joe norton on project patterns for pmi meeting tulsa...

Project PatternsProject PatternsA Discussion of Issues and OpportunitiesA Discussion of Issues and Opportunities

This report is solely for the use of PMI Members. No part of it may be circulated, quoted, or reproduced for distribution outside PMI without prior writtenapproval from Joseph F. Norton. Material contained herein supports an oral presentation; it is not a complete record of the discussion.

The information contained within this presentation is intended only for the person, persons, or entity to which it is addressed and may contain p y p , p , y yconfidential, privileged and / or copyrighted information. Any review, dissemination or other use of, or any action taken in reliance upon this information

by persons or entities other then the intended recipient is prohibited and may be unlawful.

All rights are reserved by Joseph F. Norton

Joseph F. NortonLecturer, Technology Industry ManagementCenter for Innovation on Technology and Innovation

© 2009 Joseph F. Nortonwww.joenorton.com joenorton.joenorton.com Project Patterns

Kellogg School of Managementjoe‐[email protected]

Who is this guy? …Joseph F. Norton


Who became …

Joseph F. Norton, Lecturer, Technology Industry Management

Center for ResearchCenter for Researchin

Technology and InnovationThe Kellogg School of Management

www.joenorton.com


And in between …


Next Chapter for Joe Norton


Let us examine a typical Project Pattern

1. Conceive Project

Classic Project Pattern

1. Conceive Project2. Set Targets – Goals and Timelines3. Assign Staff4 Generate Task lists4. Generate Task lists5. Work the Project6. Ask for Status7. Hide the bad news8. Reach a Crisis9. Ask for Executive Management Interventiong10.Extend Schedules11.Repeat from step 4


Year Company What Happened Outcome

The Impact of this Pattern (23 projects ~ 1992 thru 2005)

2005 Hudson Bay Co. (Canada) Problems with inventory system (33,300,000)$ 2004 FBI Virtual Case File System abandoned before deployment (171,000,000)$

2004-2005 UK Inland Revenue Software errors contribute to tax-credit overpayment (3,450,000,000)$ 2004 Avis Europe PLC (UK) Enterprise resource planning ERP system cancelled (54,500,000)$ 2004 Ford Motor Co. Purchase system abandoned after deployment (400,000,000)$

$2004 J Sainsbury PLC (UK) Supply-chain management system abandoned after deployment (527,000,000)$ 2004 Hewlett-Packard Co. Problem with ERP system (160,000,000)$

2003-2004 AT&T Wireless Customer relations management CRM problems (100,000,000)$ 2002 McDonald's Corporation Innovate information/purchasing system cancelled (170,000,000)$ 2002 Sydney Water Corp. (Australia) Billing system canceled (32,200,000)$ 2002 CIGNA Corp. Problems with CRM system (445,000,000)$ 2001 Nike, Inc. Problems with supply-chain management system (100,000,000)$ 2001 K t C S l h t t l d (130 000 000)$2001 Kmart Corp. Supply-change management system canceled (130,000,000)$ 2000 Washington, D.C. City payrol system abandoned after deployment (25,000,000)$ 1999 United Way Administrative processing system canceled (12,000,000)$ 1999 State of Mississippi Tax system canceled (196,200,000)$ 1999 Hershey Foods Corp. Problems with ERP (151,000,000)$ 1998 Snap-on, Inc. Problems with order-entry system (50,000,000)$ 1997 U.S. Internal Revenue Service Tax Modernization effort canceled (4,000,000,000)$ 1997 State of Washington Department of Motor Vehicle DMV system canceled (40 000 000)$1997 State of Washington Department of Motor Vehicle DMV system canceled (40,000,000)$ 1997 Oxford Health Plans Inc. Billing and claims system problems (3,400,000,000)$ 1996 Arianespace (France) Software specification and design errors (350,000,000)$ 1996 FoxMeyer Drug Co. ERP system abandoned after deployment (40,000,000)$ 1995 Toronto Stock Exchange (Canada) Electronic trading system canceled (25,500,000)$ 1994 U.S. Federal Aviation Administration Advanced Automation System canceled (2,600,000,000)$ 1994 State of California DMV system cancelled (44,000,000)$ 1994 Chemical Bank Software errors deduct from customer accounts (15 000 000)$1994 Chemical Bank Software errors deduct from customer accounts (15,000,000)$ 1993 London Stock Exchange (UK) Stock settlement system canceled (600,000,000)$ 1993 Allstate Insurance Co. Office automation system abandoned after deployment (130,000,000)$ 1993 London Ambulance Service (UK) Dispactch system cancelled twice (26,250,000)$ 1993 Greyhound Lines Inc. Bus reservation system crashes repeatedly (61,000,000)$ 1992 Budget Rent-A-Car, Hilton Hotels, Marriott & AMR Travel Reservation system cancelled (165,000,000)$


(17,703,950,000)$

And the beat just keeps rolling on …

Software Development

F il d Ab d d S tFailures and Abandoned Systems

Cost $1 000 000 000 00 / yearCost $1,000,000,000.00 / year


It is really easy to prepare a talk about failure …

However, this evening I would rather talk with you about

Patterns of Success in Projects


Recognizing patterns requires viewer orientation

All Projects are the Same


Th P j t & P j t M t D i ithi th P d t Lif l

Successful Projects understand why they exist

PureBasic

Applied Researchi.e.

Th P j t

Growth Maturity Deterioration DeathMKTIntro

OI

The Project & Project Management Domain within the Product Lifecycle

turn

Research The Projectto

Create a Product

Reven

ue RO

P j t

Ret

Profit

Project&

Project Management

Initiate Plan Execute Control Close

$0

tmen

t

Invest

Breakeven Point

Inve

st

vestment

Adapted: Project Management, A systems Approach to Planning, Scheduling and Controlling, 8th ed.Harold Kerzner, Ph.D., ©2003 by John Wiley & Sons Inc.; pg.73.


Successful Projects have the same end-goal …

Market PenetrationMarket Development

Product Development

ProductManagement

Current

Customer RetentionRevenue per Customer

Service SpeedService Quality

GrowthRevenue

ManagementOperating

M i &Future

EconomicProfits

YieldCycle TimeProductivity

Service Performance

Returnon

CapitalCost

Management

Margin

Costof

Capital

Facilities UtilizationCapacity Utilization

Technology Utilization

Inventory Turnover

Fixed AssetManagement

W ki C it l

Net AssetTurnover

Inventory TurnoverAccounts Receivable Days

Accounts Payable Days

Working CapitalManagement

There are 2 categories of projects-5 sub-types


Product or Process Oriented5 sub types

Successful Projects have only Five Concerns

The Five Focuses of Projects

People, working at some level of productivity,produce a quantity of function or a work product

at a level of reliabilityat a level of reliabilityby the expenditure of effort

over a time interval.over a time interval.Source: Five Core Metrics

by Putnam & Meyers


Successful Projects have four things in common …

1 Pl i & E ti ti1. Planning & Estimating

2. Scope ManagementFour Key Elements

of

3. Performance Measurement & Evaluation

4 Telling the Truth

SuccessfulProjects

4. Telling the Truth

5. Re-Planning and Re-Estimating

6. Scope Management

7. Performance Measurement & Evaluation

8. Telling the Truth

9 G t t 5 d t til j t i l t d ll d


9. Go to step 5 and repeat until project is completed or cancelled.

Successful Projects are not “FAR” Projects

65432

AssembleResources

ToPerformTasks

WhichComplete

an

ThatResults

in aDeli erable Item

Meetinga

Milestone

Resultingin a

ProjectGoal

1

TaskResources

Tasks anActivity

Deliverable Item-

TangibleProduct

-Service Capability

Milestone Goalor

Objectiveto be

Achieved

Project

Task

Task

TaskInformation

Skills

People

Service Capability

jGoal

orObjective

MilestoneDeliverableItemActivity

Task

Task

Task

Materials

Facilities

Task

Task


Planning a Project is Counter Intuitive to Doing a Project

65432

Determinethe

Goal

Determinethe

Milestone

Determinewhat

Deliverable

DetermineWhat

Activities

DeterminewhatTasks

DetermineWhat

Resources

1

orObjective

of theProject

and/orMilestoneswhich must

beMet

Itemsmust be

DevelopedCreated

Purchasedto Achieve

must bePerformed

toDeliver

anI

must bePerformed

toComplete

anA ti it

Resourcesare needed

toPerform

eachTask

Task

Task

Resources

People

to Achievea Milestone

Item Activity

ProjectGoal

orObj ti

Milestone DeliverableItem Activity

Task

Task

Task

Information

Skills

MaterialsObjective Task

Task

Task

Facilities


Task

Planning ~ Doing Cycle

Plan the Project

Do the Project

Plan the Project

TaskResources

Project

Task

Task

TaskInformation

Skills

People

jGoal

orObjective


Task

Task

Task

Materials

Facilities

Task

Task


Many Projects encounter surprises because we … Start

PlanningHereby

MakingLists

Often resulting in “Planning Gaps”which impact

Schedules and Costs

TaskResources

during the course of the project.

Project

Task

Task

TaskInformation

Skills

People

jGoal

orObjective


Task

Task

Task

Materials

Facilities

Gotchas Task

Task

We missed somethingWe missed a couple of somethingsWe’re in troubleWe missed a couple of big somethings


We missed a couple of big somethingsWe’re in Big Trouble

“Backward” Planning allows us to …Build the WBS … Organize before we Act.

Plan the Project

Task

g

ActivityTaskResources

MilestoneDeliverableItem

Task

ProjectDeliverable

Item

Task

Task

TaskInformation

Skills

People

MilestoneActivityj

Goalor

ObjectiveMilestone

Task

Task

Task

Materials

FacilitiesDeliverable

ItemActivity

Task

Task

Task MilestoneDeliverableItemActivity


Task

Itemy

Successful Projects Plan their Management

PlanInitiate Execute Control Close Out

Project ManagementLevel 0

Level 1

Noun

Process / Phase

Noun Performance Baseline RisksLevel 2

S

DeliverableItems

Activity D ti

Schedule

C t R

CostBudget

RiskItems

Probability&

Impacts

MitigationPlansLevel 3

Id if CreateScopeStatement WBS

ActivityNetworkDiagram

DurationEstimates

CostEstimates

ResourcePlan

Purpose Objectives AssumptionsCritical

SuccessMilestones

Level 4

Level 5

IdentifyRisks

EstablishScenarios

CreateEvent

Profiles

Verb

p j pFactors

IdentifyKey

StakeholdersInterviews Approve

Objectives

Reviewwith

Stakeholders

DraftObjectivesDocument

WorkPackage Verb

WorkPackage


It is focused on understanding Project Performance

Project PlanPerformance Baseline

Deliverable ProjectCost BudgetSchedule

Performance Baseline

ItemsActivity Network

DiagramEffort + Duration

EstimatesCost

EstimatesResource

Plan

jRisks

Scope Statement

Work Breakdown Structure

Scope Statement


... and instruments projects to:

Define and CaptureDefine and Capture

Planned and Actual

Deliverable Based Performance Information

Head Coach: Tom Coughlin New York Giants

Head Coach: Bill Belichick New England PatriotsNew England Patriots

What do you think these two “Project Managers” measure every Sunday?

Fi D© 2009 Joseph F. Nortonwww.joenorton.com joenorton.joenorton.com Project Patterns

First Downs

…example Deliverable Item Description


Deliverables Based Performance Information allows

h f ll i jHow is the Project Doing Time Wise?

the following ProjectPerformanceQuestions

Are we ahead or behind schedule?How efficiently are we using time?When are we likely to finish work?Questions

to be routinely and easily

When are we likely to finish work?What are our time options?

How is the Project Doing Cost Wise?to be routinely and easilyanswered. Are we under or over budget?

How efficiently are we using our resources?What is the project likely to cost?Will we be under or over budget?

What will the remaining work cost?What are our cost options?

How is the Project Doing Scope Wise?

Are we ahead or behind on scope?Will we be able to achieve planned scope?

How much of the planned scope will be delivered?What are our scope options?


What are our scope options?

Successful Projects embrace Probability & Ranges

Actual

Perception of Project Planning Reality of Project Planning

100 % 100 %CostActualCost

Worst Case

% C

ompl

ete

% C

ompl

ete

Best Case

Time Time

Best Case


Most

WeightedAverage(PERT)

Successful Projects understand statisticsWeighted Average

Expected Time or CostLikely (PERT)

=O + (4 x Most Likely) + P

6

p(calculate at lowest level tasks)

ETorEC

RelativeProbability

OfOccurrence

Beta DistributionP-OTaskStandard =

6Standard =Deviation

P-O

2Variance

of =

Optimistic PessimisticPossible Durations

68.26%( / 1 i )

6Task

(+/- 1 sigma)

95.46%(+/- 2 sigma)

99.73%

•To determine +/- 1 sigma of a project

1 - Add the series of task variances2 - Then take the square root of total variances3 - Yields 1 standard deviation of project estimate


(+/- 3 sigma)

Oct Nov Dec Jan Feb MarReal Life Example Oct Nov Dec Jan Feb MarReal Life Example

Successful Projects understand that Pictures are better

R 1.0Targets Fi

nal

R 1.0Project Plan

Final

R 2.0Targets

ProductManagement

Issues:

User Training & Dev

Customer ServiceProcessesProdeduresStaffSuppt Tech Automation

Business SupportBusiness Systems

Tech OrgOperating ModelStaff ModelRecruitmentext

Content ManagementAnalytics & ReportsFinanceCRMDocument ManagementSite Traffic Monitoring & StatsSite Click & Flow Through ToolsConfig / Build ManagementService Exchange Full

R 1.0Targets Fi

nal

R 1.0Project Plan

Final

R 2.0Targets

ProductManagement

Issues:

User Training & Dev

Customer ServiceProcessesProdeduresStaffSuppt Tech Automation

Business SupportBusiness Systems

Tech OrgOperating ModelStaff ModelRecruitmentext

Content ManagementAnalytics & ReportsFinanceCRMDocument ManagementSite Traffic Monitoring & StatsSite Click & Flow Through ToolsConfig / Build ManagementService Exchange Full

Requirements Specifications

Design & BuildOptimization Target

Test & IntgOptimization Target

Establish Dev Process / Procs

37 Signals UI Design

DevelopmentCRM Competitor Research

Vendor / 3rd Party Research

Requirements Specifications

Design & BuildOptimization Target

Test & IntgOptimization Target

Establish Dev Process / Procs


DevelopmentCRM Competitor Research

Vendor / 3rd Party Research

Trial

Production R 1.0

R 1.0 Test Planning

Performance Model Performance Planning

Optimization Target


Applications Optimization Target

Trial

Production R 1.0

R 1.0 Test Planning

Performance Model Performance Planning

Optimization Target


Applications Optimization Target

Financial System - GL/AP/AR …

Mail & Fax Server Systems & Notification Apps

DevConfig O

rder

Receive & Install

T t er

Optimization Target

Financial System - GL/AP/AR …

Mail & Fax Server Systems & Notification Apps

DevConfig O

rder

Receive & Install

T t er

Optimization TargetTest

Config Ord

e

Receive & Install

ProductionConfig O

rder

Receive & InstallOptimization Target

ResearchHosting Hosting Inquiries Decision

Infrastructure

Tech Operations

Issues:Operating ProcsNew User SetupBackup / RecoveryContingencyDisasterTechnical Support

TestConfig O

rde

Receive & Install

ProductionConfig O

rder

Receive & InstallOptimization Target

ResearchHosting Hosting Inquiries Decision

Infrastructure

Tech Operations

Issues:Operating ProcsNew User SetupBackup / RecoveryContingencyDisasterTechnical Support


g

Tech Ops Business Model Policy & Procedures Systems & NetworkManagement Tools Set Up

g

Tech Ops Business Model Policy & Procedures Systems & NetworkManagement Tools Set Up

Successful Projects constantly rebalance

RRRR

Scop

eResourceQualitySc

ope

ResourceQualityScop

eResourceQualitySc

ope

ResourceQualityS cesSatisfactionS cesSatisfactionS cesSatisfactionS cesSatisfaction

TimeTimeTimeTime

One of the Triple-Constraints is Dominate … the others follow.One of the Triple Constraints is Dominate … the others follow.

Resource / Cost dominates Process / Corporate IT Projects


Time / Schedule dominates Product / Go to Market – Speed to Revenue Projects

Early Visibility allows Viable Corrective Action or Tradeoff Decisions

Successful Projects have a high tolerance for Visibility

M1 M2 M3 M4 M5

D1 D2 D3 D4 D5

EffortExpressed

In

Plan

HoursOr$$$

Actual

Accomplishment


Duration Expressed in Time Increments

Successful Projects are Fact Based

Cost Schedule Baseline

s

BCWP

BCWS

ScheduleVariance

ACWP

Actual CostTrueCost

Variance

Dol

lars

AccountingCost Variance

Earned Value

Time

“Just the facts, nothing but the facts ...” It is hard to argue with evidence


Why are we so afraid of EVM?Planned Value

“B li B d t”Planned Value

“B li B d t”Planned Value

“B li B d t”

Actual Cost of Work Performed(ACWP)



“Baseline Budget”(BCWS)



SVSchedule Variance

d ll

SVSchedule Variance

d ll

CVCost Variance

Dollars (labor days)of spending

behind or ahead of schedule

CVCost Variance

Dollars (labor days)of spending

behind or ahead of scheduledollarsdollars behind or ahead of schedulebehind or ahead of schedule

stst

Budgeted Cost of Work Performed“Earned Value”

(BCWP)


(BCWP)


(BCWP)

Cos

Time

Cos

Time SVSV


Schedule Variancedays behind or ahead

of schedule

Schedule Variancedays behind or ahead

of schedule

EVM = Push Button Status & ForecastingPLAN

(BCWS)

1,2001,3001,400

$K(BCWS)

Actual(ACWP)

700800900

1,0001,100 (ACWP)

300400500600700

Earned Value

Jan Feb Mar Apr Man Jun Jul Aug Sep Oct Nov Dec0100200300

(BCWP)

CVCPISV

BCWP = $ 600KACWP = $1 000K

= BCWP - ACWP= BCWP / ACWP= BCWP BCWS

($400K).6 or 60%($200K)

EAC= BAC / CPI

BAC = $1,340K


SVSPI

ACWP = $1,000KBCWS = $ 800K

= BCWP - BCWS= BCWP / BCWS

($200K).75 or 75%

$2,333K

Real World Example #1Performance Data Feb-08

Base Budget Hours 11,744

Budget Variance Hours -1,659

Project Cost Variance Hours -3,433CPI 0.61

Schedule Variance -1,774SPI 0.75

Budget Variance

Base Budget Hours 11,744Estimate at Complete Hours 19,205

Base Schedule Months 17Estimate at Complete Months 23

Cost Variance

ScheduleVariance


Real World Example #2Performance Data Mar-08

Base Budget Hours 10,240

Budget Variance Hours -1,683

Project Cost Variance Hours -6,147CPI 0.33

Schedule Variance -4,465SPI 0.4

Base Budget Hours 10,240Estimate at Complete Hours 31,195

Base Schedule Months 21

Cost Variance

Estimate at Complete Months 52

Cost Variance

ScheduleVariance


Successful Projects embrace the Value of PM

I iti ti

Project Management Practices Value Contribution to Success

InitiatingPolicies and Standards

SponsorshipBusiness CasesProject Charter

PlanningS D fi iti

15%

Scope DefinitionWork Breakdown Structure

Activity SequencingActivity Duration Estimating

Activity Cost EstimatingResource Estimating

Risk ManagementSchedule & Cost BaselinesP j t M t Pl

25%

Project Management PlanProject Activity Methodology

Project Performance Management

Project Management Information SystemExecuting

ScopeC t

5% 65%Cost

ScheduleQuality

ResourcesCommunications

RiskProcurementIntegration

15%Executives

Should Focus TheirAttention

ControllingPerformance Assessment & Management

ReportingScope & Change Management

CloseoutDeliverable Verification & Validation

25%

1 %

AttentionTo These Aspects ofProject Management


Deliverable Verification & ValidationReviews

Administrative CloseoutLessons Learned

15%

Initiate Plan Execute Control Close Out

Successful Projects do not take Short-Cuts

Project

Integration

ManageBusiness

Case

DeliverableItems

Activity NetworkDiagram

Measure Deliver

ScopeEarned Value

Milestones

Stage GatesDeliverable Items

ProjectBaseline

ProjectCharter

Schedule

CostEstimates

Effort & DurationEstimates

CostBudget

ScheduleCost

ResourceQuality

RiskChange

CPISPICVSV

ETC - EAC

Phase Gates

Verification&

Validation

AcceptanceCommunicate

ResourcePlan

WBS

ProjectDescription

ProjectRisks

ScopeStatement Project – Procurement – Contract

AdministrationClose Out

Project PlanPM

Policies& Project Execution Lifecycle

Project Management Information System


&Standards

j y

Mapping the PMI PMBOK as an End-to-End Process © 2003 Joseph F. Norton

Successful Projects are Successful by Design!

1. Conceive Project2 S t T t G l d Ti li

Typical Project Process

1. Approve the Business Case2 Ch t th P j t f Pl i

Executive Project Management Process Checklist

2. Set Targets – Goals and Timelines3. Assign Staff4. Generate Task lists5. Work the Project6. Ask for Status

2. Charter the Project for Planning3. Define the Scope4. Build the WBS5. Define the Deliverables6. Map the Activities and SequenceThis is where

7. Hide the bad news8. Reach a Crisis9. Ask for Executive Management Intervention10. Extend Schedules11 Repeat from step 4

p q7. Estimate the Durations8. Determine Preliminary Schedule9. Resource Planning10. Determine Preliminary Cost Estimate11 Design Performance Measures into the Project

Success is Designed

i j11. Repeat from step 4 11. Design Performance Measures into the Project12. Understand Risks and Adjust Preliminary Plans13. Establish Project Baseline14. Test for Probability of Achievement15. Review and Approve the Project Plan

into your project.

16. Manage the Project17. Measure Performance18. Report the Facts19. Adjust as needed20 Deliver


20. Deliver

Thank You

Time for Questions …

Thank You


joe norton on project patterns for pmi meeting tulsa...

Documents