a later date.

3. Estimate Activity Resources. This step is one of the more challenging steps because it requires you to assess the supply and demand of each resource/person and how it relates to your specific project. Do you have enough resources to complete the assignment as scheduled or do you need additional resources?

Assign specific people or job roles to each task and then revise the dependencies based on the resource allocation. If a Programmer is required for 15 activities and 10 of them overlap, then you can either hire an additional Programmer or accept that the project timeline will be pushed out further based on the resource dependencies.

4. Develop and Control the Schedule. If you used a Gantt Chart to create the project timeline, it should be fairly easy to develop a project schedule. Review the Gantt chart with the entire team and make sure you have complete buy-in before you start the project. Everybody should understand their role in the project and should be able to confidently commit to the timeline.

Controlling the schedule is a lot harder than planning the schedule and requires more one-on-one management than you might expect. The project manager should be carefully monitoring the status of the project and verifying that the activities are being completed on time and within scope.

Note: Many service-oriented companies may also require time to be entered for each task. Ensuring that the hours are entered when the activity is completed will save you a lot of time and headache when you get ready to send the invoice. An integrated project management tool can really help here.

0 Comments »

Best Practices for Scope Management

18 October 2010 - POSTED by Jessie Warner

The knowledge area of Scope Management is all about making sure that the project includes only the work required to complete the project successfully. To be effective at scope management, you must learn to control what is and what is not in the scope of the project. Below are some of the best practices for successful scope management.

1.    Collect Project Requirements
2.    Define the Scope
3.    Create a Work Breakdown Structure
4.    Verify the Scope and Get Feedback
5.    Monitor and Control the Scope

Collect Project Requirements

The ability to define and then effectively control the scope of a project depends a lot on the goals and requirements of the project. For this reason, you need to gather the necessary information up front, before you ever start the project. By clearly understanding the needs of the stakeholders and the capabilities and constraints of your resources, you have a higher chance to succeed.

The easiest way to collect the project requirements is to perform interviews with the key stakeholders. Ask questions about their views of the finished product, the deliverables they expect to receive, and the schedule of the project. Once you have the information you need, you may want to create a Scope Management Plan to define the processes that will be followed in defining scope, documenting scope, verifying and accepting scope, and managing change requests.

Define the Scope

The scope of a project typically consists of a set of deliverables, an assigned budget, and an expected closure time. The previously collected project requirements will help you define the scope. Be sure to write down exactly what the project will entail and what it will not entail. Any amount of variation in the scope of the project can affect the project schedule, budget, and ultimately the success of the project. Getting a clear and concise definition of the scope will help you manage changes as they occur. With a clear scope definition, you can simply ask the question, “Does this change fall within the scope of the project?” If the answer is yes, then vet and approve the change. If the answer is no, then put a pin it and save it for another time or project.

Create a Work Breakdown Schedule

A work breakdown structure or WBS is a graphical representation of the hierarchy of the project. The WBS forces the project team to think through all levels of the project and identify the major tasks that need to be performed for the project to be completed on time. By starting with the end objective and then successively subdividing it into manageable steps or components in terms of size, duration, and responsibility, the WBS provides a high level view of the entire project. Furthermore, the framework makes planning and controlling the scope of the project much easier since you have a graphical chart to reference point for the tasks and subtasks needed for each phase of the project. As a general rule of thumb, no task within the WBS should be less than 8 hours or more than 80 hours.

Verify the Scope and Get Feedback

Because projects are expected to meet strict deadlines, verifying the scope of the project is critical before and during the project cycle. Scope verification can be done after each major task or phase is completed or if it is a smaller project, after the project has been completed. To verify the scope, meet with the project customer or stakeholder and get him/her to formally accept the project deliverables. This includes getting a written acceptance of the deliverables and requesting feedback on the work performed.

Getting feedback from the customer is an excellent way for you to improve processes and make sure the customer is happy with your work and the status of the project. The most important thing here is to communicate well and often. Verifying the scope and getting feedback will help you focus on customer acceptance, quality control, and verifying that work performed meets the definition of the scope of the project.

Monitor and Control the Scope

Now that the Scope has been clearly defined, a work breakdown structure has been organized, and the customer has formally accepted the scope of the project, it is time to actually manage and control the scope to avoid scope creep. Scope creep refers to the incremental expansion of the scope of the project, which may include and introduce more requirements that may not have been a part of the initial planning phases, but add costs and time to the original project.

To effectively monitor and control the scope of the project, make sure you have an established process for managing change requests. Any and all requests should be vetted and approved before they get introduced into the project. The budget and schedule of the project should also be altered to reflect the new changes. These changes should get a formal signoff from the customer or key stakeholder before proceeding. It is important that you closely monitor and control the scope to avoid disgruntled customers, higher than expected costs, and projects that aren’t completed on time.

0 Comments »

Four Keys to Integration Management

8 October 2010 - POSTED by Jessie Warner

Integration management is the knowledge area that includes processes that are required to ensure that all the projects components are coordinated correctly in order to achieve the project goals. To help you better coordinate and manage the various elements of the project, may I suggest four keys to integration management?

Get Buy-In
Create a Plan of Attack
Be Willing to Make Tradeoffs
Learn from Your Mistakes (and Successes)

Get Buy-In

For integration management to be effective, you need to get buy-in from key project stakeholders and team members. Getting buy-in from the get go will ensure that your project receives the support and funding needed for it to be successful.

To get buy-in, start by creating a project charter and a preliminary project scope statement. The project charter initiates the project and includes the necessary approvals and sanctions for the project. It gives the project manager authority to act and apply organizational resources to the project. The charter also defines the objectives and participants in a project, with the preliminary delineation of roles and responsibilities.

Along with the project charter, you will need to develop a preliminary project scope statement. This is a high level definition of the project scope and defines the reasons for undertaking the project, the objectives and constraints of the project, directions concerning the solution, and identifies the main stakeholders. The document further defines the project’s product or service, methods for approval, and tactical strategies for the change control process.

With the project charter and preliminary project scope statement in hand, you have the ammunition, and most importantly, the authority to guarantee that resources are coordinated and scheduled in the manner and time you request.

Create a Plan of Attack

Now that you have a project charter and the objectives of the project have been clearly defined, it is time to create a plan of attack. Start by identifying the activities needed to effectively execute, manage, and monitor the project. Project management software can really help with this step and allows you to plan and monitor the project from anywhere at anytime. The software helps you create the project timeline and tasks, allocate the required resources, and get the day-to-day status updates needed to effectively manage the project.

As you develop your plan, verify that your team is all on the same page. Make sure each team member can login to the project management software and ensure that they all know how to update their task completion status. Performing this simple step will make reporting and monitoring more accurate and timely.

Be Willing to Make Tradeoffs

One of the biggest challenges you will face in executing the project is managing people, their opinions, and the changes they request. For you to be effective, you must be willing to make tradeoffs. Everybody won’t get everything they want, but the project should meet the objectives and requirements established in the project charter.

Orchestrate how the project team implements the project plan and make sure they complete the work required in the Project Scope Statement. Monitor and control the project work by measuring and balancing the progress of the project. Take corrective or preventative actions as needed to assure that all project objectives are being met.

Use the pre-established process for change requests and ensure that all changes go through the proper channels before they become a part of the plan. Evaluate all change requests and approve those changes that will help you meet the project objectives. Only validated and approved changes should be implemented.

Learn from Your Mistakes (and Successes)

Hopefully, before you ever started the project, you clearly defined what it means for the project to be "officially" complete. As you close the project, verify that all of the project activities are complete and that the final product or service meets the expectations of the client and/or stakeholders. Obtain a written approval of the project completion.

Once the project has been formally closed, it is now time to learn from your mistakes and successes. Organize a formal review meeting and hold a brainstorming session where you list all of the mistakes made during the project. Now make a list of all the things that went right. How can you learn from this experience? What are the takeaways from project and how can you prepare for these challenges in your next project? This exercise will build team comradery and will help you be more effective in your next project.

Watch for my next article about the five best practices for scope management.

0 Comments »

Project Management Knowledge Areas

30 September 2010 - POSTED by Jessie Warner

The PMBOK describes nine knowledge areas or categories of the project management discipline. Gaining expertise in any one of these knowledge areas can help you become a rock star in your organization. Understanding and applying all nine will make you irreplaceable. Throughout my next series of articles, I will be discussing each area in detail and identifying specific examples and techniques to help you become that irreplaceable rock star.

To begin this new series, I want to reference Kathy Schwalbe, Ph.D, PMP, and professor at Augsburg College in Minneapolis, Minnesota. As an active member of the PMI and an expert in the industry, she has written several textbooks and how-to guides on the subject. In her book “Information Technology Project Management," she describes each of the nine knowledge areas and identifies some of the tools and techniques used in each area. These knowledge areas include:

1. Integration Management – Project selection methods, project management methodologies, stakeholder analyses, project charters, project management plans, project management software, change requests, change control boards, project review meetings, and lessons-learned reports.
2. Scope Management – Scope statements, work breakdown structures, mind maps, statements of work, requirements analyses, scope management plans, scope verification techniques, and scope change controls.
3. Time Management – Gantt charts, project network diagrams, critical-path analyses, crashing, fast-tracking, schedule performance measurements.
4. Cost Management – Net present value, return on investment, payback analyses, earned value management, project portfolio management, cost estimates, cost management plans, and cost baselines.
5. Quality Management – Quality metrics, checklists, quality control charts, Pareto diagrams, fishbone diagrams, maturity models, and statistical models.
6. Human Resource Management – Motivation techniques, empathic listening, responsibility assignment matrices, project organizational charts, resource histograms, and team building exercises.
7. Communications Management – Communications management plans, kickoff meetings, conflict management, communications media selection, status and progress reports, virtual communications, templates, and project web sites.
8. Risk Management – Risk management plans, risk registers, probability/impact matrices, and risk rankings.
9. Procurement Management – Make-or-buy analyses, contracts, request for proposals or quotes, source selections, supplier evaluation matrices.*

*Schwalbe, Information Technology Project Management, Sixth Edition, 2010.

Stay tuned for my next article about Integration Management in which I will identify four keys to help you better integrate projects, resources, and people into your work management process.

0 Comments »

The Underlying Assumptions of PPM

24 August 2010 - POSTED by Jessie Warner

Many organizations want to go straight from spreadsheets to PPM without ever understanding the fundamental principles that govern project portfolio management. May I suggest five underlying assumptions that must be in place for organizations to fully adapt the PPM methodology? *

Five Underlying Assumptions of PPM:

Employees have a basic understanding of project management principles
The staff has a desire to select projects based on a structured system
The organization has a process for evaluating project performance based on specific goals and commitments
A team is created for portfolio governance
The organization has project management tools that support PPM functions

First, for an organization to effectively implement PPM it must have a staff that is capable of managing and supporting the process. This is often accomplished through the creation of a centralized project management office or PMO. The PMO consists of professional employees that understand the basic principles of project management and have the required knowledge and capabilities to create and manage a system for project standardization and consistency.

Second, once a PMO has been created, or a similar department or group, the PMO must have a desire to develop a structured approach to selecting projects. This approach should be based on a fair and balanced ranking system, one that selects projects based on a clear set of criteria and objectives. The projects selected should be aligned with business strategies and placed in portfolios that represent the tactical implementations of such strategies.

Third, after projects have been selected for the portfolio, they must be managed using a process that evaluates project performance based on specific goals and commitments. The PMO must be able to assess the ability of the project to continue to meet the original selection criteria. Projects that fail to provide adequate value or are inefficiently using resources must be delayed or terminated based on the established culture and practices of the PMO.

Fourth, in addition to the creation of a PMO or project group, new roles will need to be created to govern PPM and monitor the performance of the project portfolios. This team will be able to act for senior executives (or may include the executives) to oversee the portfolios.

Fifth, the PMO should review its current project management tools for support of the new PPM functions. If the existing software does not support PPM or doesn’t provide the functionality needed, the PMO should evaluate alternatives and choose a set of tools that best fits the organization’s goals and processes.

In conclusion, if an organization is seriously considering a move to PPM or is looking to improve its PPM processes, it must build a foundation that adheres to the underlying assumptions of project portfolio management.

*Adapted from “Project Portfolio Management” by Harvey Levine, pgs. 29-30.

0 Comments »

Selecting Projects for Your Pipeline

5 August 2010 - POSTED by Jessie Warner

Harvey Levine, in his book Project Portfolio Management, discusses the processes that comprise PPM. On page 24, he provides some great insight into how projects should be selected for the pipeline. He explains that during the selection phase you should establish a structured process to:

Guide the preparation of project proposals (business case) so that they can be evaluated.
Evaluate project value and benefits.
Appraise the risks that might modify these benefits.
Align candidate projects with enterprise strategies.
Determine the most favorable use of resources.
Rank projects according to a set of selection criteria.
Select projects for the portfolio.

By establishing a clear process for project selection, you have created a template that can be used for all future projects. The best way to establish this process is to create it using an online project and portfolio management tool. With PPM software, you have a central repository of information and quick access to all of the projects within your portfolio.

The software allows you to create a project or process template that outlines the steps needed to properly prepare a business case, evaluate project value and benefits, and align the project with enterprise objectives. The criteria you establish in the beginning will make it easy for you to measure risk, rank projects, and determine the most favorable use of resources.

0 Comments »

Project Portfolio Management – Projects Must Position the Firm for Future Success

3 August 2010 - POSTED by Jessie Warner

This is the last article in a series of articles discussing how to effectively use project portfolio management in your business. In this article, I want to talk about how projects should contribute to the firm’s health and help position the firm for future success.

Remember, for project portfolio management to be effective, projects must:

1. Be aligned with the firm’s strategy and goals
2. Be consistent with the firm’s values and culture
3. Contribute (directly or indirectly) to a positive cash flow for the enterprise.
4. Effectively use the firm’s resources—both people and resources
5. Not only provide for current contributions to the firm’s health but must help to position the firm for future success.

Projects Must Contribute to the Firm’s Health

When we talk about a firm’s health, we are typically referring to the financial stability of the company. In an article by Lynn Westergard titled “Measuring Company Health Via Cash Flow Ratios” he refers to the Statement of Cash Flows as being the best indicator for measuring health. “The most useful cash flow ratios fall into two general categories. The first group consists of ratios that test for solvency and liquidity: operating cash flow, fund flow coverage, cash interest coverage and cash debt coverage. The second group of ratios indicates the viability of a business as an ongoing concern. It includes "cash to capital expenditures" (CE) and "cash to total debt" (TD) ratios.”

Without going into a class on how to interpret financial statements, let’s summarize what Lynn Westergard said by simply stating that for a firm to be healthy it must be able to meet its current liabilities and be in a position to finance its future growth. Because projects are often resource and cash intensive, selecting the right projects are key to the health of the firm. Projects that contribute to the financial stability of the company provide additional cash flow and financial leverage to help the company be profitable today and in the future. Selecting the wrong projects can cause unnecessary debt in both the short-term and long-term, as well as significantly impact the firm’s ability to grow.

Projects Must Help Position the Firm for Future Success

Along with their ability to contribute to the firm’s current health, projects must help position the firm for future success. Below are few questions to consider when selecting projects:

Will this project provide a competitive advantage for my company?
Does the project enhance my product or service offering?
Can I use the project to demonstrate company stability?
Can I use the project as a reference to help me get more projects?
Does the project provide future cash flows to help sustain my company’s growth?
When can I expect a return on my investment? Is it a short-term or long-term return?

I’m sure that are many more questions you could ask, but the real point here is that for project portfolio management to be effective, you must consider the company’s future when selecting projects. Will it help the company be more successful or will it hurt the company?

0 Comments »

Project Portfolio Management – Projects Must Effectively Use the Firm’s Resources

28 July 2010 - POSTED by Jessie Warner

In my last article I talked about the need for projects to contribute to a positive cash flow. To continue with the series, I want to talk about some ways to effectively use a firm’s resources. Remember, for project portfolio management to be effective, projects must:

Be aligned with the firm’s strategy and goals
Be consistent with the firm’s values and culture
Contribute (directly or indirectly) to a positive cash flow for the enterprise.
Effectively use the firm’s resources—both people and resources
Not only provide for current contributions to the firm’s health but must help to position the firm for future success.

Projects Must Effectively Use the Firm’s Resources

In project management, resources are often referred to as anything required to complete a project task. This includes people, equipment, facilities, funding, or practically anything else capable of a definition. For project portfolio management to be effective, managers must learn to manage, allocate, schedule, and otherwise optimize the use of the firm’s resources.

Here are a few ideas to help your company manage resources better:

1. Use Project Portfolio Management Software

With such a broad definition of resources, you need to be able to quickly and effectively move around resources to meet the varying needs of each project. The best way to do this is to let project management software do the work for you. With project management software, you can manage multiple projects from a single location. Good software allows you to quickly create projects and task lists, organize teams, and better control the flow of information and resources, saving you valuable time and money.

2. Organize Your Resources

One of the big advantages of using project management software is that it lets you organize your resources in a way that is simple and intuitive. Start by creating a simple organizational chart. Identify every employee, assign job roles, list skills and talents, and enter their current work schedule. By correctly identifying every employee and their role in the business, you can simply drag and drop users or roles into the various projects.

3. Establish Processes

Now that your resources have been organized, it is time to create project templates and establish workflow processes. Project templates are an easy way to layout routine projects. They identify the tasks, job roles, and scheduling requirements needed to complete the projects. These templates can increase productivity and shorten the time it takes to setup and manage projects.

When establishing the processes, be sure to identify the job roles needed to complete the various steps. If your software is setup correctly, you should be able to simply drag a user with the given job role and place him/her into the process. That user is then automatically scheduled to work for a given period of time and the resource grid will show him/her as being unavailable during that time frame.

4. Manage Resource Conflicts

Resource Management Resource grids let you see in a calendar where your team is over- or under-utilized and where each team member is allocated. By seeing each team member, you can quickly identify resource conflicts and then resolve those conflicts with the Resource Leveling tool. With the click of a button, resources are reallocated and project completion dates are automatically adjusted to accommodate for the new resource restrictions. Additionally, the Capacity Planner lets you see the impact of adding to or changing your current plan. You can adjust the schedule or the resource budget and push your changes "downstream" to your project managers.

Conclusion

By following the steps listed above, your company will be in a better position to select projects that effectively use your firm’s resources. Project portfolio management is about choosing the right projects at the right time. As your company better understands and manages its resources, it will be in a better position to select projects that fully utilize its available resources.

1 Comment »