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TRANSCRIPT
Project Sponsorship
This SkillPower workshop is for managers who are or will be project sponsors. The secondary audience is project managers – those most dependent on project sponsors to set the stage and support their success.
“Excellence in project sponsorship can beviewed as a competitive advantage.”
KPMG NZ Survey
Jim Young
Jim Young FNZIM is a Project Management Professional (PMP) and PRINCE2 Practitioner who holds a MBA in International Management and a Doctoral degree in Business Administration. Initially educated at Hokitika District High School NZ and Duntroon Military College in Australia, Jim served as a career officer in the NZ Army, and then managed a commercial transport organisation, after which he joined NZIM, becoming their Principal Consultant before establishing his own training company SkillPower Ltd.
Jim has managed a wide variety of projects and has written several papers and two substantial textbooks on project management, and developed a number of management handbooks for organisations. Jim has recently published a comprehensive book on project risk management - “Managing Murphy”. He is familiar with most project management frameworks including the PMI PMBOK and UK PRINCE2
and keeps up to date with developments in this emerging profession and with leadership and management generally.
Jim is recognised as a capable, knowledgeable and enthusiastic trainer. He has a practical, participatory and interactive workshop style.
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Learning objectives
On the completion of this half-day workshop, participants will be familiar with:
1. Project management organizational structures and respective roles and responsibilities of the project sponsor, project steering committee and project manager, credentials needed to be an ef-fective sponsor, and how to run a steering committee.
2. Overview of the project life cycle and fundamental principles and processes needed for successful project management.
3. Project conception and selection process and attributes including strategic alignment, preparation and content of project concept checklist, definition statement, business case and charter docu-ments, and updating these as required, selecting the project man-ager, enabling their success, establishing reporting and control ar-rangements, and principal stakeholder management.
4. Approving the project implementation plan, monitoring project management efficiency and effectiveness, and approving as ap-propriate variations, and risk and issue responses that are beyond the project manager’s delegated authority to implement.
5. Assessing and reporting project management efficiency, and tracking and achieving post-project business case outcomes and benefits.
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Foreword
Effective governance is essential for project success. It involves ensuring that the right projects are done properly. The project sponsor’s role in governance includes owning the business case, being responsible for ensuring that promised benefits are harvested, and acting as de facto governor of the project.
Project sponsors are typically those who have authority to approve projects, appoint project managers, allocate resources to projects, and provide higher-level direction to ensure successful completion of projects and delivery of their benefits.
The sponsor is the manager in the performing organisation who authorises the project, allocates funds and other resources to perform it, and has ultimate responsibility for its success.
Conceptually, the sponsor has a business need for the project, the organisation grants the sponsor the money and resources for the project, and the sponsor then contracts with the project manager to undertake the project.
In project organisation terms, the project manager works for the project sponsor, who works for the business. The sponsor’s focus is on the project business objectives. The sponsor usually chairs the project steering committee, which includes managers from those functional departments involved in resourcing the project and/or realising the project benefits.
While the project manager performs the day-to-day function, the sponsor provides the executive authority needed to overcome organisational obstacles. The sponsor ensures the overall viability of the project and ‘owns and maintains’ the business case.
It is naïve to expect excellent sponsorship practices to happen by accident or wishful thinking. Sponsors need training and practical experience. Indeed, one of the most common reasons why projects fall short is a lack of suitable sponsorship, according to the KPMG NZ Project Management Survey 2010.
Being an effective project sponsor requires striking a balance of involvement and trust in the project manager and project team. Some sponsors are passive, others micromanage, and some are too busy attending to other responsibilities. Project sponsors must effectively communicate the organisation’s vision, goals and
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expectations to the project team throughout the life cycle without crossing theline into micromanagement or what I call ‘snoopervision.’ The project manager and sponsor need to agree their respective roles and aim to work in coopertive harmony.
The sponsor must also keep the organisation apprised of the project’s progress and benefits, advocating for it at every turn. The sponsor should cultivate a positive environment and generate a positive buzz for the project’s benefits and do so each day. They need to constantly let people know what the project is and why it is important to the organisation. It’s a difficult role, but one that can ensure project success.
Without clear, effective sponsorship, a project is unlikely to have the means to gain and retain support within the organisation, overcome the tendency to resist change and secure necessary resources.
Unfortunately, good sponsorship is often harder to find than is good project management and significantly less investment, focus and support is usually given to managers who fulfil the project sponsor role. However, it’s reassuring that your organisation recognises the importance of this role and has organised this seminar. I trust you find it useful.
Jim YoungProject Management Trainer and Consultant
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Terminology - what is a project sponsor?
Every discipline has its terminology, an agreed understanding of which should help communications. It can be frustrating, but every discipline has its peculiar terminology. Some common project management terms are defined at the rear of this book. A project methodology usually consists of principles, processes and a glossary of terms.
However, we need to be careful when communicating particularly with our clients and external stakeholders, some of whom could find our use of specialised terminology patronising or even alienating. It’s seen as linguistic tribalism. The use of such language can be annoying and even intimidating if you’re not in the tribe. Its use might also cement unfortunate stereotypes.
Generally we understand a ‘sponsor’ to be one who assumes responsibility for another person or group during a period of instruction, apprenticeship, or probation.
In the project management context, the term ‘sponsor’ first emerged in 1990 when Briner, Geddes and Hastings, in their book, ‘Project Leadership’, described the project sponsor as the ‘project manager’s boss.’ Turner (1993) saw the sponsor as the ‘owner’ of the project, and Morris (1994) suggested that the project sponsor was the project advocate who provided internal political support for the project, secured its funding, and ensured it delivered the desired business outcomes. And this is pretty much today’s description:
“The project sponsor is the executive who ensures the project is focused throughout its lifecycle on achieving its goal and delivering a product or service that will achieve its forecast benefits.”
Some other descriptions are:
“The project sponsor is the business advocate and is responsible for ensuring that the conditions for project success are achieved and for ensuring the overall viability of the project. The project sponsor is the owner of the business case and is the primary risk taker within a project.”
“The project sponsor is the governor of the project who wants the project, usu-ally because it will benefit them or their organisation in some way.”
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“The project sponsor is the person with formal authority who is ultimately re-sponsible for the project. A sponsor may be a senior manager or a junior man-ager depending mainly on the size of the project.”
“The project sponsor authorises the project or programme, has a real stake in the outcome, and is accountable for the project’s performance.”
The project sponsor is the person or group that funds the project and creates the environment that allows the project manager to succeed.”
“The project sponsor is the de facto project ‘governor’ who ensures that the project purpose is appropriate to the organisation and that a suitable structure is in place to achieve that purpose.”
“The sponsor defines, defends and supports the project from conception through to benefits realisation.”
The project manager is the person accountable to the project sponsor for the day-to-day management of the project to produce the final deliverable on time, to the right quality, and within budget. Because the sponsor and the project manager will ideally be working closely from project start to finish, both need a clear understanding of their respective roles that they develop together. A sponsor who gets immersed in the detail of the project’s daily execution makes it difficult for the project manager to fulfil their role. In essence, it would be fair to say:
The project sponsor authorises the project and is mostly benefits focused. The project manager executes the project and is mostly delivery focused.
Project Deliverables Project Benefits
new product new technology updated code of ethics new OSH procedures revised HR protocols new processes software training course revised strategic plan reduced cycle time
increased revenue reduced costs improved image improved safety reduced turnover reduced wastage improved productivity better teamwork time saved
Hierarchy of project work
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Portfolio of Projects
Mega, Master or Super Projects, Programmes
Projects
Subprojects, Summary Tasks, Phases, Stages, Key Deliverables
Activities or Tasks
Subtasks
Sub-subtasks
Work Packages
There is no universal agreement, but the generally accepted hierarchy of project work is shown here. In fact, a Work Package might be viewed as small project that we do ourselves, delegate to a staff member, or contract out.
A programme consists of two or more closely related projects, sometimes the consequence of breaking up a single project that has become too large to properly manage, whereas a portfolio is a number of related and unrelated projects assigned an organisation, team or individual. Thus, an organisation can possess a portfolio of projects and so can an individual.
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Important Reality Check
If these parameters have already been set, conduct a feasibility study to assess our chances of success, and if need be, suggest how these parameters might be relaxed to give us a fighting chance of success. As a minimum advise our sponsor of our reservations, preferably in writing, since memories often fail at project completion or termination.
Goal
Purpose
Scope
(benefits)
(deliverable)
(work)
Cost
QualityTime
(schedule) (specifications)
(budget)
$ Q
Time
Scope Fit forPurpose
Time and Cost
Gold-plated
$
TotalCost
Time
CrashDuration
Project parameters
Typically the sponsor sets the purpose, goal and parameters, and the project manager works within the parameters to achieve the goal. Together they may need to agree some trade-offs among these parameters as reality unfolds.
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Project organisation
People are still struggling in their attempts to define the role and position of the project sponsor. Some people use the terms ‘sponsor’, ‘champion’ and ‘owner’ interchangeably. Essentially sponsors are the bridge that connects project work effort and the organisation’s strategic goals as established by senior management.
team memberproject managerproject sponsor
steering committeeproject auditor
project consultantcustomer
reviewsdirectsadvisesdrives
deliversfundsuses
Of course the sponsor is not merely responsible for funding the project and showing up when it’s completed. The sponsor has an overall responsibility for project success and realising its value for the organisation.
CEO / GM
Sponsor
Project Manage
Steering Committe
Project Management Office
Users
Project Team
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Matrix organisation
The matrix organisation can be a recipe for conflict between project managers (resource borrowers) and line managers (resource owners), where the project sponsor’s intervention and assistance is sometimes needed to ensure the project has timely access to the required functional resources.
Also, while line managers have a resonsibility to develop their staff, project managers may be keen to avoid time-consuming training, coaching, counselling and mentoring of their ‘borrowed’ team members at least in terms of their technical expertise. Nevertheless, a project usually offers plenty of on-the-job opportunity for non-technical training about which the project manager and line manager should cooperate in the interests of the staff member’s on-going development. One means to help is to buddy up new project team members with more experienced project team members.
Project teambuilding is important to ensure that all team members cooperate towards achieving the same project goal. A project team is a peculiar team in that each member is likely to have another boss – their line manager. Also, the composition of the team is likely to change as the project proceeds and different skill sets are needed. Thus, time and budget for teambuilding needs to be built -into the project plan.
Conflicts occur for a variety of reasons. Project managers report that conflicts typ-ically arise over the following seven points of contention:
1. Priorities of tasks and objectives. Participants often have different views about the proper sequence of tasks and about the importance of tasks and objectives. Such differences not only occur within the project team but also between the project team and functional departments, as well as between the team and the client.
2. Administrative procedures. Disagreements often arise over how a project will be managed---for example, over the definition of the project man-ager's reporting relationships and responsibilities, operational require-ments, interdepartmental work agreements, and levels of administrative support.
3. Technical opinions. The less routine a project, the more likely it is that
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there are differences of opinion about the "best way" to accomplish the task. Disagreements may arise over specifications, technical trade-offs, and techniques to achieve the required performance.
4. Staffing and resource allocations. Conflicts arise over how best to allocate people to various projects and within project assignments. One team member complains that she always gets the "grunt work" while others get the glamorous assignments. Not only do individuals disagree over which projects their functional manager should assign them to, but they also face competing demands from their project manager and functional manager. This leads to both interpersonal strife and personal stress.
5. Costs and budgets. "How much is this going to cost?" and "Why is this costing so much?" are frequent sources of disagreement throughout a project. These differences often arise because it is difficult to estimate costs in the face of uncertainty. A functional manager, for example, may see the funds allocated by the project manager as insufficient for the work requested, while the client may feel that costs are too high.
6. Schedules. A constant source of tension is the client asking "How long is this going to take?" while the project team feels "I don't have enough time allocated to do a quality job." The tension really arises because we are dealing with estimates about the future, and the future can seldom be predicted with certainty. At the other extreme, if in making our esti-mates we take into account all the possible things that could happen, the project might never be completed. Further, tension is often generated around the sequencing of events, as in the case of "Finish the documen-tation on this project before starting to programme the next portion of the new accounting system."
7. Interpersonal and personality clashes. Conflicts arise not just over techni-cal issues but also over "style" or "ego centered" issues like status, power, control, self-esteem, and friendships. Such conflicts may emerge from real personality and style differences, but often they are based on differences that emerge from departmental or organisational factors like varying past experience and different perspectives on time horizons.
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Chief Executive
shared resource
Project Team
Project TeamProject Manager (resource borrower)
Project Management Office (if established)
Staff expert and member of two project teams.
Functional Manager (resource owner)
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CONCEIVE
DEVELOP
EXECUTIVE
FINISH
PHASES
Idea
Charter
Plan
Deliverable Report
Deliverable
Plan
Charter
INPUTS OUTPUTS
PRODUCE (work the plan)PLAN (plan the work)
CONCEIVE DEVELOP EXECUTE FINISH
Diminishing uncertainty
and stakeholderinfluence
85%100%
Percentagecomplete
andfinancial
commitment or stake
20%
5%
phase gatePhasegate
Project lifecycle
The project manager’s main responsibilities mainly span the Develop, Execute and Finish phases, whereas the project sponsor’s responsibilities span the entire project lifecycle including project Conception, plus the project product or service lifecycle or lifespan when project outcomes and benefits are achieved. The project will normally have been closed before the benefits have been realised.
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As a project sponsor it is important to understand the challenges inherent in projects. Any of the following may need the sponsor’s intervention should the issue be beyond the project manager’s authority to resolve. However, a top problem could be inert governance.
Inert Governance. The project sponsor and steering committee don’t always provide appropriate higher-level help and guidance, sometimes because they don’t understand their roles and responsibilities, sometimes because the spon-sor does not have sufficient decision-making authority. Also, they may be too high or too low in the organisation or meet too much or not enough with the project manager. The sponsor’s and steering committee’s terms of reference need to be clearly stated. Effective governance is critical for project success. Sponsors need to be willing and able.
Clients. Essential to any project, clients notoriously mis-state what they want, and what they want isn’t always what they need. Furthermore, clients change their minds during the project. There is a need to define the project as clearly as possible with the client in the first instance and also agree how to manage those inevitable changes as needs continue to evolve.
Risk. A project is unique, and as such, risk and uncertainty may be significant, especially at the start of the project. Also, sometimes there is a tendency not to disclose risk or to understate risk to protect the project status and team members’ morale. There is a need to honestly, objectively, comprehensively and continuously analyse risk and pre-empt problems throughout the project.
Constraints. Projects usually have tough financial and resource constraints, and deadline urgency. Such constraints are not necessarily frustrating provid-ing they are realistic. However, on occasions sponsors have been guilty of un-der-estimating project costs project estimates to ensure a project’s selection. Later, funding to meet true project costs may not be readily available. There is a need to check the feasibility of working within proposed constraints, and make recommendations, preferably in writing for their relaxation where appro-priate, before the project is planned in detail.
Scope Creep. The continual addition of unplanned work (‘creeping elo-quence’) to the project has been likened to death by a thousand cuts. The ac-cumulated consequence of such uncontrolled changes can be project failure. There is a need to clarify what’s within and outside scope. Scope also needs to be reviewed and revised where appropriate over the project lifecycle, and all scope changes need to be formally authorised against the business case.
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Other Work. Projects often interact with other projects and always interact with the organisation’s ongoing business. Projects are often superimposed on other work, which can result in untenable workloads. Also, projects can divert key resources from normal operations to the detriment of business-as-usual. Workloads need to be planned, prioritised and monitored. Project people may need to be temporarily relieved of other responsibilities. Careful resource scheduling is essential. Some work may need to be outsourced.
Contractors. A project often involves consultants, suppliers, contractors and subcontractors. Thus, on occasions, project success seems largely beyond the project manager’s immediate influence. Contractors need to be carefully selec-ted, their tasks unambiguously defined, and their performance regularly mon-itored. We must ensure too that they can manage their subcontractors.
Conflicts. Projects can be adversarial endeavours. Project managers may find themselves in the middle of conflicts – faced with opposing views from tech-nical experts who each are convinced they are right. The most effective project managers relish such conflict. They see it as an opportunity to facilitate con-structive debate and achieve a successful outcome that is good for the project, good for the organisation, and probably good for the project manager’s career prospects.
Change. Projects change and cause change. People are usually apprehensive about change and may not be very cooperative, especially if they feel the pro-ject could disadvantage them. Project managers need to be change managers. Communications and involvement are essential.
Estimates. Whenever the CEO meets us in the lift and asks for an estimate, we respond with an optimistic, ‘seat-of-the-pants’ guess, which the CEO then ad-opts as a firm target. Estimates evolve. They have a range of possible results, and become more accurate as planning proceeds. Avoid premature commit-ments, indicate likely accuracy of our estimates, and document estimating as-sumptions.
Related Tasks. A project consists of interdependent tasks where delays to some tasks can put the entire project schedule in jeopardy. Task delays are in-variable passed on, whereas early finishes seldom are. Those tasks whose delay might cause a delay to the project completion date (ie, critical tasks) need to be identified and carefully monitored from a scheduling perspective.
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Stakeholders. Projects often have a variety of stakeholders with conflicting needs. The project manager must keep disparate stakeholders moving in har-mony. Better to be proactive than reactive in our stakeholder liaison.
User Requirements. When we get to project execution, we discover that the so-called user requirements are a compromise, infamous for their complexity, incompleteness and constant modification. Accept that user needs evolve. Keep in touch. Signoff may be essential to discourage never-ending changes. Yet we should avoid premature design freezes.
Team Members. Projects often mean teamwork. The project manager’s chal-lenge is to elicit high performance from a multidisciplinary team that the pro-ject manager may not have selected. They may not have worked together be-fore, may have other agendas, be geographically spread, are also responsible to another boss and are not therefore readily or exclusively available, and the project manager cannot necessary reward them commensurately with their performance. Also, the team often grows and membership changes. Project managers need to be effective leaders and people managers. Teambuilding is an important responsibility. Achieving commitment is essential.
Temporary. Projects are often short-term and expedient exercises. Also, they can be halted prematurely when for example their resources might be better used elsewhere. A project manager therefore is a perishable position. Project team members also work themselves out of a job. This can cause concern par-ticularly when the project nears completion and no other work is in the offing. Redundancy, a certain eventuality in all project work, must be planned for.
Penalties. Projects often have high rewards for success, but the penalties for failure can also be high. Project managers are seen to be as good as their last project! There is a need to learn from both successes and failures to ensure im-provement. A post-implementation evaluation is essential.
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Some reasons for project failure
The project sponsor is ultimately responsible for project success. Some typical reasons for project failure are listed here:
poor scope definition excessive scope change client uncertainty unsuitable contractors changing priorities inadequately defined tasks unclear responsibilities personality conflicts lack of executive support failure to delegate poor teamwork inaccurate estimates inadequate control lack of end-user training lack of authority unfamiliar technology lack of commitment excessive complexity unrealistic expectations poor time management inert sponsorship PMO bottlenecks
unproven methodology insufficient user involvement risks not recognised unreliable suppliers unreasonable assumptions poor communications managerial ego stakeholder conflict organisational politics inadequate planning insufficient funds resource shortfalls requirements misinterpreted lack of historical data hidden agendas no independent audits inexperienced project manager inadequate legal input unclear specifications poor estimating benefits unmanaged benefits poorly articulated
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Sponsorship functions
The project sponsor’s role, functions and responsibilities vary. There is no common job description and their job starts at the very origin of the project. Essentially, the sponsor represents management, provides leadership and governance oversight, establishes and monitors the boundaries within which the project manager navigates the project, and fronts issues escalated by the project manager.
The following specific functions may apply and would need to be agreed at or before project initiation:
Ensure prospective projects are aligned to organisational goals and outcomes, and don’t conflict with core values.
Prepare or oversee the development of the project definition statement and business case that justifies investment in the project and ensure it remains valid.
Organise and chair the project board or steering committee/group.
Appoint and empower the project manager and hold them accountable for meeting objectives and producing deliverables.
Appoint the steering committee (unless the organisation does this) if the size and complexity of the project requires a steering committee..
Facilitate the appointment of project team members and support them.
Prepare or approve and issue the project charter.
Advocate and champion the project at the highest level, protect it from high-level enemies, and maintain its priority.
Monitor the political environment to help project adjust if necessary.
Ensure project funding and timely availability of resources, and stop resources being pulled onto other projects.
Provide high-level direction to the project manager and meet together regu-larly (typically weekly or bi-weekly) to review progress and issues.
Set the risk tolerance box and ensure that risks are properly managed.
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Review and approve the project plan, budget, and final deliverable.
Review project progress at a strategic level and overcome organisational obstacles to project success.
Brief senior management about project progress.
Communicate with key stakeholders.
Approve those variations that impact project parameters beyond the tolerance provided the project manager.
Be readily available and accessible for consultation with the project manager
Advise, motivate, mentor, coach and support the project manager.
Attend project team meetings as need be and undertake project audits and be-nefit realisation reviews.
Accept responsibility for resolving issues escalated from the project manager.
Approve the use of project management reserve funds.
Ensure the project is tracking on time and budget, arrange project audits, and ensure project’s benefits and outcomes are achieved.
Sign off that key project deliverables (outputs) are fit-for-purpose, and ensure that the project also delivers on outcomes and benefits.
Approve project termination or closure and communicate this to the organisa-tion.
Approve the post-implementation evaluation report.
Recognise the project team for progress and successes.
Hold a post-project review to assess the extent to which benefits have been achieved.
Recommend or approve changes to the project management framework.
Which of the above functions could or should apply to your organisa-tion’s sponsors?
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Sponsor selection
Sometimes project sponsors choose to be sponsors; sometimes they are assigned the role without being asked. Not every manager can be a good sponsor. The best sponsors choose to be sponsors, understand their role and possess the right altitude, attitude and aptitude. With regard altitude, the sponsor should have a higher level of authority than the project manager.
Although it is generally accepted that the sponsor should be familiar with principles and language of project management, this is often not the case. Also, the sponsor must be sufficiently senior to provide the necessary support. This means, in the case of cross-functional projects, senior management or executive level. For smaller projects, conducted within the function or unit, it is usually sufficient for the sponsor to be at or near the top level of that function or unit. And it is important for the effectiveness of the sponsor that the role be formally recognised and has visibility within the organisation.
The criteria for selecting a project sponsor depend on the nature of the project and the project culture of our organisation.
Which top ten qualities might you look for in potential sponsors:
They feel the need for change. They are not satisfied with the status quo.
They believe that the effort to change the situation is more attractive than business-as-usual and have a personal passion for, and commitment to, the proposed change.
They are good sales people who can readily convince other stakeholders about the benefits of doing the project and are willing to commit to an active role.
They have vision – a clear, detailed and compelling picture of a desired out-come.
They are consistent in their actions, reactions and behaviours.
They are willing to invest time and energy. They are available.
They care and feel they have a vested interest in the outcome. They have some ‘skin in the game’.
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They place high priority on the value of the project work.
They have a perspective on the future.
They believe that things can be improved through learning from experience.
They understand and use organisational politics.
They are able to make a realistic appraisal of resource needs. They have a sound understanding of the time, money, and people needed for the project.
They have the experience and / or expertise in the areas being changed.
They can anticipate client/customer needs.
They have power, credibility and influence within the organisation
They understand the business and how things get done in the organisation.
They are publicly and privately supported.
They understand project management
They are decision-makers and posses intuition.
They work well with people.
They complement the project manager and others on the project team.
They are knowledgeable in areas where the project manager and project team are not.
They clearly understand the problem to be solved.
They ensure the solution fixes the problem.
They are willing to create relationships.
They know where ‘good enough’ is.
They know the big issues and what is needed to resolve them.
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They know when to pull the plug on the project.
They possess sound business judgement.
And how well do you stack up in terms of your Top Ten? No doubt you have strengths you can capitalise on and weaknesses to also work on.
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Sponsorship commitment
This sponsorship evaluation tool is designed to assess sponsor commitment for a specific project.
1. Are the sponsor’s goals for the project clear?
Unlikely extent Likely
1 2 3 4 5
2. Does the sponsor believe there is a need for the project?
Unlikely extent Likely
1 2 3 4 5
3. Does the sponsor understand the long-term impact of the project?
Unlikely extent Likely
1 2 3 4 5
4. Does the sponsor understand how stakeholders will be affected by the project?
Unlikely extent Likely
1 2 3 4 5
5. Does the sponsor understand the resource needs for project success?
Unlikely extent Likely
1 2 3 4 5
6. Is the sponsor willing to commit resources needed for project success?
Unlikely extent Likely
1 2 3 4 5
7. Does the sponsor convey strong support for the project?
Unlikely extent Likely
1 2 3 4 5
8. Will the sponsor ensure that a validated framework is used to manage the project?
Unlikely extent Likely
1 2 3 4 5
9. Is the sponsor willing to make sacrifices for project success?
Unlikely extent Likely
1 2 3 4 5
10. Does the sponsor have the time available to properly support the project?
Unlikely extent Likely
1 2 3 4 5
Check the next page to interpret results.
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More than 35: Sponsorship should never be taken for granted, but scores in this range indicate that sponsorship commitment is sufficient for project success.
20 to 35: Partial or tentative support from sponsors does not always result in a failed project, but it does increase the likelihood of failure.
Less than 20: Most projects with a score in this range fail to achieve full implementation. A project that is significantly disruptive needs to have a level of sponsorship well above this score. New or strengthened sponsorship needed.
If practicable, the same sponsor should support the project throughout its entire life cycle and during the product life cycle as benefits are realised. In practice, project sponsorship may change during the project. This can cause a loss of focus and momentum that threatens project success. The new sponsor may not have the same sense of ownership or vision for the project as the original sponsor.
If a change of sponsor is unavoidable, what might be done to minimise any disruption or downturn in project performance?
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How NOT to sponsor projects
For sponsors interested in ensuring project failure, here is a list of suggestions:
Refuse to meet with your project manager during the planning phase. If the PM catches you in the restroom or car park, respond to all questions about scope and your expectations by snarling, “Haven’t you started work yet? A good PM would be half done by now!”
When the PM submits a written plan, do not approve it, object to it or don’t even read it. Instead, wait a week and then send the PM an e-mail saying, “Is this really your best work?”
Send the PM a “suggested” organisation and authority chart for the project that has more dashed lines than a complex roadway system and at least nine committees. No individuals should have fewer than five reporting relation-ships.
Once the project starts, make a point of speaking to project team members in the corridor or by the coffee machine. Say things like, “I’m not really sure about this PM. If you have questions, come see me privately; together we should be able to keep this thing on track.”
Attend project status meetings late and only for 5-10 minutes, then storm out, shaking your head and saying, “What a bunch of clowns!”
Use the project budget as a personal checking account, adding tasks and equipment “goodies” to the project scope and giving your political allies pay-offs by adding their “wish list” to the project.
If the project falls behind schedule or runs over budget, disavow all knowledge of it and claim to never have even met the PM or received a status report. If it is a success, still claim that you have never met the PM, but most certainly take all credit for making it happen.
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Sponsorship benefits
What’s in it for the sponsor?
The answer to this question might depend on each project. Key benefits for a sponsor could be:
improved standing, profile and status
exciting to be linked with a high visibility, successful project
image selling opportunity, career development
media opportunities, official launches, presentations, exposure
sense of accomplishment, turning a vision into reality
challenge of completing change within tight constraints
provides experience in governing rather than managing.
Can you add to this list?
Warning: Sponsorship can be time consuming. Sponsors who initiate more than some six projects (even if they are small ones) will probably fail to support adequately at least one of them.
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Some sponsorship problems
Just because we have someone who is willing to sponsor our project doesn’t mean that they are the right sponsor for the project. Possible problems:
sponsors tends to over-control and micromanage
sponsor stays too close to the project manager and team, or too far from them
sponsor isn’t able to spend sufficient time supporting the team due to other work commitments (and thus sends a message that the projectis not important)
sponsor tends to manipulate or overly influence the team
sponsor doesn’t share thoughts and ideas with the team
sponsor doesn’t provide timely responses to escalated issues
sponsor knows very little about project management
sponsor is reactive, not proactive or panics over every issue
sponsor wants too many reports and other administration
sponsor is a poor communicator
sponsor has unrealistic or unachievable expectations
sponsor is too quick to blame team members
sponsor buckles to unrealistic expectations from key stakeholders
sponsor is too concerned about their own reputation, ego and status
sponsor keeps changing the project
sponsor sanitises reports and hides project problems from management.
Sponsor makes the choice of a techical solution without involving the pro-ject team
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Concept check
Ideas for projects need to be given a concept check to weed out the more obvious duds. An example checklist is shown here.
A prospective project need no be assessed “Yes” against all these criteria to warrant its further evaluation.
Project Idea ChecklistThe project idea or request is ___________________________________________________________________________________________________
Does the project idea or request appear to be in harmony with:
Our business purpose? Yes/No
Our core values? Yes/No
Our long term goals? Yes/No
Our current and pending projects? Yes/No
Our existing policies? Yes/No
Is the risk of proceeding likely to be worth the investment? Yes/No
Is the project idea likely to be technically feasible? Yes/No
Is it likely to be a sustainable development? Yes/No
Are sufficient resources likely to be available? Yes/No
Is implementation likely to enhance our public image? Yes/No
Are the benefits of implementation likely to exceed the costs? Yes/No
Is there likely to be sufficient support and demand to proceed? Yes/No
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Determine, confirm, or revise the organisation’s:vision statementmission/purposecore values
Undertake an objective environmental analysis
Formulate business goals and strategies for their achievement
Identify external opportunities and threatsIdentify internal strengths and weaknesses
Business-as-usual work Implement strategies Programme and project work
Project management is the means used by organisations to turn their strategic vision into reality.
Strategic fit is essential
The sponsor must be able to show that a prospective project promises to contribute to the achievement of the organisation’s mission and goals, and is consistent with core values.
In addition, the project must add value – its benefits must exceed its costs and be worth the risk.
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Project selection criteria
The project sponsor is very closely involved in the project selection process. Some of the project selection criteria that typically determine whether on not a possible project should proceed and at what priority are listed here. Which of these is most applicable in your organisation?
1. Strategic Acceptability
Is the project consistent with our organisation’s core business and values?
Will the project contribute to realising our organisation’s vision and business goals?
Does the project promise to exploit our organisation strengths and avoid our weaknesses?
Is the project compatible with our existing and pending projects and routine business?
Will the project enhance our public image?
Will shareholders and the share market react positively to the invest-ment?
2. Investment Appraisal
What size investment is needed?
Will there be sufficient return on the investment?
Is the level of financial risk acceptable?
Will the rate of return, payback period, profitability index, and index of attractiveness be acceptable?
Will there be a positive net present value after future cash flows are discounted? Best case? Worst case?
Will the benefits of proceeding sufficiently exceed costs?
What will be the costs?
What alternative opportunities would we forego?
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3. Technical Feasibility
Is the necessary technology currently available?
Is the necessary expertise and methodology available?
4. Risk Assessment
How precise is the project definition?
How novel and complex is the project?
How accurate are the estimates?
How realistic are the project performance standards?
How proven is the technology and methodology?
Is appropriately experienced expertise available?
How dependent is project success on uncontrollable external factors?
How united are stakeholders?
How supportive is senior management?
Are risk mitigation measures available?
5. Market Factors
Will consumers find the product acceptable?
What demand is expected?
What market share is expected?
What is the ‘time to market’?
Are tariff and non-tariff barriers prohibitive?
What product life is envisaged?
What effect will the product have on existing products?
What will be the promotion and launch costs?
What supply chain costs are anticipated?
Are other value-added features or spin-offs possible?
What will be our competitors’ reactions?
6. Legislative Compliance
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Will the project comply with existing law and regulations?
Will the project comply with pending and projected law and regula-tions?
Is a change of government imminent?
7. Resource Availability
Is funding available?
Will our creditworthiness enable loan money to be raised?
Will financial sponsorship be available?
Will labour and expertise be available?
Will project team member training be needed?
Will materials and supplies be available?
Will machinery and equipment be available?
Will storage and work sites be available?
Will technology, information systems, methods and processes be available?
What are our current and projected resource commitments?
Will external contractors and consultants be needed?
8. Other Factors
What will be the environmental impact? Is it a sustainable develop-ment?
What will be the social impact?
What will be the political impact?
How easy will the project be to implement?
What would be the cost and other consequences of not doing the project? Would there be loss of market share, increased mainten-ance costs, non-compliance penalties?
Are there patent, trademark, research and development, copyright and intellectual property implications?
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Where:
Grade 3 is highGrade 2 is mediumGrade 1 is lowCriterion Weight x Grade = Score
Use decimal points if necessary to more accurately grade each project.
Notes:
Consider each project horizontally against each criterion in rank order of criteria.
Should ties need to be resolved, gather further information about existing criteria, rather than introduce new criteria.
Project Selection Matrix
Project Selection Score Card
Selection models
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Project selection exercise
Complete the following project selection score sheet, which identifies the financial selection criteria, shows the relative importance of each criterion by weight, and includes the selection team’s probability distribution for the prospective project’s estimated performance against each of the criteria. A feature of this tool is it recognises there is some uncertainty about future performance. The different views of the various selection team members can thus be accommodated. Also, this tool is suitable for prioritising projects based on a comparison of their scores.
Project: Prepared by: Date: Version:
Evaluation Criteria
Very Good
5
Good
4
Fair
3
Poor
2
Very Poor
1
Score Weigh Total Score
Strategic Alignment
0.2 0.3 0.3 0.2
10
Benefit/Cost Ratio
0.2 0.6 0.2
9
Reward/Risk Ratio
0.1 0.3 0.3 0.3
9
Payback Period0.1 0.3 0.3 0.2 0.1
6
% Return on Investment
0.3 0.4 0.3
6
Internal Rate of Return %
0.1 0.3 0.3 0.3
6
Total Project Score
Benefits and costs might be quantitative or qualitative, immediate or longer term, direct or indirect, each with varying degrees of likelihood.
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Benefits
The project sponsor must be benefit-focused, yet the formal process of benefits management is a relatively new concept and most organisations have no formal benefits management methodology.
This suggests there is a need for promoting and training people in benefits management. Nevertheless, most organisations now realise they must manage the benefits as well as the costs in order that the project adds value, and that formal benefits management is needed from project conception through the project lifecycle and post-project until the benefits of the project have been fully realised. In summary we should:
identify and quantify planned benefits, and determine how these will be tracked, measured and assessed
identify and assign responsibility for benefit realisation to appropriate line managers and include this requirement in their performance agreements
design the project to obtain optimum trade-off between benefits, scope, time, cost, quality and risk
only consider the project to be fully finished when planned benefits are ob-tained
measure benefits against a known baseline
make benefits tangible whenever possible
acknowledge that there could also be some ‘dis-benefits’ or negative out-comes
continue to review and forecast benefits (and costs) throughout the life-cycle of our project and beyond.
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Pre-project Benefits ForegonePost-project Benefits ObtainedPre-project Cost Post-project Cost
Benefits Differential Cost Differential
Compare Compare
Compare
Net Benefits
Obtaining some form of benefit, whether financial, economic or otherwise, is the reason for undertaking a project. If no worthwhile benefits are identified, the project should not proceed. Project management plays a vital role in meeting delivery targets but, ultimately, it is the realisation of expected (and sometimes unexpected) benefits that will determine project success, and of course that those benefits comfortably outweigh the costs of achieving them.
Throughout the life of a project, the benefits to be realised will change. Some originally identified benefits may not now be possible and additional benefits, not originally expected. During the project there are sometimes opportunities to discover new benefits, which may enhance the project. Accepting the principle that benefits may change over time, reinforces the need for a benefits management process to identify and track benefits throughout the project and product lifecycles.
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Business case
We invest time, money and resources in projects in the basic belief that benefits will outweigh costs. This assessment is the basis of the business case, which is a ‘living’ document to be reviewed over the life of the project.
The purpose the project business case is to document the justification for undertaking the project based on the estimated cost of development and execution against the risks and the anticipated business benefits and savings to be gained. The sponsor, who ‘owns’ the business case, will be keen to monitor the ongoing viability of the project against the business case. The sponsor will need to use the business case to link project deliverables to corporate strategies.
Despite the wide range of possible projects, we can usually trace business benefits back to one or more of the following:
increased revenues, which might be from a new product or service
decreased costs, which might be from less resource use or more efficient resource use
decreased capital by reducing money tied up in assets such as inventory, plant, buildings and equipment
comply with legislation such as health and safety regulations and thus avoid injuries, fines and litigation
reduce business risk that contributes to uncertainty in future costs and rev-enue.
There may be other types of benefits, but most can be linked back to these five categories. However, perhaps the most obvious reason for the business case is to justify the resources and capital investment needed to bring the project to fruition. Yet the business case is more than a simple financial assessment. It’s the one document where all relevant facts are recorded and linked into a cohesive story that tells us:
why the project is needed
how it will solve the problem, take advantage of the opportunity, or enable us to comply with legislation
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what is the recommended solution and how that will achieve the desired benefits
what will happen to the organisation if the project is not undertaken
when the solution will be implemented
how much time, money, people and other resources will be needed to de-liver the solution and realise the benefits.
The business case is the justification for the project and the main project driver. It is ‘owned’ by the sponsor and needs regular review throughout the project.
1. Overview which sets the context and provides a brief description of the pro-posed project, its intended purpose, and its strategic alignment.
2. Assumptions on which the business case is based are identified and docu-mented. These may change as reality unfolds.
3. Options are viable alternative strategies by which the project purpose may be achieved.
4. Cost/Benefit Analysis evaluates the above options against economic, social, environmental and other considerations as appropriate to the organisation’s purpose and the circumstances in which it operates. Each organisation is likely to have a standardised list of such considerations, some of which may be more important than others.
5. Risk Assessment that identifies key risks to the success of the project. Each risk is rated by impact and probability, and mitigation strategies identified as appropri-ate.
6. Benefits Realisation is a sometimes neglected, but nevertheless is an import-ant and integral part of the business plan. Elements usually included in be-nefits realisation or harvesting are:
strategies to achieve each identified benefit
risk to achieving identified benefits including how sensitive the benefits to cost increases and other changes
assigning accountability to develop and implement strategies to achieve benefits
timeframes and how benefits will be monitored and measured.
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The business case lies at the heart of any project. It exists throughout the project lifecycle, and needs to be regularly re-appraised to ensure the project is still a worthwhile investment and that a business need still exists. This re-appraisal would occur at least before project execution, and whenever project parameters and circumstances that justified the investment change significantly throughout project execution, and during the project finish phase.
Benefits may be direct or indirect, tangible (measurable or quantifiable) or intangible, and immediate or longer term, any of which could have varying degrees of likelihood (sensitivity). The most persuasive benefits are direct, tangible and immediate. Always, the most compelling business argument will be that benefits outweigh costs using hard numbers:
VALUE = BENEFITS - COSTS The simplest measure of financial attractiveness is the project breakeven time usually taking into account the ‘time value of money’.
Two common mistakes are to overstate benefits in order to secure funding and to claim the same benefits as claimed by other projects – a duplication or contamination of benefits. We must be confident that the benefit relates to the project. Ask the “so what” question until a benefit emerges or doesn’t.
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Project charter
Our project’s been proposed, defined, passed through a selection committee, and approved. The final step in the project Conceive Phase is the preparation of the project charter, which PMBOK® describes as “a document issued by the project initiator or sponsor that formally authorises the existence of the project, and provides the project manager with the authority to apply organisational resources to project activities. “ It’s a contract between the Sponsor and the Project Manager.
Other project management methodologies may refer to the project charter as a proposal, project brief or terms of reference.
The primary purpose of the project charter is twofold. It acknowledges that project detailed planning should begin and it assigns the project manager. But, let’s look a little closer at the project charter purposes:
Acknowledges that the project should begin. The charter announces to all the stakeholders that the project proposal has received approval and been en-dorsed by upper management. It serves as official notification to the func-tional business units that their cooperation is needed and expected. It’s a clear decision that the organisation commits to the project.
Commits resources to the project. The project charter commits the organisa-tion’s resources to the work of the project. This includes time, materials, money and human resources. Although the precise schedule is yet to be de-termined and project plan and its implementation approved.
Ensures that everyone is on the same page. This may seem obvious, but we would be surprised by how many projects get started without a project charter or its equivalent and very few documented requirements. Perhaps half of the stakeholders think the purpose of the project is to upgrade the network, and the other half think the purpose of the project is to move the servers in the computer room to a new location. That might be a stretch, but see the point. When the purpose, objectives, an overview of the project, and guidelines provided for the project manager are written down and agreed upon, every-one understands the purpose and approach from the beginning and confusion is eliminated.
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Appoints the project manager. In some cases, the project manager is known prior to the creation and publication of the project charter. However, the pro-ject charter serves as the official notification and appointment of the project manager. The project sponsor formally assigns authority and responsibility for the day-to-day management of the project to the project manager. This means that line managers and other resource owners are put on notice that we’ll soon be requesting resources from their areas. Also, stakeholders and team members alike know that we’re calling the shots on project issues. Does this mean that we’re automatically born leaders and everyone is going to do what we say? No way. Just because we have the authority doesn’t mean that people will respect (or respond to) that authority.
Provides an overview of the project and its goal. The project charter is the first detailed stab at describing the project purpose, overview, goal, high-level deliverable(s) and outline work scope, estimated cost and time frame, and other essential details as a basis for detailed planning. All this points us back to good communication skills. A well-documented project charter keeps the team on track and helps maintain the focus on the purpose of the project. However, a clear and concise charter is much preferred to a 30 page document with multiple attachments.
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Power and influence
The sponsor’s position and authority in the organisation are independent of the project and this enables the sponsor to act as a connection between the project and the organisation. The sponsor provides the authority that the project manager often lacks. Common sources of sponsorship authority are:
Legitimate. Formal authority vested in a position or conferred with the spon-sorship appointment.
Evaluation. The ability to assess, document and report project and project man-agement performance.
Reward. The ability to compensate or give rewards.
Coercive. The ability to punish or withdraw privileges.
Personal. The appeal of individuals - being respected or liked for personal characteristics, charisma, mana, trust, loyalty, friendliness, good humour.
Social Capital. The value created by fostering connections between individu-als. It’s political reciprocity – one good turn deserves another.
Expert. Superior knowledge, ability or skills.
Information. Access to information that others find valuable.
Referent. Identification with powerful supporters, key among whom we hope is our CEO and senior management.
Precedence. If other sponsors have overseen a similar project before and it has worked, we may be able to use this precedent as a source of personal power.
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Leaders and managers
Sometimes a distinction is made that sponsors focus on project leadership (effectiveness) and project managers focus on project management (efficiency). Some possible characteristics are listed here:
Leaders Focus On: Managers Focus On:
Selling
Longer Range
Democracy
Enabling
Developing
Challenging
Originating
Inspiring
Risk Taking
Partnering
Effectiveness
Vision
People
Personal Skills
Right Things
Innovation
Coaches
Values-focus
Align
Progress
Involve
Participate
Encourage
Telling
Shorter Range
Autocracy
Restraining
Maintaining
Complying
Imitating
Instructing
Risk Avoiding
Directing
Efficiency
Plans and Budgets
Tasks
Formal Authority
Things Right
Repetition
Controls
Structure-focus
Organise
Status Quo
Solve
Delegate
Monitor and Control
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Sponsor’s leadership qualities
Accessible Empathetic Organised
Adaptable Empowering Outgoing
Ambitious Energetic Passionate
Amiable Enthusiastic Patient
Analytical Experienced Perceptive
Approachable Expressive Positive
Assertive Fair Presentable
Bold Flexible Proactive
Brave Focused Prudent
Candid Forthright Realistic
Charismatic Friendly Reflective
Cheerful Fun-loving Reliable
Collaborative Goal-setter Resolute
Committed Good-humoured Respectful
Communicator Happy Responsive
Compassionate Mana Risk-taker
Competitive Honest Self-disciplined
Concerned Imaginative Self-motivated
Confident Industrious Self-starter
Conscientious Influential Self-reliant
Consistent Innovative Sensitive
Courageous Inspiring Sincere
Creative Integrity Sociable
Credible Intelligent Stable
Curious Intuitive Successful
Daring Judgemental Supportive
Decisive Knowledgeable Tactful
Delegator Loyal Tenacious
Dependable Lucky Tolerant
Disciplined Mature Tough
Dignified Motivator Trusting
Discreet Open-minded Trustworthy
Educated Optimistic Visionary
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Sponsor’s leadership self-assessment
Leadership Qualities Excellent Very Good Good Satis-factory Barely Adequate Poor Very Poor
1. 7 6 5 4 3 2 1
2. 7 6 5 4 3 2 1
3. 7 6 5 4 3 2 1
4. 7 6 5 4 3 2 1
5. 7 6 5 4 3 2 1
6. 7 6 5 4 3 2 1
7. 7 6 5 4 3 2 1
8. 7 6 5 4 3 2 1
9. 7 6 5 4 3 2 1
10. 7 6 5 4 3 2 1
Totals
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The steering committee
The project board or steering committee is usually needed when the project spans a number of functional boundaries. The relationship between a project and a steering committee is similar to the relationship between a board of directors and a company. The purpose of the steering committee is to direct the project, not to manage it.
The membership of the committee will vary. Perhaps it should include representatives from all major stakeholder groups, particularly from the functional departments who have loaned their resources and/or will take possession of the project deliverable and achieve the project benefits.
The committee is usually chaired by the project sponsor and provides overall support, guidance and direction to the project. Individual committee members are not usually directly responsible for managing project tasks, but are responsible for providing support and guidance for those who do.
It is the project sponsor’s responsibility as chair of this group to keep members focused on the key aspects of the project where their experience can be used to best effect.
In practice the steering committee usually needs to do the following things:
ensure that the project links to and meets the organisation’s strategic goals and that the project’s deliverables meet business and stakeholders’ needs and deliver business value
decide how much authority they give the project manager and be a decision-mak-ing body on key issues that cannot be resolved by the project manager
decide on the acceptable level of project risk to be tolerated
eliminate project barriers that the project manager is running up against
provide counsel and guidance to the project manager / team
47
assist the project manager secure resources for the project
help balance conflicting priorities and resources needs among other projects and business as usual activities
provide guidance to the project manager and users of the project deliverable
foster positive communication outside of the committee regarding the project
check adherence of project activities against standards of best practice and the organisation’s core values and approved framework for project management
decide progress reporting needs (format and frequency), monitor project pro-gress and expenditure, and ensure that the interests of the organisation are best served
provide a forum for taking strategic, cross-functional decisions, removing organ-isational obstacles to project success, and for resolving issues raised
supporting any resultant change that the project will bring about
providing recommendations to the project sponsor on major issues which are beyond the authority of the steering committee.
The overall terms of reference for this committee is to set direction, provide support, and remove obstacles for project success. Steering committee members must resist the temptation to get involved in ‘doing’ – steering not rowing is the mantra. The steering committee provides oversight whereas the project manager takes day-to-day responsibility. Think governance, not management.
While there is no ideal number for a steering committee, small is preferable – say three to six members. If agreement cannot be achieved, the sponsor makes the decision.
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Mentoring
Sponsors may serve as mentors to project managers and other less experienced sponsors. Sponsors may also want to elicit mentoring advice from others. Yet, mentoring is mutual in that on occasions the project manager may mentor a sponsor.
A mentor is a confidential adviser who offers support and encourages people. Some ideas that should help with the mentoring process are:
listen to the other person
respect their opinions
give objective information
ask questions
give feedback
propose solutions
encourage discussion
say you don’t know, when you don’t know, but find out
paraphrase regularly
recount your experiences.
Some things to avoid are:
don’t give unconstructive criticism
don’t contradict their line managers
don’t make their decisions.
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1. Identify
3. Respond
2. Analyse4. Control
Risk management
There is always a risk that projects will not turn out as expected, arising often from their uniqueness. Successful completion requires that project risk be managed. Risk management is the process by which the probability of risks occurring and/or their impact on the project is reduced or eliminated to meet the organisation’s tolerance for risk.
Project sponsors are mostly concerned with business risk (project effectiveness or the business exposure inherent in undertaking the project), whereas the project manager is mostly concerned with project risks (project efficiency).Thus, project sponsors have a particular interest in external risks that are beyond the project manager’s influence and are sometimes categorised as follows:
P political risksE economic risksS social risksT technological risksL legal risksE environmental risksC competition risks
Thus, a project may be proceeding well from the project manager’s perspective, but sometimes external factors determine the business case benefits will not now be realised and the project is cancelled or should be.
The basic risk management steps are:
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Monitoring progress
As a minimum the sponsor must monitor progress against the project plan as repor-ted in typically weekly reports from the project manager, and intervene to protect the project investment as required. There is a trade-off between cost to monitor and value of resultant information.
Need to Monitor? What to Monitor? How to Monitor?
Project PriorityResource CommitmentCross-Project DependenciesRisk and UncertaintyEstimate Uncertainty and Acceptable Tolerances: Expenditure Schedule PerformancePrevious Experience: Similar Projects Project Managers Contractors SuppliersProject ComplexityEstimate UncertaintyClient ExpectationsLegislationExternal FactorsStakeholder NeedsConsequence of Failure
Project AssumptionsExternals (PESTLEC)Business Case ValidityDeliverablesVariances and Variations: Schedule Budget Performance/Quality Scope/WorkResources: People and Materials Plant and Equipment ComponentsProcesses: Progress Reporting Quality Health and Safety Cash Flow and Payments Procurement Issues Management Risk ManagementSecurity
Risk RegisterIssues RegisterAccident RegisterLessons Learned RegisterChange RegisterProgress ReportsStatus ReportsException ReportsSite VisitsVariance ReportsTrend ReportsPersonal ContactInterviewsQuestionnairesMeetingsAudits/ReviewsChecklistsBenchmarkingEarned Value Analysis
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Status reports
The sponsor needs periodic status, or progress reports from the project manager. The sponsor will also want to know about current and anticipated problems (risks), change requests, and new opportunities. The sponsor determines the reporting frequency and format.
Project Name: Project Sponsor:
Project Number: Date of Report:
Project Manager: Date Report Covers:
Project Status Description
Green All on target, no major issues or risks being realised, no deadlines missed.
Yellow Issues, risks etc have arisen but will not impact or delay project, the issues are being managed, changes to scope have been approved, etc.
Red Issues have arisen and will impact the delivery of the project
Status Commentary
Overall:
Time:
Budget:
Benefits:
Risks:
Issues:
Scope:
StakeholderCommunications:
MILESTONES
Description Planned Date
Forecast Date
Actual Date
Commentary
1.
2.
3.
52
Earned value analysis
Earned Value Analysis (EVA) is a means of measuring and reporting project performance. It combines work scope, financial and schedule performance, and is best illustrated by graph:
BCWS is the Budgeted Cost of the Work Scheduled. It is the planned value and represents the baseline plan.
BCWP is the Budgeted Cost of Work Performed. It is the earned value curve for complete work. Typically, this is a flattened ‘S’ shape curve.
ACWP is the Actual Cost of Work Performed. It is the actual cost of work completed to date.
Deviation from the baseline (planned performance).
Cost Variance (CV) = BCWP - ACWP
Scheduled Variance (SV) = BCWP - BCWS
Bad variances are negative and good variances are positive. A negative variance means the project is over budget or behind schedule.
53
Cost Performance Index (CPI) = BCWP ACWP
Schedule Performance Index (SPI) = BCWPBCWS
Critical Ratio (CR) = CPI x SPI (a single measure of performance)
An index of less than 1 means that project actual performance is less than planned performance. An index of more than 1 means that project actual performance exceeds planned performance.
EAC (Estimate At Completion) is the estimated total expenditure at the end of the project if current performance continues:
EAC = BAC CPI
Where BAC (Budget At Completion) is the total budget for the project, and CPI is the Cost Performance Index.
Estimated Actual Duration = Planned Duration SP
For a more detailed explanation of EVA please refer to “The Framework” publication pages 357 to 369.
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Behind time – over budget
$ACWP
BCWS
BCWP
Under budget – ahead of schedule
$BCWP
BCWS
ACWP
Under budget – behind schedule
$BCWP
BCWS
ACWP
Time Time Time
Over budget – behind schedule
ACWP BCWS
BCWP
Over budget – ahead of time
$ACWP
BCWS
BCWP
Under budget – ahead of time
$
Time Time Time
BCWP
BCWS
ACWP
Earned value analysis
55
Start
Is request appropriate?
Will change impact project parameters?
PM receives change request
PM records request in change log
PM reviews change request
I s c h a n g e a p p r o v e d ?PM updates change log
PM advises decisions
Appropriate project team member(s) assesses work needed to make change
PM updates project plan
Sponsor reviews request
Finish
Process - shows what happensProcedures - details how it’s doneProforma - includes change request and change log
Yes
Yes
Yes
No
No
No
Change control
Usually the project parameters contain some reasonable amount of tolerance to enable the project manager to accommodate smaller changes. However, should the proposed changes required some adjustment to the project parameters as established in the project charter, the proposed changes need to escalate to the project sponsor for consideration. An updated charter may be required.
56
Time Cost
Risk
Scope
Quality
Benefits
Trade-off analysis exercise
In this exercise, the client has asked that the project be accelerated and completed sooner than originally negotiated, which necessitates a trade-off analysis and business case review.
TaskID
Immediate Predecessor
Normal All Crashed Extra
Weeks $K Weeks
$K Cost/Week
A Nil 3 5.0 2 10.0 5.0
B Nil 6 14.0 4 26.0 6.0
C Nil 2 2.5 1 5.0 2.5
D A 5 10.0 3 18.0 4.0
E C 2 8.0 2 8.0 N/A
F A 7 11.5 5 17.5 3.0
G B, D, E 4 10.0 2 24.0 7.0
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Recognise troubled project
Access vital signsSend assessment to steering committee Prepare cancellationplan
Announce cancellation
Frequently reassess Continue project
Develop recovery plan
Re-assign people
Document lessons
End
Are vital signs within limits? Kill project?
Is the project approved? Does project have strategic fit? Are resources available? Is it the right sponsor? Does the client have buy-in?
Start
behind scheduleover budgetinadequate deliverablesbenefits threatened
business goalscore values
technologyexpertisematerials
Continued …
legal inputHR inputstakeholders
functional headssponsor
Prepare cancellationplan
*
*
Yes Yes Yes Yes Yes
Yes
YesNo
No
No No No No
Vital Signs might include schedule, milestones, deliverables, resources, risk, and cost performance.
Continued …
No
Project termination process
58
To terminate or not?
Project termination is not a decision to be taken lightly. There is a need to differentiate between a truly troubled project and routine variances that occur on any project. Sometimes variances (the difference between planned and actual project performance) may suggest a difficult project but not necessarily a troubled project.
An APM article (www.projectsatwork.com) published this April defines a troubled project as one that is:
30% or more over estimated budget.
30% or more over estimated target completion date.
Repeated failure to complete deliverables.
Repeated failure to meet required quality standards.
Of course these percentages need to be defined in the context of industry norms, the organisation’s tolerance for risk, the accuracy of the estimates, and the type of project, where for example a pioneering endeavour harbours more uncertainty than our more routine projects.
Some subjective measures for identifying troubled projects are:
The integrity and value of deliverables, as perceived by the client, are questionable. The client fails to see the benefits or value of the deliverables.
There is a lack of knowledgement of risks associated with the project, and there are no plans for managing project risks. Perhaps the project is driven by a deadline and therefore there is no room for risks.
There is an inherent mismatch in terms of goals, constraints and promises associated with the project. The project objectives are unrealistic – sometimes understated by the sponsor to secure approval.
There is a lack of alignment and consistency in procurement strategy in relation to the overall project constraints. For example, the project is defined as “fixed price” while contractors are working on a “time and materials” or “pay as you go” basis.
Human factors for troubled projects can be very influential and include fragile stakeholders and team relationships, dissatisfied clients, dysfunctional communications, lack of purpose, non-existent or poor documentation, language of despair, and talk of legal action among involved parties. These can be warning signs for troubled projects.
Some key factors that could lead a project into a troubled state are:
Failure to recognise symptoms of trouble.
Unrealistic objectives and contraints.
Project scope not well defined.
No sponsorship or management commitment.
Lack of rationale and acceptance criteria for requirements.
Lack of a business case, project charter or project plan.
Lack of awareness, assessment and planning for project risks.
Poor communication both within and outside the project team.
No regular updating of the project business case.
People not trained and ready for the changes that the project will bring.
An understanding of the issues surrounding project failures provides insight into what needs to be done to achieve a successful recovery. To help determine if there is potential for recovery, the following questions may help:
What is the stategic importance and purpose of the project?
What would be the consequences of cancelling the project?
Why should we save the project?
Can it be saved?
How realistic where the original estimates of time and cost?
How critical is the project deadline?
What is the complexity of the project in terms of interfaces, suppliers, contractors, consultants and geographic spread?
What technology is involved? Is it proven, new, tested, untested?
What is the level of readiness for risk in terms of awareness and planning?
What is the degree of overall confidence in terms of getting the job done?
The project recovery manager would review project documentation and discuss such questions with the client and other stakeholders – openly, honestly and quickly – in order to validate the potential for recovery. After fact-finding, a recovery charter may then be prepared that authorises the project recovery manager to develop and implement a recovery plan. The recovery manager typically works with the project manager and project team to implement the recovery plan, monitor and control progress and until the project has stablised.
Project charter template
Item Description
Project Name Select a relevant, unique and concise title by which the project will be referred.
Background Explain the situation, circumstance, opportunity, or problem that has lead to the need for the project.
Purpose/Benefits Explain the rationale for the project – what it is designed to accomplish, what benefits (positive outcomes) will be achieved. Why do the project?
Vision A ‘picture’ of the new future circumstance or situation that will result from undertaking the project and producing the deliverables.
Goal Express the project output as a single goal.
Final Deliverable(s) Describe the features, functions, user-requirements and performance standards (outline specification) required of the final deliverable(s).
Success or Acceptance Criteria Identify measurable criteria the achievement of which will result in project success from the client’s perspective.
Scope Prepare a statement of work perhaps in narrative form, which describes the main work that must be undertaken to realise the project goal. Also list the exclusions – work outside scope on this occasion that might otherwise be reasonably assumed to be part of the project.
Related Projects Identify any other proposed or approved projects that might be related to or impact the project where coordination might be required.
Business Alignment Identify which current business goals the project will contribute towards achieving. Show linkage with the organisation’s business plan.
Item Description
Business Case
(Cost Benefit Analysis)
Complete an objective analysis of the proposed project to demonstrate that it will add value. This analysis may address such considerations as:
economic acceptability
technical feasibility
social acceptability
environmental acceptability.
The analysis might consider direct and indirect, short-term and long-term, and tangible and intangible costs and benefits (quantified wherever practicable) and their probabilities as appropriate.
While all investment needs to be justified, some organisations don’t require a formal business case unless the project exceeds a certain threshold cost – perhaps $60,000 for example.
Client, Customer(s) and Sponsor Identify specifically who will own the final deliverable, who will use it, and who will fund the project.
Project Manager Identify who is to manage the project, their main responsibilities, limits on their authority, and possibly provide a brief profile of their project experience and expertise.
Other Stakeholders List other individuals or groups who could significantly affect project success and have a stake in the project and its outcome.
Roles and Responsibilities Briefly describe roles and responsibilities for key stakeholders - client, steering committee, and sponsor. Could refer to organisation’s SOPs.
Communications Describe the frequency, format and medium for progress reporting from the project manager to project sponsor and other key stakeholders.
Assumptions Document key premises on which the project is based.
Item Description
Risk Analysis Identify larger impact risks to project success and suggest broad mitigation measures.
Timeframe Identify when the project is to be undertaken, any key interim milestones, and an estimated (or mandated) completion date.
Plan Preparation Estimate the work-effort, duration, completion date, and resource costs for the preparation of a detailed plan for project implementation.
Total Cost Estimate the total order-of-magnitude cost of the entire project and show the level of accuracy (+/- percentage or range) of this estimate.
Other Matters Include under this heading any other relevant matters, not separately identified above.
Not all above items will be applicable and in addition our completed charter might include a cover page, contents page, executive summary, with detail included in appendices as appropriate. A foreword might be included - an expression of support written by the CEO perhaps, emphasising the importance of the project, endorsing the suitability of the project manager, and encouraging stakeholder support.
Project plan template
Item Description
Title Page Should mention what the document is (‘Project Plan for…’), who prepared it, who it is for, and date. Might also include confidentiality markings and the organisation’s logo.
Version Number and Date A page to keep track of document versions and amendments by date.
Contents A page that lists the document headings and page numbers, including appendices.
Execute Summary About one page that concisely describes project purpose, goal, parameters, key appointments, and main risks. Don’t sacrifice clarity for brevity.
Project Purpose An explanation as to why the project is to be undertaken, what problem it will solve or avoid, and what benefits (positive outcomes) will be realised.
Project Goal A brief statement about what is to be delivered.
Planning Assumptions A shortlist of key planning premises.
Scope A Work Breakdown Structure (WBS) in family tree or indented format. A high-level description in the plan, with a detailed coded list as an appendix perhaps. And scope exclusions also need to be documented.
External Dependencies An explanation of interdependencies, internal and external, with other projects and operational activities.
Deliverables Description of project final deliverable(s) perhaps with detailed specifications attached as an appendix.
Project Constraints List any restrictions that may influence the way in which the project is to be undertaken.
Item Description
Key Stakeholders and Appointments Names of client(s), sponsor, project manager, customer(s)/user(s), and other key stakeholders.
Organisation, Roles and Responsibilities
A project organisation chart and Responsibilities Assignment Matrix (RAM) might be included here, with job descriptions perhaps included as appendices. Alternatively, reference might be made to the organisation’s SOPs.
Benefits Realisation This sub-plan might specify intended benefits, strategies for their achievement, tracking, responsibilities, timeframes, and measures.
Network Diagram A high-level graphic depiction of work element relationships and sequence, which might be prepared using appropriate software.
Schedule Might include a milestone schedule. Would include a table schedule, and/or Gantt chart to show by calendar dates when project work is to be undertaken.
Work Packages Might be included as an appendix or appendices, briefly describing each work package – scope, time, budget, quality and risks.
Procurement A plan or sub-plan that identifies resource needs, quantities, dates, places and suppliers as a basis for arranging supply contracts.
Monitoring, Control and Variations List measures to monitor and control project progress – meetings, reports, visits, reviews, surveys, sampling and testing. Also, a process for managing changes. Could be covered by SOPs (PM Framework).
Quality Management Measures to ensure that the final deliverable(s) is produced as per specifications, as determined by the client.
Budget A comprehensive breakdown of the project costs, showing labour and non-labour components.
Item Description
Cash Flow Forecast A table showing the estimated flow of money in and out of the project, usually on a monthly timetable.
Risk and Issues A risk management plan (or sub-plan) that describes how project risks and issues will be managed. Minimum requirements will be a Risk Log and an Issues Log (or Registers).
Stakeholder Communication Description of communication needs and expectations. Detail what media, formats and frequencies will apply. Usually published as a table.
Public Relations Minimum is to identify a contact person.
User Training What arrangements, if any, we need for training users in the operation of deliverables.
Project Closure List key activities to be undertaken to ensure that the project is properly closed down. Client/sponsor sign-off essential. An SOP might apply.
Document Control Describe the project filing system.
The project plan may not conform precisely with this template. It is offered as a checklist. Some items might be irrelevant or overlap. Some items will be SOP. Once completed, the plan needs to be presented to the sponsor for approval.
Glossary ActivityAn element or unit of project work.
Balanced MatrixOrganisational matrix where functions and projects have same priority.
Bar ChartA scheduling tool (also called a Gantt chart) where project and tasks are shown as horizontal timelines denoting their durations, and start and finish dates.
BaselineA plan, fixed at a specific point in time, used as a basis for tracking project progress.
BudgetPlanned cost for a project, activity or task.
Business CaseStudy used to justify the commitment of resources to a project.
ChampionPerson who takes a personal responsibility for the successful completion of a project.
Change OrderWritten order directing changes to the provisions of the project/contract.
ClientPerson or organisation for whom the project is undertaken.
ConstraintsRestrictions within which the project is managed.
ContingencyProvision for risk events.
ContractLegally binding agreement.
ControlProcess of comparing actual and planned performance, analysing the differences, and taking corrective action.
Cost VarianceDifference between budgeted and actual cost of work performed.
Cost-Benefit AnalysisAn evaluation of a proposed project or course of action.
Critical PathLongest path through the project network diagram. Shortest project completion time. A project may have more than one critical path.
Critical TaskA task on the critical path. Such tasks have no float time.
DeliverableProducts, services, processes or plans created as a result of a project, or task. The result or outcome of project work. There are final deliverables and interim deliverables.
DependencyThe relationship of one task to another.
DurationLength of time to complete a project, or task.
Earned ValueValue of project work actually performed.
EffortNumber of labour units needed to complete work, often expressed in staff hours, staff days, or staff weeks. Also referred to as ‘work effort’.
Elapsed TimeNumber of calendar days during when a project, activity or task is undertaken.
EstimatePrediction of a quantitative result usually applied to project costs, work effort, durations, and resources.
EventCompletion or beginning of a project or task. Has zero duration.
Gantt ChartA horizontal bar graph. Activity and task durations are shown by horizontal time lines.
GoalSomething one wishes to accomplish. Broader and less time-bound that an objective.
GradePerformance level of product or service features.
HistogramGraphic display of resource usage over time.
InterfaceBoundaries and relationships among people, functions, departments and organisations.
MethodologyDocumented process for managing projects.
MilestoneAn important intermediate event in the life of a project.
PlanIntended future course of action.
PortfolioGroup of projects that are managed collectively.
ProcessSet of actions needed to produce a deliverable.
ProductOutput or deliverable from a process.
ProgrammeBroad effort encompassing related projects.
ProjectA temporary endeavour undertaken to produce a unique outcome or result.
Project Life CycleSequential phases through which projects proceed. Each phase may consist of several steps.
Project ManagementUse of leadership, planning, scheduling and control techniques to achieve the project goal.
Project ManagerPerson responsible for managing the project.
Project OrganisationOrderly structuring of project participants.Project PlanDocument describing how the project goal is to be achieved.
Project ScopeDescription of work needed to produce the project’s deliverables.
Project TeamCooperative group of people of various disciplines who are responsible for executing the project.
QualityFeatures and characteristics of a deliverable that bear on its ability to satisfy stated needs. Conformance with specifications.
ResourcesItems required to complete the project.
Resource-DrivenA project in which resource availability determines the schedule.
Resource ScheduleTimetable showing when project resources are required.
RiskA potential problem. Chances of an undesirable outcome.
Risk ManagementOrganised control of risks.
ScheduleTimetable for completion of project tasks.
Schedule VarianceDifference between planned and actual completion of project tasks.
ScopeWork required to complete a project.
Scope ChangeChange to the project scope.
SpecificationDocumentation prescribing performance standards.
SponsorProject funder.
StakeholderOne who has a stake or interest in the outcome of the project.
Status ReportA report stating the condition of the project or task at a certain time.
Steering CommitteeFormal group, representing the owner or client, who provide direction to the project manager. Usually includes the project sponsor.
TaskUnit of project work.
TeamTwo or more people working inter-dependently towards a common goal.
Team BuildingInfluencing a group of individuals to work together effectively towards a common goal.
Team MembersIndividuals, who report either part-time or full-time to the project manager, who are responsible for some aspect of the project work.
TolerancePermitted cost and time variance.
Trade-OffAllowing one aspect to change, usually for the worst, in return for another aspect of a project getting better.
VarianceDifference between actual and planned performance, in terms of schedule or cost.
VariationChange to a contract, specification, or project scope.
Work Effort to complete a project or task.
WorkaroundAn alternative solution to a problem
Work Breakdown Structure (WBS)Work needed to complete a project, arranged in a hierarchical structure of successively smaller elements of work.
Work PackageA generic term for the lowest level of work breakdown for contracting/delegating purposes.
PublicationsProject sponsorship has an important role to play in successful project management. However, there is as yet very little written on project sponsorship. Most books on project management mention sponsorship, but to date I’ve only located two useful books on the subject:
1. Randle Englund and Alfonso Burcero, Project Sponsorship, Jossey-Bass
2. Paul Dinsmore and Terrance Cook-Davies, The Right Projects Done Right, Jossey-Bass
3. Nick Graham, PRINCE2 for Dummies, John Wiley & Sons ltd