Boosting Project Bottom Lines through

Effective Project Quality Reviews and

Audits

Contributed by Michael Stanleigh on December 15, 2015 in Operations & Supply Chain

Corporations throughout the world are losing billions

in wasted project spending owing to their mis-

management, poor quality processes, lack of

knowledge in how to manage projects, etc. These

projects are often not included in the normal auditing

practices. Understanding the process of auditing

projects, in addition to their other best practices; will

positively impact the organization’s profits,

shareholders and customers by ensuring well-

informed decisions are made about their key projects.

The outcome of project failure is wasted dollars that

steal investor profits and have a negative impact on

the organisation’s bottom-line. A project quality review and audit provides an opportunity to

uncover the issues, concerns and challenges encountered throughout a project’s execution. It

affords those responsible for the project with an interim view of what has gone well and what

needs to be improved within the project to successfully complete it. Conducting a project

quality review & audit mid-way can help struggling projects to get back on track. At the

close of a project, it can help to develop success criteria for future projects by providing a

forensic review.

Why Project Quality Reviews and Audits?

The success of projects is critical to the bottom-line of organizations. Most projects face a

number of challenges in meeting their time, budget and customer requirements. A project

quality review and audit provides organizations an opportunity to create future project

success and generate savings. Project quality reviews and audits may be conducted mid-way

into a project or at its close. Either way, they help to identify the root cause of problems and

provide detailed guidance for how to get projects back on track and/or improve project

performance on future projects. In this way, a project quality review and audit has a direct,

positive bottom-line impact on the organization.

Timing of Project Quality Review and Audit

Sometimes organizations choose to conduct a project quality review and audit at the close of

a project to conduct a forensic review. In this situation, it generates valuable insights about

the organization’s project management capability and helps clarify “success criteria” for

future projects. Organizations use this information to learn from mistakes and make sure that

they do not repeat them on future projects.

Who should do the Project Quality Review and Audit?

Regardless of whether the project quality review and audit is conducted mid-term on a project

or at its conclusion, the process is similar. It is generally recommended that an outside

auditor/consultant conduct the project quality review & audit. This ensures confidentiality but

also provides the team members and other stakeholders with the opportunity to be candid.

They know that their input will be valued and the final report will not identify individual

names, rather it will only include facts. It is common that individuals interviewed during the

project quality review & audit of a badly managed project will find speaking with an outside

auditor/consultant provides them with the opportunity to express their emotions and feelings

about their involvement in the project and/or the impact the project has had on them.

We have audited projects from a variety of industry sectors including: Manufacturing,

Information Technology, Software Development, Insurance, Banking, Mining, Government

and Universities. Despite the differences in their services and products, our approach to

completing a project quality review & audit is similar. It requires about three (3) very

intensive weeks to complete the in-depth quality review & audit and deliver the final

report. Often the project is in crisis and the organization is eager to get the project back on

track quickly. Therefore it is important to get the project quality review & audit completed

quickly.

Project Quality Review and Audit Process

The approach is broken down into three phases:

Phase 1: Planning the Project Quality Review and Audit

Phase 2: Project Analysis

Phase 3: Report and Recommendations

Phase 1: Planning the Project Quality Review and Audit

During the Planning Phase the project auditor/consultant plans the project quality review &

audit process steps and dates. As well, they clarify the expectations for the project quality

review and audit by holding interviews with the project steering committee members and/or

leadership team and/or sponsors as well as the project manager.

The objective of this phase is to:

Understand leadership’s “success criteria” for the project quality review and audit to

ensure their individual and collective needs will be met.

Determine whether or not consistent project management practices are part of the

corporate culture.

Review any current project management processes, tools and templates that are

expected to have been followed in the management of the project.

Examine the structure of the project as well as the roles and responsibilities of the

assigned resources.

Planning the Project Quality Review and Audit Case Study

The Situation

This organization undertook a major project to re-design one of their product development

platforms. This platform accounted for about 1/3 of their business. It was valued at 200

million dollars and had 50 internal resources working on it.

The project included both manufacturing and software development. The organization had

wasted a couple of years on this project resulting in their competitiveness slipping from being

the leader on this product line to number 3 in the marketplace. This had a serious financial

impact on the organization. The leadership team determined that if they didn’t get this new

product platform launched in the next 10 months, the very survival of the company was at

risk.

In the past 2 years they had 3 different project managers working on it yet they still had no

clear plan on how to launch. They delayed hiring Business Improvement Architects to do an

in-depth project quality review and audit for 8 months from their initial point of contact. It

was only when the project was in a complete crisis and it was apparent the launch date could

never be met that they finally decided to have the project quality review and audit completed.

Bia™ Process and Approach

We started by presenting a number of questions to the project manager. The answers helped

identify who to interview, the questions to ask and the documentation to review. These

questions include:

Have competencies been developed for the various project roles i.e.; for the Project

Manager, Core Project Team Leaders, Project Resources?

How were resources identified for the project?

What is the current project structure?

Does the organization have a specific project management methodology or framework

as well as any specific project tools, templates and/or documents?

Are there specific lifecycles that this project must follow? I.e.; software development,

new product development, etc.

Has a risk assessment ever been done on this project?

How are changes to the baselined project managed?

Phase 2: Project Analysis

The Project Analysis phase is comprehensive and involves a review of the entire project. In

this phase, the project auditor/consultant gathers information from the project manager, core

team members, sponsor, vendors, consultants, suppliers, etc. to assess the issues, challenges

and concerns with the project and to get to the root causes of any problems.

The auditor/consultant identifies gaps in the level of detail in the project plan as well as

dependencies, milestones, resources and control. They check to see:

How well the project plan incorporated the vendor plan

How the project team managed the project budget

The overall quality of the project processes.

The extent to which external resources such as suppliers, consultants, contractors, etc.

are on track in the management of their portion of the project schedule and budget.

How well risk has been managed.

The extent to which change has been correctly managed.

The project auditor/consultant will sit in on selected project team meetings, sponsor meetings,

customer meetings and other meetings. This will help them identify the process and

outcomes of these meetings and get a first-hand understanding of the process that the project

is following.

Project Analysis Case Study

During this phase we interviewed the project manager, project sponsor, executive steering

committee members, core project team members, key internal and external resources

(vendors, suppliers, contractors) and other key stakeholders. We attended project core and

extended team meetings, sponsor meetings and customer review meetings. We reviewed all

of the existing documentation including:

Project Structure

Issue Logs and action items

Scope Statement

Business and Stakeholder Requirements

Project schedule plans (baseline and re-baselined)

Budget plans (original vs. actuals)

Vendor, consultant and/or other external resource plans

Milestone Reports

Project Team Meeting Agendas and Minutes

Change Orders/Requests

Change Logs

Risk Logs and Assessments

Sponsor reports

Customer and other Stakeholder reports

Other relevant project documentation

Phase 3: Report and Recommendations

The Report and Recommendations phase results in the presentation of a detailed project

quality review and audit report to management with specific recommendations for overall

performance improvement of the project.

The report includes the findings from all of the information collected; both from interviews as

well as project documentation. It identifies all the project’s issues, concerns and challenges

and, most importantly, provides specific recommendations and the actions to implement these

actions so that improvements to the overall performance of the project can be successfully

implemented.

When conducted at the end of the project the quality review and audit report provides

valuable lessons learned for future application and validates that resources were effectively

and efficiently utilized. It also identifies any competency and leadership requirements for a

Project Manager.

Report and Recommendations Case Study

Our final report included detailed recommendations and the actions required to get the project

on track. It was delivered to the senior leadership team. They listened, asked questions and

promised to report to us within the next few days. The executive sponsor contacted us

several days later. He told us that this was the most difficult report they had ever

reviewed. Their initial reaction, after we had left their boardroom, was to discount the report

as untrue, unfounded, etc. Then they thought about it and realized that we had been the first

consulting firm they had ever worked with that told them what they needed to hear – not what

they wanted to hear.

They embraced our recommendations and asked us to work closely with them to implement

all of the recommendations. They recognized they didn’t have the internal capability. It took

2 intensive months to implement. They had originally wanted to launch in 10 months from

when we started our audit. By the time we helped them to implement our recommendations,

they were on track to launch on the original date.

Conclusion

Project audits not only uncover problems, issues and challenges that may be preventing

projects from succeeding but also contribute “Lessons Learned” that can help to improve the

performance of future projects. They are always highly beneficial to an organization and pay

back the investment many times over.

About Michael Stanleigh

Michael Stanleigh, CMC, CSP is the CEO of Business Improvement Architects. He works

with leaders and their teams around the world to improve organizational performance

by helping to define their strategic direction, increase leadership performance, create

cultures that drive innovation and improve project and quality management. He has

been instrumental in helping his clients increase productivity and profits with his innovative

approaches and focus on quality. For more information about this article, please contact him at

mstanleigh@bia.ca or phone, 416-444-8225.

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