lessons in project management - 7 - project performance management
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International Project Management
Prof. Dr. Frank Habermann
Lecture 7 –
Project Performance Management
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Understanding project related sub-systems
Basic performance management model
– Reporting project prgress
– Controlling project progress
Project portfolio management model
Enterprise project management model
Content
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Performance against
what?
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Remember lecture#1:Each project is a system
Each system has a certain structure shows specific behavior!
Sub System C
Sub System B
Sub System A
SYSTEM
Sub-subSystem C1
Sub-subSystem C2
. . .
Static relationships(composition/decomposition)
system(element)
INPUT OUTPUT
acting as „receiver“(customer)
acting as „sender“(provider)
Dynamic relationships(communication/collaboration)
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Remember lecture #5: Breaking down the project in sub-systems
Processes & Tasks work breakdown structure
workpackage
task
subproject
project
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Remember lecture #5: Breaking down the project in sub-systems
Processes & Tasks work breakdown structure
workpackage
task
subproject
project
measurable items!
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projectmanager
Organizing interrelated sub-systems
Processes & Tasks work breakdown structure
workpackage
task
subproject
Roles & Responsibilitiesorganisational structure
project
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projectmanager
Organizing interrelated sub-systems
Processes & Tasks work breakdown structure
workpackage
task
subproject
Roles & Responsibilitiesorganisational structure
spmanager
wpowner
taskowner
project
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projectmanager
Organizing interrelated sub-systems
Processes & Tasks work breakdown structure
workpackage
task
subproject
Roles & Responsibilitiesorganisational structure
spmanager
wpowner
taskowner
Resources & Toolsproject goal structure
Project goals
TC
Q
project
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projectmanager
Organizing interrelated sub-systems
Processes & Taskswork breakdown structure
workpackage
task
subproject
Roles & Responsibilitiesorganisational structure
spmanager
wpowner
taskowner
Resources & Toolsproject goal structure
Project goals
TC
Q
spgoals
wpgoals
taskgoals
project
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Work PackageManagement
ProjectManagement
Project management model
Sub ProjectManagement
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Work PackageManagement
ProjectManagement
Project management model
Sub ProjectManagement
many
few
one
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Work PackageManagement
ProjectManagement
Project management model
Sub ProjectManagement
processes
people
tech
no
logy
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Work PackageManagement
ProjectManagement
Project management model
Sub ProjectManagement
processes
people
tech
no
logy
con
tro
llin
g
rep
ort
ing
define criteriaset parameters
monitor progress
collect dataanalyse information
communicate progress
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Reporting the project‘s
progress
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S/he who writes stays in the job!
Source: http://www.articlemarketinghq.com/wp-content/uploads/2010/12/writer.jpg
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Trivial reporting cycle
Source: http://www.projects.uts.edu.au/images/diagram16.gif
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More sophisticated reporting schedule
Once Daily Weekly At Phase Review
Source: http://www.jiscinfonet.ac.uk/images/report-schedule.png
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Remember lecture#2:Know your stakeholders and have a communication plan
Source: Verzuh, E., The Fast Forward MBA in Project Management, p. 74
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Controlling the project‘s
progress
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Right or wrong?
Source: http://www.aviationlawmonitor.com/uploads/image/a3-52_control_tower.jpg
The closer the deadline comes, the more importantis controlling project progress (in order to ensure success).
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Wrong!
Picture source: adapted from www.freakingnews.com/pictures/29500/Air-Traffic-Control-29849.jpg
But celebrate, even if your luck is undeserved…
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Project performance managementalready starts with the business case
Businesscase
Source: adapted from Craig Brown, Project Management, 9. Performance Management, received via www.slideshare.net on May 4, 2010
© Becota | www.becota.org | 2010
Project performance managementalready starts with the business case
WBSBusiness
case
Source: adapted from Craig Brown, Project Management, 9. Performance Management, received via www.slideshare.net on May 4, 2010
Plan
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Project performance managementalready starts with the business case
WBS
Projectplan
Budget
Businesscase
Delive-rables
Plan
Source: adapted from Craig Brown, Project Management, 9. Performance Management, received via www.slideshare.net on May 4, 2010
© Becota | www.becota.org | 2010
Project performance managementalready starts with the business case
WBS
Projectplan
Budget
Businesscase
Track taskduration
(gantt chart)
Track cost & effort
(time sheets)
Delive-rables
Track outputquality
(product models)
Control
Source: adapted from Craig Brown, Project Management, 9. Performance Management, received via www.slideshare.net on May 4, 2010
Plan
© Becota | www.becota.org | 2010
Project performance managementalready starts with the business case
WBS
Projectplan
Budget
Businesscase
Track taskduration
(gantt chart)
Track cost & effort
(time sheets)
Compareplan/model
to reality
Delive-rables
Track outputquality
(product models)
Source: adapted from Craig Brown, Project Management, 9. Performance Management, received via www.slideshare.net on May 4, 2010
Control
Plan
© Becota | www.becota.org | 2010
Project performance managementalready starts with the business case
WBS
Projectplan
Budget
Businesscase
Track taskduration
(gantt chart)
Track cost & effort
(time sheets)
Compareplan/model
to realityTake action
Delive-rables
Track outputquality
(product models)
Source: adapted from Craig Brown, Project Management, 9. Performance Management, received via www.slideshare.net on May 4, 2010
If there is no timeleft to take action,
controlling does notmake any sense!
Control
Plan
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Remember lecture#1:Standard project management life cycle
INITIATE RUN COMPLETE
Project Contract
Project Charter Rough
Require-ments
Definition
SolutionDocumentation
Test Plan Approvals
(technical &organizational)
Hand-overDocumention(e.g. Support
Info)
ClosureReport
ConceptualSolution(Models)
DetailedRequire-ments
Definition
TrainingPlan
Project Plan
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Project performance managementproceeds with detailed plans, models, and concepts
RoughRequire-ments
Definition SolutionDocumentation
Test Plan
ConceptualSolution(Models)
DetailedRequire-ments
Definition
TrainingPlan
Plan
RUN
© Becota | www.becota.org | 2010
Project performance managementproceeds with detailed plans, models, and concepts
RoughRequire-ments
Definition SolutionDocumentation
Test Plan
ConceptualSolution(Models)
DetailedRequire-ments
Definition
TrainingPlan
Compareplan/model
to realityTake action
Track output quality(product models)
Control
Plan
RUN
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Example for tracking time (activity-based)
Source: Figure 13.1 Baseline Gantt Chart (Gray & Larson, 2006, p414)
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Example for tracking time (activity-based)
Source: Figure 13.1 Baseline Gantt Chart (Gray & Larson, 2006, p414)
Alternative (simplified) approachusing the 0-50-100 rule:
0 = not started yet50 = started, but not completed*100 = completed
* Should not appearin a series of status reports
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Example for tracking time (cumulative)
Source: Figure 13.2 Project Schedule Control Chart (Gray & Larson, 2006, p415)
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Combining budget and schedule status to get a complete picture of the project
Earned value analysis
Schedule Budget
ahead
on
behind
under
on
over
© Becota GmbH | www.becota.com | 2010
Combining budget and schedule status to get a complete picture of the project
Earned value analysis
Schedule Budget
ahead
on
behind
under
on
over
3x3 = 9possible
combinations
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Cost variance: the difference between budgeted cost (also called„earned value“) and actual cost for the work completed
CV = BC – AC
» If CV positive => „under budget“ (GOOD)
» If CV negative => „over buget“ (BAD)
Important terms
© Becota GmbH | www.becota.com | 2010
Cost variance: the difference between budgeted cost (also called„earned value“) and actual cost for the work completed
CV = BC – AC
» If CV positive => „under budget“ (GOOD)
» If CV negative => „over buget“ (BAD)
Schedule variance: the difference between scheduled completion time andactual completion time of the activities performed
SV = ST – AT
» If SV positive => „ahead of schedule“ (GOOD)
» If SV negative => „behind schedule“ (BAD)
Important terms
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Cost and schedule performance chart
Source: http://pmtips.net/wp-content/uploads/2009/11/escalation-threshold.jpg
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Cost and schedule performance chart
Source: http://pmtips.net/wp-content/uploads/2009/11/escalation-threshold.jpg
P4
P3
P2
P1
Re P1 to P4:what is the least and what is the mostcritical project?
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Cost and schedule performance chart
Source: http://pmtips.net/wp-content/uploads/2009/11/escalation-threshold.jpg
GOOD
BAD
TRADE-OFF
TRADE-OFF
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Cost and schedule performance chart
Source: http://pmtips.net/wp-content/uploads/2009/11/escalation-threshold.jpg
Common business practice: grey shaded area representsvariance within the discretion of the project manager (i.e. not requiring any escalation)
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Now, let‘s take it to the
next
higher business
level
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Remember lecture#3:Project scoping and contracting
Business need & purpose
Project
Shall we initialize this project?
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Not every business need will lead to a project!
Need 1 Need 4
Need 3
Need 6
Need 7
Need 8
Need 9
Need 2
Need 5
…Need n
Project(s) ?
dozens/hundreds/thousands
single/some/X percent of…
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Not every business need will lead to a project!
Limitations- Money- Time- Resources
Strategic fit- Brands- Culture- Capabilities
Need 1 Need 4
Need 3
Need 6
Need 7
Need 8
Need 9
Need 2
Need 5
…Need n
Project(s)
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ProjectManagement
PortfolioManagement
Project portfolio management model
ProgramManagement
Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 360, 384
© Becota | www.becota.org | 2010
ProjectManagement
PortfolioManagement
Project portfolio management model
ProgramManagement
Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 360, 384
Main goalAlign project selection withbusiness strategy
Main tasks• Identify major stakeholders andcontinuously communicate portfolio(review, maintain, select alternatives)
• Define project governance factors andcorporate project standards
• Order and assess project requestsfrom the business (business cases)
• Assign project resources basedupon strategic priorities
• Optimize deployment of resourcesacross project boundaries
• Set up programs to enhanceeffectivity of interrelated projects
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Portfolio managementis based on strategic management methods
Competitive Forces
Strategy Map
SWOT Analysis
Balanced Scorecard
PortfolioManagement
ROI Analysis
… and many more!
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Project portfolio management as a process (part 1)
Source: adapted from Gray/Larson (2006), Figure 2.1 Strategic Management Process, p25
Reviewbusiness strategy
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Project portfolio management as a process (part 1)
Source: adapted from Gray/Larson (2006), Figure 2.1 Strategic Management Process, p25
Reviewbusiness strategy
Externalenvironment:opportunities,
threats
Internalenvironment:
strengths,weaknesses
Where arewe now?
© Becota | www.becota.org | 2010
Project portfolio management as a process (part 1)
Source: adapted from Gray/Larson (2006), Figure 2.1 Strategic Management Process, p25
Reviewbusiness strategy
Externalenvironment:opportunities,
threats
Internalenvironment:
strengths,weaknesses
Definemeasurable goals
Defineportfolio alternatives
Where arewe now?
Where do wewant to be?
© Becota | www.becota.org | 2010
Project portfolio management as a process (part 1)
Source: adapted from Gray/Larson (2006), Figure 2.1 Strategic Management Process, p25
Reviewbusiness strategy
Externalenvironment:opportunities,
threats
Internalenvironment:
strengths,weaknesses
Definemeasurable goals
Defineportfolio alternatives
Implementportfolio strategy
Selectprojects
Where arewe now?
Where do wewant to be?
How do weget there?
© Becota | www.becota.org | 2010
Project portfolio management as a process (part 1)
Reviewbusiness strategy
Externalenvironment:opportunities,
threats
Internalenvironment:
strengths,weaknesses
Definemeasurable goals
Defineportfolio alternatives
Implementportfolio strategy
Selectprojects
Where arewe now?
Where do wewant to be?
How do weget there?
© Becota | www.becota.org | 2010
Project portfolio management as a process (part 2)
Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385
CU
STO
MER
(Bu
sin
ess
)B
OA
RD
(Exe
cuti
ves)
PO
RTF
OLI
OM
anag
er(s
)O
PER
ATIO
NS
(Bu
sin
ess
)
© Becota | www.becota.org | 2010
Project portfolio management as a process (part 2)
Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385
CU
STO
MER
(Bu
sin
ess
)B
OA
RD
(Exe
cuti
ves)
PO
RTF
OLI
OM
anag
er(s
)O
PER
ATIO
NS
(Bu
sin
ess
)
Requesta project
Problem oropportunity!
business-internalpre-assessment
© Becota | www.becota.org | 2010
Project portfolio management as a process (part 2)
Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385
Collect andassess proposals
CU
STO
MER
(Bu
sin
ess
)B
OA
RD
(Exe
cuti
ves)
PO
RTF
OLI
OM
anag
er(s
)O
PER
ATIO
NS
(Bu
sin
ess
)
Requesta project
Problem oropportunity!
business-internalpre-assessment
businesscase
© Becota | www.becota.org | 2010
Project portfolio management as a process (part 2)
Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385
Collect andassess proposals
CU
STO
MER
(Bu
sin
ess
)B
OA
RD
(Exe
cuti
ves)
PO
RTF
OLI
OM
anag
er(s
)O
PER
ATIO
NS
(Bu
sin
ess
)
Requesta project
Problem oropportunity!
Run projects
business-internalpre-assessment
businesscase
© Becota | www.becota.org | 2010
Project portfolio management as a process (part 2)
Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385
CU
STO
MER
(Bu
sin
ess
)B
OA
RD
(Exe
cuti
ves)
PO
RTF
OLI
OM
anag
er(s
)O
PER
ATIO
NS
(Bu
sin
ess
)
Requesta project
Problem oropportunity!
Run projects
business-internalpre-assessment
businesscase
ProjectManagement
PortfolioManagement
ProgramManagement
Collect andassess proposals
© Becota | www.becota.org | 2010
Project portfolio management as a process (part 2)
Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385
Collect andassess proposals
CU
STO
MER
(Bu
sin
ess
)B
OA
RD
(Exe
cuti
ves)
PO
RTF
OLI
OM
anag
er(s
)O
PER
ATIO
NS
(Bu
sin
ess
)
Requesta project
Problem oropportunity!
Checkresources & portfolio
Report availabilityof resources
Report currentprojects progress Run projects
business-internalpre-assessment
businesscase
© Becota | www.becota.org | 2010
Project portfolio management as a process (part 2)
Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385
Collect andassess proposals
CU
STO
MER
(Bu
sin
ess
)B
OA
RD
(Exe
cuti
ves)
PO
RTF
OLI
OM
anag
er(s
)O
PER
ATIO
NS
(Bu
sin
ess
)
Requesta project
Problem oropportunity!
Checkresources & portfolio
Report availabilityof resources
Report currentprojects progress Run projects
Approveproject candidates
business-internalpre-assessment
businesscase
projectcandidates
© Becota | www.becota.org | 2010
Project portfolio categories
Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 388
Project A
Project B
Project C
Project D
Project M
Project N
Project O
Project S
Project T
Project U
Project V
Project W
Project X
Category:Sustaining
Category:Cost-Cutting
Category:New Revenue
A portfolio is made up of different categories. Type and number of categories are resulting from strategic considerations.Within each category projects are ranked according to their priority.
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Creating and selecting portfolio options
Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 391
Project category is represented by a circle‘s color.Project cost is represented by a circle‘s diameter.
Most
Least
MostLeast
BENEFITto business
EASEof implementation
U
C
A
N
O
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finally, let‘s
bring it all
together
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Enterprise project management model
ProjectManagement
PortfolioManagement
ProgramManagement
Work PackageManagement
ProjectManagement
Sub ProjectManagement
© Becota | www.becota.org | 2010
Enterprise project management model
PortfolioManagement
ProgramManagement
Work PackageManagement
Sub ProjectManagement
ProjectManagement
dozens
some more
less then 5*
up to thousands
hundreds
* In very big enterprises
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Your business is comparable to a system of railway tracks
Source: A.W. Scheer
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A business process is comparable to a regular train on the track
Source: A.W. Scheer
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A business project is a very special business process: it is comparable to a very special train on the track
Picture source: http://media.news.de/resources/thumbs/37/
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Business controlling is comparable to therailway control center‘s work
Source: A.W. Scheer
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Enterprise project management model
PortfolioManagement
ProgramManagement
Work PackageManagement
Sub ProjectManagement
ProjectManagement
Strategic Level
Tacticallevel
Operationallevel
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Enterprise project management levels
strategic
operational
tactical
Management level
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Enterprise project management levels
strategic
operational
tactical
Management level
executed
approved
controlled
Project is…
Spending theweekend
at the sea. Going bycar. Avoiding major
highways.
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Deliverables / Budget / Schedule
Enterprise project management levels
strategic
operational
tactical
Management level
executed
approved
controlled
Project is…
Business Case/Contract
Spending theweekend
at the sea. Going bycar. Avoiding major
highways.
© Becota GmbH | www.becota.com | 2010
Enterprise project management levels
strategic
operational
tactical
Management level
executed
approved
controlled
Project is…
Spending theweekend
at the sea. Going bycar. Avoiding major
highways.
Performance is measuredbottom up!
Only the things you measureyou can manage!
© Becota | www.becota.org | 2010
Enterprise project management model
PortfolioManagement
ProgramManagement
Work PackageManagement
Sub ProjectManagement
ProjectManagement
Strategic Level
Tacticallevel
Operationallevel
With portfolio management you make projects an integratedpart of our regular business!
Thank you very much!
presentation by
Frank Habermann
founder of Becota and Professor of Business
http://de.linkedin.com/in/frankhabermann/en
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