lessons in project management - 7 - project performance management

International Project Management

Prof. Dr. Frank Habermann

Lecture 7 –

Project Performance Management

© Becota GmbH | www.becota.com | 2010

Understanding project related sub-systems

Basic performance management model

– Reporting project prgress

– Controlling project progress

Project portfolio management model

Enterprise project management model

Content

© Becota | www.becota.org | 2010

Performance against

what?


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)


Remember lecture #5: Breaking down the project in sub-systems

Processes & Tasks work breakdown structure

workpackage

task

subproject

project


Remember lecture #5: Breaking down the project in sub-systems


workpackage

task

subproject

project

measurable items!


projectmanager

Organizing interrelated sub-systems


workpackage

task

subproject

Roles & Responsibilitiesorganisational structure

project


projectmanager



workpackage

task

subproject


spmanager

wpowner

taskowner

project


projectmanager



workpackage

task

subproject


spmanager

wpowner

taskowner

Resources & Toolsproject goal structure

Project goals

TC

Q

project


projectmanager


Processes & Taskswork breakdown structure

workpackage

task

subproject


spmanager

wpowner

taskowner

Resources & Toolsproject goal structure

Project goals

TC

Q

spgoals

wpgoals

taskgoals

project


Work PackageManagement

ProjectManagement

Project management model

Sub ProjectManagement



ProjectManagement



many

few

one



ProjectManagement



processes

people

tech

no

logy



ProjectManagement



processes

people

tech

no

logy

con

tro

llin

g

rep

ort

ing

define criteriaset parameters

monitor progress

collect dataanalyse information

communicate progress


Reporting the project‘s

progress


S/he who writes stays in the job!

Source: http://www.articlemarketinghq.com/wp-content/uploads/2010/12/writer.jpg


Trivial reporting cycle

Source: http://www.projects.uts.edu.au/images/diagram16.gif


More sophisticated reporting schedule

Once Daily Weekly At Phase Review

Source: http://www.jiscinfonet.ac.uk/images/report-schedule.png


Remember lecture#2:Know your stakeholders and have a communication plan

Source: Verzuh, E., The Fast Forward MBA in Project Management, p. 74


Controlling the project‘s

progress


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).


Wrong!

Picture source: adapted from www.freakingnews.com/pictures/29500/Air-Traffic-Control-29849.jpg

But celebrate, even if your luck is undeserved…


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



WBSBusiness

case


Plan



WBS

Projectplan

Budget

Businesscase

Delive-rables

Plan




WBS

Projectplan

Budget

Businesscase

Track taskduration

(gantt chart)

Track cost & effort

(time sheets)

Delive-rables

Track outputquality

(product models)

Control


Plan



WBS

Projectplan

Budget

Businesscase

Track taskduration

(gantt chart)

Track cost & effort

(time sheets)

Compareplan/model

to reality

Delive-rables

Track outputquality

(product models)


Control

Plan



WBS

Projectplan

Budget

Businesscase

Track taskduration

(gantt chart)

Track cost & effort

(time sheets)

Compareplan/model

to realityTake action

Delive-rables

Track outputquality

(product models)


If there is no timeleft to take action,

controlling does notmake any sense!

Control

Plan


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


Project performance managementproceeds with detailed plans, models, and concepts

RoughRequire-ments

Definition SolutionDocumentation

Test Plan



Definition

TrainingPlan

Plan

RUN


Project performance managementproceeds with detailed plans, models, and concepts

RoughRequire-ments

Definition SolutionDocumentation

Test Plan



Definition

TrainingPlan

Compareplan/model

to realityTake action

Track output quality(product models)

Control

Plan

RUN


Example for tracking time (activity-based)

Source: Figure 13.1 Baseline Gantt Chart (Gray & Larson, 2006, p414)


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


Example for tracking time (cumulative)

Source: Figure 13.2 Project Schedule Control Chart (Gray & Larson, 2006, p415)


Combining budget and schedule status to get a complete picture of the project

Earned value analysis

Schedule Budget

ahead

on

behind

under

on

over


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


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


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


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?




GOOD

BAD

TRADE-OFF

TRADE-OFF




Common business practice: grey shaded area representsvariance within the discretion of the project manager (i.e. not requiring any escalation)


Now, let‘s take it to the

next

higher business

level


Remember lecture#3:Project scoping and contracting

Business need & purpose

Project

Shall we initialize this project?


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…


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)


ProjectManagement

PortfolioManagement


ProgramManagement

Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 360, 384


ProjectManagement

PortfolioManagement


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


Portfolio managementis based on strategic management methods

Competitive Forces

Strategy Map

SWOT Analysis

Balanced Scorecard

PortfolioManagement

ROI Analysis

… and many more!


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?






threats



Definemeasurable goals

Defineportfolio alternatives

Where arewe now?

Where do wewant to be?






threats





Implementportfolio strategy

Selectprojects

Where arewe now?


How do weget there?



Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385

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Requesta project

Problem oropportunity!

business-internalpre-assessment




Collect andassess proposals

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businesscase





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Requesta project


Run projects


businesscase




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(Exe

cuti

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Requesta project


Run projects


businesscase

ProjectManagement

PortfolioManagement

ProgramManagement






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cuti

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Requesta project


Checkresources & portfolio

Report availabilityof resources

Report currentprojects progress Run projects


businesscase





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(Bu

sin

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Requesta project


Checkresources & portfolio

Report availabilityof resources

Report currentprojects progress Run projects

Approveproject candidates


businesscase

projectcandidates


Project portfolio categories


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.


Creating and selecting portfolio options


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


finally, let‘s

bring it all

together



ProjectManagement

PortfolioManagement

ProgramManagement


ProjectManagement




PortfolioManagement

ProgramManagement



ProjectManagement

dozens

some more

less then 5*

up to thousands

hundreds

* In very big enterprises


Your business is comparable to a system of railway tracks

Source: A.W. Scheer


A business process is comparable to a regular train on the track

Source: A.W. Scheer


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/


Business controlling is comparable to therailway control center‘s work

Source: A.W. Scheer



PortfolioManagement

ProgramManagement



ProjectManagement

Strategic Level

Tacticallevel

Operationallevel


Enterprise project management levels

strategic

operational

tactical

Management level



strategic

operational

tactical

Management level

executed

approved

controlled

Project is…

Spending theweekend

at the sea. Going bycar. Avoiding major

highways.


Deliverables / Budget / Schedule


strategic

operational

tactical

Management level

executed

approved

controlled

Project is…

Business Case/Contract

Spending theweekend


highways.



strategic

operational

tactical

Management level

executed

approved

controlled

Project is…

Spending theweekend


highways.

Performance is measuredbottom up!

Only the things you measureyou can manage!



PortfolioManagement

ProgramManagement



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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