lecture_1

14
Printable View of: Lecture 1 - Developing a Program Management Framework and Organizational Strategy and Controls Lecture 1 Introduction This initial lecture in Program Management and Planning explores the problems that can arise in a large federal program and reviews the important concepts introduced in your prior project management courses. We will also distinguish between projects, programs and portfolios and learn why structure matters in setting up your Project Management Office (PMO). Week 1 Readings: Online lecture Kendall and Rollins, Chapters 1–4 Discussions: "Introduce Yourself" "NBT Business System Problems" Assignments: NBT Case Study Please view the video below of your instructor, Virginia Greiman, introducing this week's lecture. Learning Objectives After participating in the learning activities for this lecture, you will be able to: Analyze an actual case study and identify the tools and techniques for turning around a project with serious overruns. Recognize the importance of the project control process in tracking performance. Distinguish between project and program controls and the ways in which a well structured Project Management Office (PMO) can avoid potential problems. Identify the key differences between project, program and portfolio management and why structure matters in setting up your PMO.

Upload: oscarmurray

Post on 17-Aug-2014

121 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: lecture_1

Printable View of: Lecture 1 - Developing a Program Management Framework and Organizational Strategy and Controls

Lecture 1 Introduction

This initial lecture in Program Management and Planning explores the problems that can arise in a large federal program and reviews the important concepts introduced in your prior project management courses. We will also distinguish between projects, programs and portfolios and learn why structure matters in setting up your Project Management Office (PMO).

Week 1

Readings: Online lecture Kendall and Rollins, Chapters 1–4

Discussions: "Introduce Yourself" "NBT Business System Problems"

Assignments: NBT Case Study

Please view the video below of your instructor, Virginia Greiman, introducing this week's lecture.

Learning Objectives

After participating in the learning activities for this lecture, you will be able to:

Analyze an actual case study and identify the tools and techniques for turning around a project with serious overruns.

Recognize the importance of the project control process in tracking performance.

Distinguish between project and program controls and the ways in which a well structured Project Management Office (PMO) can avoid potential problems.

Identify the key differences between project, program and portfolio management and why structure matters in setting up your PMO.

Page 2: lecture_1

NBT Case Study and Assignment Overview

NBT Case Study

In your assignment and discussion questions this week you will not only develop an appreciation for the important lessons learned in your prior courses on project management, but also you will learn what can go wrong when an organization fails to implement the essential policies, procedures, and processes highlighted in the Project Management Institute's PMBOK Guide and in scholarly research and writing on Project Management. The NBT case study involves a real life project designed to help you develop your critical thinking and to discover why some projects are hugely successful and why other projects fail.

The NBT case study involves an actual National Aeronautics and Space Administration (NASA) customer, the National Oceanic and Atmospheric Administration (NOAA). In responding to your assignment and discussion questions, utilize all the processes, tools and techniques from your prior courses and experience – as well as the knowledge you've gained from this week's reading assignment – to help Sarah resolve the many issues she faces in her new job as project manager.

NASA is an excellent example of a large federal agency that structures its organization to focus on project and programmatic work. As reflected in the organization chart (below), the Administration is organized by Missions and Centers that are supported by functional offices such as the chief financial officer, external relations, innovative partnership program, and institutions and management. Among its many projects and programs are the following:

Mars Odyssey – This orbiter is mapping the mineralogy and morphology of the Martian surface.

NOAA Environmental Satellites – NOAA-N is the latest in a series of polar-orbiting satellites that will collect information to improve weather prediction and climate research across the globe.

Terra – This multinational partnership between the U.S., Canada, and Japan is helping us better understand and protect our home planet.

Appendix: See National Aeronautics and Space Administration

Page 3: lecture_1

Distinguishing Projects, Programs, and Portfolios

As a review and introduction to the relationship between project, program and portfolio management, I have highlighted in this lecture the important distinctions between each of these management structures. The reading assignment for this week in your Kendall and Rollins textbook describes the important strategies essential to the introduction of a Project Management Office. The reading will help you understand the important differences between projects, programs, and portfolios and why it is important to build a PMO that will be accepted by the senior executive team in the organization.

Kendall and Rollins (2003) describe the following four processes as critical to a PMO's delivery of its promises:

1. Choosing the right project mix

2. Linking the executive team's strategies to current and planned projects

3. Managing the project portfolio correctly

4. Measuring the PMO to tangibly improve project performance relative to the executives' strategic goals

Page 4: lecture_1

The authors use examples and real life case studies from a balance of industries, both for-profit and non-profit, to highlight further that without all four pieces correctly implemented, the PMO will likely be short-lived. This is an extremely important exercise, and you should compare and contrast the extensive body of research on program management with your authors' research and conclusions in these first four chapters.

What is a Project?

As you have learned in your prior courses projects have the following characteristics:

Projects are unique Projects are temporary in nature and have a beginning and an end Projects are completed when the goals are achieved or when the project is no

longer viable Project success is defined as meeting or exceeding the requirements and

expectations of your stakeholders What is a Program?

The terms project and program are often used interchangeably and can create confusion as to the real meaning of the terms. Although these terms are related, they are not the same. In this course we will carefully distinguish between projects, programs and portfolios.

A program as defined in PMBOK, is a logically related group of projects. A program can also be a larger project that has been broken down into smaller projects. Frequently, companies manage projects together to gain benefits that would not be available if they managed them separately. Companies also manage projects together because they use similar processes that will benefit from coordinated management. It is important to remember that a program should be utilized only when there is value added!

For example, a large construction project might have a program to undertake the reconstruction of an inner city. A good example is Boston's Big Dig. Within that program were the following individual projects:

Complete two miles of underground highway within the city Build a tunnel to connect the city with an airport Develop a landfill to address environmental requirements Construct an interchange to connect local roadways with an inner-state highway

system What is Program Management?

"Program management is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually." Program

Page 5: lecture_1

management requires a centralized management organization to achieve the program's strategic objectives and benefits (PMI 2004).

As you learned in your project management courses, project management is accomplished through the application and integration of the project management processes. This raises the question of how program management is accomplished. The answer is simple – through the same processes used to manage projects. However, in applying the processes of initiating, planning, executing, controlling, and closing programs the goals are quite different.

I have provided a few examples in the chart below.

What is the Role of the Program Manager?

Similar to a project manager the program manager has many roles. However, the program manager must manage both the strategic business goals as well as the operational aspects of a program. One of the most important attributes of a program manager is establishing a vision that inspires the program team, the project managers, and project teams to follow that vision. The operational aspects include developing cross project collaboration and deliverables, establishing centralized processes, leveraging resources across projects, monitoring customers, managing budgets and finances, and seeking opportunity and partnerships both external and internal to the larger organization. The chart below demonstrates the core commitment of a program manager and the importance of meeting the needs of all of the program's constituents including the strategic goals of the larger

Page 6: lecture_1

organization, the needs of its customers and the market, the program's agreements and contracts, and the projects and teams it oversees.

What is a Project Management Office (PMO)?

"A Project Management Office (PMO) is an organizational unit to centralize and coordinate the management of projects under its domain. It can also be referred to as a "program management office," "project office," or "program office" (PMI 2004). As further defined by Kendall and Rollins, "It must drive a much higher return on the investment than any organization makes in projects" (2003). Because PMOs can oversee the management of projects, programs, or both they can provide a wide variety of functions and services including coordinated training, technology support, and standardized processes, policies and procedures. Key features of PMOs include the following:

Shared and coordinated resources Development of project management methodology, best practices and standards Clearinghouse for policies and procedures Centralized configuration management for all projects Centralized risk management Centralized claims and change control Enterprise-wide project software Centralized communication Centralized monitoring of timelines and budgets Coordination of overall project quality standards Alliance with strategic needs Establishment of mandates that include an enterprise perspective

Page 7: lecture_1

Management of major program scope changes (viewed as potential opportunities)

Shared organizational resources across all projects Consolidated reporting and an enterprise view of projects under its purview Management of overall risk, overall opportunity, and the interdependencies

among projects

Portfolios and the Relationship between Program Management and Portfolio Management

"A Portfolio is a collection of components that are grouped together to facilitate the effective management of that work so as to meet strategic business objectives" (PMI 2004). Unlike Program Management, the projects or programs in a portfolio may not be related or interdependent. Portfolios are usually managed at the highest levels of an organization and the portfolio manager is charged with managing the portfolios based on specific goals.

The major goal of portfolio management is to align the portfolio to the strategic objectives of the company. The portfolio provides an overview of the organization's goals, mission and strategic objectives.

Page 8: lecture_1

Comparison of Project, Programs and Portfolio Management

The diagram below presents the hierarchy of projects, programs, and portfolios. At the top of the pyramid is the CEO representing the highest authority in the organization. Below the CEO are the strategic managers who report up to the CEO for approval of strategic management plans. The portfolio manager is required to align business changes with the strategic goals of the organization and focuses on adding value to the portfolio through strategic program and project selection. The program manager is obligated to meet the goals of the strategic plan as well as provide the vision and leadership for the projects under its control. Project managers are responsible for assuring the requirements of the project are delivered and for managing the project team. At the bottom of the pyramid are the team members who produce the project deliverables in accordance with the project requirements.

Page 9: lecture_1

The chart below highlights the important differences between projects, programs and portfolios discussed in this lecture.

From PMI, 2006 and Sanghera, 2007.

References

Kendall, G.I., & Rollins, S.C. (2003). Advanced Project Portfolio Management and the PMO: Multiplying ROI at Warp Speed. Fort Lauderdale, FL: J. Ross Publishing.

Project Management Institute. (2004). A Guide to the Project Management Body of Knowledge: (PMBOK Guide). Washington, DC: PMI.

Project Management Institute. (2006). The Standard for Program Management. Washington, DC: PMI.

Page 10: lecture_1

Sanghera, Paul. (2007). PgMP: Program Management Professional Exam Study Guide. Hoboken, NJ: Wiley.

NBT Case Study Analysis

Following this page is the actual NBT Case Study assignment. It can also be found by selecting the Assignments button in your Course Tools menu on the left. Once you have submitted the assignment and the deadline for the assignment has passed, a new page with my solutions will be available in this lecture for you to review.

The NBT Case Study assigned for this class (and attached below) was developed to demonstrate the important concepts raised not only in this week's materials, but also in the materials from your previous project management courses. In responding to the questions below, think creatively about the key problems in the NBT system and how you would resolve them. Assume for the purpose of question 3 that you are a Program Manager as distinct from a Project Manager and in response to the questions raised describe how the role of program manager would have differed from the role that Sarah played as a Project Manager.

1. In the NBT case, how realistic is the budget request that was given to NOAA prior to Sarah's arrival on the project? Describe how you would determine the actual budget based on the facts given and drawing upon the tools and techniques from your prior project management courses.

2. Of all the problems faced, which problem has the potential for causing the largest overrun for the project? How would you have addressed this problem if you were the real life Sarah?

3. How could a well organized Project Management Office (PMO) have avoided the problems that arose in the NBT Project? In responding to this question draw upon the various strategies and best practices for PMOs discussed in Kendall and Rollins. Explain how as a Program Manager you would have structured your PMO so these problems could have been identified and dealt with early on. Would you recommend an Authoritative PMO as discussed in chapter 2 of Kendall and Rollins, or would another type of PMO work better? How would you convince your CEO that a PMO would have prevented the problems that arose in the NBT project?

Submit the completed document using the Attachments tool on this page. Please be sure to include your own name in the filename, last name first then first initial (for example: doej_assignX.doc) and in the text of the document, so your instructor/facilitator always knows whose submission he/she is reading.

Need Help?

For clarification regarding the assignment details, contact your instructor.

Page 11: lecture_1

For help uploading files, go to the Technical Support page in the Syllabus.

Page 12: lecture_1

Office of the

Administrator

Administrator

Deputy Administrator

Associate Administrator

Chief of Staff

Chief Safety & Mission Assurance

Inspector General

NASA Advisory Groups Chief Engineer

Aeronautics Research

Exploration Systems

Science

Space Operations

Chief Financial Officer

Chief Information Officer

General Counsel

Innovative Partnership Program

External Relations

Chief Health & Medical Officer

Institutions & Management

Mission Directorates Mission Support Offices

Strategic Communications

Budget Management and Systems Support Diversity and Equal Opportunity* Headquarters Operations Human Capital Management Infrastructure Internal Controls and Management Systems NASA Shared Services Center Procurement Small Business Programs*

Education Legislative and Intergovernmental Affairs Public Affairs

Ames Research Center

Dryden Flight Research Center

Glenn Research Center

NASA Centers

Goddard Space Flight Center

Jet Propulsion Laboratory

Johnson Space Center

Kennedy Space Center

Langley Research Center

Marshall Space Flight Center

Stennis Space Center

National Aeronautics and Space Administration

Program Analysis & Evaluation

Program and Institutional Integration

* In accordance with law or regulation, the offices of Diversity and Equal Opportunity and Small Business Programs maintain reporting relationships to the Administrator and Deputy Administrator.

Security & Program Protection

Page 13: lecture_1

The NBT Project Control Case Study

Sarah put down her report and gazed out of the window. She was anxious about her new job. She received a call three weeks ago from the Deputy Director of Flight Projects, Charlie Jones, asking her to consider taking over the business operations of a large satellite development project called NBT in the position of Deputy Project Manager for Resources (DPM/R). Charlie told her that this high visibility project needed someone with a strong financial background and that he was confident that she was the best person for the job. She was aware that the project was in the midst of an Inspector General (IG) audit and had heard rumors that the project manager, Henry Mabie, was very demanding. Always willing to take on a challenge, Sarah accepted the job. Now, after interviewing her new staff and reviewing reports, she knew that she would have to make major changes in the business operations to regain the confidence of the project’s customer, National Oceanic and Atmospheric Administration (NOAA). She wondered if she should have turned down this job offer.

NBT was an operational weather satellite program and the project team managed the development, launch and operations of many satellites in all phases of the lifecycle. The project had started many years before Sarah became the DPM/R and had enjoyed a healthy budget. In fact, the budget was so fat that the project had accumulated over a year’s worth of uncosted residual funds from the nine previous fiscal years. Congress had recently become aware of the large uncosted carryover and had requested that the NOAA IG audit the project’s finances to determine if appropriated funds were being used as directed. Since NOAA was issued “no year” funds by Congress, the nine years worth of residual funds could still be obligated for activities in the current fiscal year. When the congressional staff realized that the old money was not being liquidated and remained available for use at both NASA and NOAA, they notified the congressional oversight committee. With the IG’s confirmation that a full year’s worth of funding was indeed unobligated by the National Aeronautics and Space Administration (NASA), Congress cut NOAA’s budget request by the same amount and directed NASA and NOAA to use the old funds for the coming year. The process to move the funds into accounts that could be used in the NASA accounting system was long and difficult, and Sarah knew that her staff must start working on this process right away. She also knew that she would have to examine all of the other business operations to determine if there were any other systemic problems.

During her initial meeting with the NBT Schedule Manager, Sarah learned that the spacecraft contractor, Acme Space Company, had built the satellites at the same facility in Princeton, New Jersey for more than 20 years. The technicians and engineers on the production floor knew what they were doing, and seldom needed to consult schedules and drawings as they completed the hardware. In fact, they didn’t worry about updating the detailed schedules and drawings because it would have just taken up their time and kept them from getting the “real work” done. Consequently, the contractor’s master schedule did not always reflect the true status of the project and seldom had the same dates as the production schedules. NASA managers were aware of this practice and concurred with the need to keep the work moving. They compensated for the disconnect by making adjustments to Acme Space Company’s schedules when they reported the project status to NOAA.

Sarah also became aware that the NBT Deputy Project Manager, Sam, was proud of his ability to convince Acme Space Company to accept engineering changes without formal contractual direction. Right before the Performance Evaluation Board meetings, Sam would ask the contractor for engineering change concessions, and since the contractor was eager to please Sam, they agreed to do the additional work at no cost to the government. Sometimes, when the cost of the work was too high to overlook, Acme Space Company would request that Sam promise to issue contractual direction for the work at some point in the future. Sam always agreed to this arrangement because he felt that negotiating the cost after the work was done would be more beneficial to the government than negotiating an inflated proposed amount. The arrangement pleased Sam because he felt that he was saving the taxpayer a lot of money. Acme Space Company’s management, however, was growing increasingly nervous because they

Page 14: lecture_1

were building up a large backlog of proposals with no contractual documentation from the contracting officer. The Acme Space Company project manager, Willis, told Sarah that he was concerned that some of the changes might also impact the completion schedule of the contract. Sarah asked Willis for a list of the outstanding changes, and Willis agreed to compile the list.

As Sarah reviewed the Acme Space Company earned value data, she noted that most of the variance analysis reports stated that no meaningful analysis was possible because the plan didn’t reflect the work actually being done. When Sarah asked about this situation, Willis told her that Acme Space Company would not reflect proposed changes in the performance measurement baseline until they were negotiated. In this way, he could ensure that his baseline was never above the contract value. He went on to explain that the baseline was only updated when Sam gave Acme Space Company permission to update. Sam was sensitive to contractors re-planning their work all the time, so he didn’t allow them to do so unless he concurred. Willis explained that this caused the Control Account Managers (CAMs) to deny ownership of the baseline. Essentially, the Earned Value Management (EVM) data was prepared because the contract required the data, but no one really had any faith in the data. Indeed, Sarah noted that the monthly earned value and actual cost had negative values in some cases, and the actual cost exceeded the estimate at completion in a few elements. Willis told her that it had been several years since a comprehensive look at the estimate at completion had been performed.

Sarah also realized that Acme Space Company, at Sam’s direction had changed some of the standard earned value rules and terminology. The Defense Contract Audit Agency (DCAA) was frustrated that the Earned Value Management System (EVMS) data for NBT was inconsistent with the rest of the Princeton facility’s system. DCAA also pointed out that the facility staffing plan did not match the Performance Measurement Baseline (PMB) staffing plan, nor did the actual staffing levels match those of the earned value reports. Acme Space Company explained that the time collection system was manual and that many people submitted their timecards late. When this happened, an adjustment was made in the subsequent pay period to the staffing report, but not in the Contract Performance Report.

Finally, Sarah was faced with an impending closure of the Princeton plant due to the consolidation of defense contractor facilities at the end of the “Cold War”. Acme Space Company would move four satellites in various stages of production to Los Altos, California, along with about 20 of the senior engineering managers. Everyone else (250 people) in the Princeton facility would be given early retirement or lay-off slips within the next year. The Los Altos accounting and earned value systems were not the same as those used in Princeton, so a transition plan was needed to ensure data integrity and continuity during and after the move.

As Sarah watched the approaching thunder storm, she wondered what the next year would bring and which problem to tackle first.