page 1 project management and organization success:

Project Management and Organization Success:

An executive briefing to Princeton management

Michael KnappJuly, 2002

this Presentation is intended to:

Look at the ‘state of play’ & directions in project & program management

Look at the value to Princeton of modern program and project management

Discuss the roles and responsibilities of senior management in managing successful programs & projects

1. Project Management: its current status

2. Why Projects Fail

3. What’s the ROI?

4. Project Management: the new perspective

Topics

Directions in Project & Program

Management

Section A

Project Management – a practical definition

Project Management covers those set of

practices designed to:

1. Deliver specific objectives

2. Realize clear & measurable benefits

3. Within a discrete time frame

4. Manage a budget & resources

Most importantly, projects deliver change and

increase value to the organisation, its members

and constituency.

Section A: Directions in modern project management

A clash of cultures?

One reason why Universities often struggle

with projects and project management is:

“If a little change is OK, no change is better.”

In other words, being efficient at managing

change is not necessarily a high priority for a

lot of Universities.


What is Project Success?

Objectives

Time Cost

The 'Golden Triangle' of Project Success

Project success occurs when we have:

Note that project success is more than just finishing the project

A delighted client (expectations met) Delivered the agreed objectives Realised the expected benefits Met time and budget expectations


Where project management currently sits

Conclusions:

1. Project management is seen as being critically important to organization success.

2. The relevance of project management is increasing.BUT3. Organizations are not prepared to leverage its real value.

* PA Consulting report: 1997 - 2002


Where is Project Management heading?

0% 10% 20% 30% 40% 50% 60% 70%

PM is a core competency

PM is critical to companysuccess

PM delivers results in ourorganization

People understand howPM works

We have the right projectskills

2002

1997

How projects actually perform


Claimed in the Business Case

TimeQ1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Yr 1 Yr 2

$NPV

+$

-$

Break-even

Claimed in the Business Case

TimeQ1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Yr 1 Yr 2

$NPV

+$

-$

Break-even

What was realised!What was realised!

Some projects ending up losing money!

Service / satisfaction levels are poorTime

Client / user Satisfaction Level

Very happy

OK

NOT happy

Implementation

Too many projects fail!

Cumulative Cost: Budget vs Actual

0

20

40

60

80

100

120

140

160

180

1 2 3 4 5 6 7 8 9 10 11 12

Elapsed Months

$'00

0 Budget

Actual

Cost Cost blowblow--outout

Time Time overover--runrun

Cumulative Cost: Budget vs Actual

0

20

40

60

80

100

120

140

160

180

1 2 3 4 5 6 7 8 9 10 11 12

Elapsed Months

$'00

0 Budget

Actual

Cost Cost blowblow--outout

Time Time overover--runrun

We do not reduce head-count!

Before implementation AFTER implementation

Principal causes of project failure


1. Senior management show less than optimal commitment

2. Accountabilities are not met

3. Poor alignment with Strategies & Priorities

4. Benefits not defined or not realizable

5. Estimates are wrong. Full life cycle costs were never understood

6. Scope is not set or controlled

7. Insufficient / inappropriate resources

8. The wrong strategy. Time frames too ambitious or too long

9. Inappropriate technology

IT has been the traditional focus of projects & project

management within a HE organisation

Projects have too often focused on delivering benefits at the operational level

Academic Unit 1

CEO

Administration

HR StudentFinance

Academic Unit n ITExternal Affairs

Business Units Service Units

Strategic

Operational

Traditional Focus of Projects

IT


A new focus on ROI

StrategicBenefits

Positioning the institution Technology enabling change Strategic alliances and Joint Ventures Better financial & administrative performance Improving services to our various stakeholders

Business & Academic Unit /

TacticalBenefits

OperationalBenefits

Why invest in projects? It’s more than just better technology & saving fte!


Increased research opportunities Improved communication & collaboration Improved services to the student New opportunities in Teaching & Learning New business opportunities Raising the academic profile ‘Ubiquitous connectivity’ enhances academic independence

Improved business process efficiency Greater process automation Eliminating waste, duplication & re-work Improving services to users & end-users Re-allocating resources to more productive tasks

Types of Projects

Business / Organisation change• Re-structuring the organisation• Implementing new methodologies• New business & academic initiatives

Technology• Infrastructure• Systems Integration• Communications• T&L technologies• Web-based services

Process improvement• Business Process Re-engineering• Management Improvement

Academic Projects

• New / updated Learning Programs• Implementing Learning Technologies• Research Projects• Academic ventures

Marketing & Promotion• Marketing & promotion campaigns

• Market & industry research

Business Venture

There are more than just IT projects

• Joint ventures• In-sourcing• Business Development


Projects are, firstly, Business Projects

‘End-to-end’ Project

IT Project*

Business Process

Re-engineeringProject*

Implementation Project*

* - examples only

The ‘End-to-end project’ is designed to deliver business benefits

The project is made up of component projects which are aligned with broad areas of responsibility

Overall accountability resides at a single point

The Project Sponsor is whoever will receive the greatest benefits

Most organizational projects are business projects with a significant technology component.


1. Supportive & knowledgeable management

2. Good Project Management Practices

3. Good Project Methods

4. Skilled Project Managers

They have achieved appropriate competency Know what they’re doing & keep focused Recognised as professionals

Commit to their accountabilities Appropriate resourcing & funding Issues resolution - decision making Know & understand ‘Project Dynamics’

Stakeholder management Risk management Quality Management Planning (especially estimating & scheduling) Scope creep kept under control

Best Practice ‘know-how’

What Delivers Success


Organization Maturity

Individuals’ Competencies

Effective Projects

The combination of the ‘culture’ and practices of the organization along with the sum competencies of the individuals in a project governance position (not just the project manager) deliver effective projects.

Delivering more successful projects requires a happy marriage of the right organization maturity and the right level of individuals’ competencies.

How we deliver more effective projects


seat of the pants

Projects just ‘happen’ Poor project initiation Inadequate buy-in Poor communication Inter-dependencies not

managed Insufficient planning Unknown benefits Poor standards (if any)

Success rate less than 40%

aware

competent

best practice

Projects formally initiated Plans endorsed Varying standards with few

disciplines Methodologies introduced Stakeholders managed Projects become business-

driven


Methodology & standards well established & supported

Stakeholders understand & accept accountabilities

Discrete measures support good management

End-to-end projects set up & managed as such

Risks clearly defined & controlled

Project Management accepted as profession


Improvement programs formal

Good measurement enables optimization

High risk projects successfully managed

Respect & support of projects

Success rate better than 75%

This model is meant to give a very quick ‘snap-shot’ of an organization’s maturity in regards to its ability to effectively manage projects. The model relies on a fairly subjective assessment of a number of indicators which point to the overall maturity of the organization.


Organisation maturity in managing projects

Gen

eric

Man

agem

ent

Socio-cultural

Specialist Project Management

• Empathy• Cultural awareness• Respect and equity• Awareness of the

environment• Social fairness

• Financial management• Resource management• HR management• Business Planning• Operational management

• Scope management• Stakeholder management• Risk management• Communication management

• Time management• Quality management• Vendor & contract management• Specialist resource & HR management

All those in a Project Governance position are both aware of the responsibilities of their position, and confident they have the necessary competencies to meet those responsibilities.


Competency-based management

Project Dynamics

Scope & Size

Resources

Risk

Technology

Time Constraints

ManagementPractice

Quality

Budget

Project Impact

Project Dynamics describe the way various factors inter-relate in influencing project outcomes.

Predicting project outcomes is complex and is often counter-intuitive


Dynamics and Paradoxes

1. Projects do not perform as if they have a brake and accelerator.

2. Adding resources to a project can slow it down.

3. Taking resources away from a project can speed it up.

4. The more we measure where change comes from, the less change we will measure.

5. Putting a project ‘on hold’ is like being told to ‘breathe less’.

6. Good practice is ‘scaleable down’ but bad practice is not ‘scaleable up’.

7. Projects which include contingency take a shorter time than projects without contingency.

8. High risk projects are often more beneficial than no-risk projects.


Project Life Cycle

Start the Project

Execute the Project

Complete the Project

In its simplest representation, a project has 3 phases it passes through:

1. It has a start2. It has a middle (where a lot of work is done!)3. It has a finish

The application of the project life cycle to a particular project is called the Project Methodology


x = Actual cost / time

1.5x

0.5 x

0.8 x

1.3x

1.2x

Ove

r-e

stim

atin

gU

nd

er-e

stim

atin

g

0.25 x

0.7 x

Project Definitio

n or Business

Case

NOT > +/- 50%

NOT > +/- 30%

Project Initiation

A key objective for all project managers and senior management is to increase the accuracy of estimates as early as possible in the project cycle

All estimates should reflect a level of confidence

Start the Project

Execute the Project



Estimating Accuracy across the Project Life Cycle

“If the old middle managers are dinosaurs, a new class of managerial mammal is evolving to fill the niche they once ruled: project managers”

Project Management – a new perspective


The profile of Project Management is being elevated within organizations as it is increasingly seen as fundamental to organization success

Emergence of Strategic Project Management

Emergence of the Project-based Organisation

Seen as delivering a partnership between administration, business, academic groups, technology & vendors

It’s being seen as a profession, with defined career paths and competency-based accreditation

The ‘dark science’ aspects are being replaced with practices based on performance & measurement

Project Management – 2 fundamental questions


There are 2 fundamental questions which need to be answered regarding organizational projects:

1. Are we running the right projects, with the right priorities for the right investment (people & $’s)?

and

2. As an organization, do we have the maturity and competency to run successful projects?

The answers lie in understanding the new model

1. Strategic benefits were not targeted

2. Projects run in a stand-alone manner

3. Solutions were seen as technology solutions

4. The business case not fully understood

5. Management practice immature

6. Senior management were not involved enough

‘Old’ Model

Projects deliver the Strategic, Academic & Business Plans

Projects grouped under Programs

All projects are, firstly, business projects

The ROI is well understood AND realizable

Project Management is competent

Senior management involved and committed

‘New’ Model


1. Strategic Project Management

2. Portfolio & Program Management

3. Business-driven project management

4. The value for Princeton

Topics

The value of program & project management

Section B

Program A

Project A1 Project An

Program X

Project X1 Project Xn

Portfolio of Programs and Projects

The Project Portfolio

1. The current approach is to group projects into programs, and define all of these in the organization's Project Portfolio

2. The aggregation of the projects into programs is known as the Project Portfolio

3. One way to view the Project Portfolio: it’s how we will deliver the Strategic Plan and component Academic, Research and Business Unit Plans

Section B: The value of program & project management

Strategic Project Management

Strategic Project Management is a set of processes which ties the Project Portfolio directly to the Strategic and Business Plans:

Strategic & Business Planning

Build the Project

Portfolio

Run the Programs &

Projects

Monitor, Evaluate, Improve

1. The Portfolio is the prioritized list of Programs and Projects

2. The Portfolio is built each year BUT the cycle is repeated each quarter

3. The continual evaluation of project performance and success against the Business Plans ensures goals & targets are being met

4. The process supports the rigorous monitoring of claimed benefits and ROI as the projects are being run – NOT after projects have finished


Strategic Plan

Academic Strategic Plan

Strategic Goal 1

Goal 2

Research Strategic Plan

Goal 3 Goal n

Programs relate to the Strategic Plans

IT Strategic Plan

Administration Strategic Plan

Program A Program B Program B Program N

Owner

X

X

X

X

X

X

X

Owner

Owner

Owner

X

Programs relate Business Plans to the

Strategic Plan

X


Portfolio

Program A Academic Units

HR

Project 1

Project 2

IT

Project 3

Finance

Benefits /Commitments












Programs & projects are functional in nature


Projects are grouped into Programs

Some reasons why structuring projects into programs makes

sense.

Projects relate to same / similar business objectives.

They may share scope.

They often impact the same part of the business in the same time-frame.

They probably share resources.

They may well be dependent of the same technology.

Project A Project B

Project C

Program X


The value of program & project management

1. By relating programs to business & academic plans, their realization is controlled and more assured.

2. There is greater coordination across all the initiatives and projects running across the organization.

(‘the right hand DOES know what the left hand is doing’)

3. There is more effective use of scarce and valuable resources.

4. Greater coordination leads to less waste, shorter time frames and lower costs.

5. Decision-making becomes clearer and more effective.

6. Your people achieve greater satisfaction and less frustration.

7. Project success is enhanced and benefits realized.


1. Key management roles

2. Principal accountabilities

3. Accountabilities across the Life Cycle:

• Project Start-up• Project Execution• Project Completion

TopicsSection C

The roles and responsibilities of

senior management in project success

Key Management Roles

Section C: The roles & responsibilities of senior management in project success

The main Senior Management roles in Program & Project Management are:

Program Sponsor

Project Sponsor

Steering Committee Member

Take ownership for the delivery of strategic goals Chairs the Program Board.

Has overall accountability for ensuring the benefits of the Program are delivered

‘Owns’ the project. Funds the project. Chairs the SC. Sets direction and maintains the vision.

All projects need to be owned. Whoever has most to gain (& lose) is often the sponsor.

SC members are ‘key stakeholders’ and assist the Sponsor in decision-making and endorsing management deliverables.

Key stakeholders are those who, by definition, will cause project failure if they withdraw support.

Role Description Comments

In influencing project success and benefits

realization, there is probably no more important

role than that of the Sponsor

How important is the Project Sponsor?

It is the Sponsor who sets the vision, defines the

goals and objectives, approves and owns the

scope and makes all the ‘big calls’.


Principal Accountabilities of the Sponsor


1. Commit adequate funding against a business case.

2. Ensure project accountabilities defined and agreed. Buy-in has occurred.

3. Ensure appropriate Project Governance is set up.

4. Priorities delivery options.

5. Ensure the right business / academic resources are allocated.

6. Approve Scope and changes to Scope.

7. Approve all project plans and budgets.

8. Ensure critical issues and conflicts are effectively resolved.

9. Ensure good management is carried out. Drive this practice ‘top-down’.

10. Make sure that projects are tracked using ‘hard data’ - the Performance Indicators.

11. Initiate Project Reviews to identify any major issues & improvements.

1. Make sure that scope is clearly and unambiguously defined.

2. Ensure accountabilities (R&R) are defined and agreed.

3. Agree to Project Governance (including make-up of the Steering Committee).

4. Define the Business Case: a valid & realizable ROI.

5. Make sure the business has the capability and resources to run the project successfully – especially key personnel are available.

5. Ensure the Project Plan (esp. cost and time estimates) are valid.

6. Review the Risk Plan and contingencies.

Accountabilities of the Sponsor at Project Start-up


Start the Project

Execute the Project


Governance Models


Project Governance Program Governance

Program Board

Program Sponsor

ProgramManager

Enterprise-wide Oversight Committee

Executive Sponsor

ProjectManager 2

ProjectManager 1

ProjectManager 3

Reference Group

Steering Committee

Sponsor

ProjectManager

Enterprise-wide Oversight Committee

Executive Sponsor

ProjectTeam

ProjectTeam

ProjectTeam

Reference Group

Accountabilities of the Sponsor during Project Execution


1. Attend Steering Committee meetings!

2. Have a 1-on-1 with the Project Manager to review status and resolve issues.

3. Ensure changes to scope are kept to a minimum and are ALWAYS agreed to.

4. Ensure that resourcing commitments are being met.

5. Ensure budget, time frames and objectives will all be met; if not, then ensure corrective action is taken.

6. Monitor the claimed benefits to ensure they remain valid.

Start the Project

Execute the Project


Accountabilities of the Sponsor at Project Completion


At the end of the project:

1. Ensure Benefits Realization is carried out.

2. Sponsor a ‘Post Implementation Review’.

3. Oversee the hand-over from the project to the business / academic units.

3. Ensure improvements are made to management practice.

4. Share your experiences & knowledge with peers.

Start the Project

Execute the Project


at the end of the day...Managing successful projects is an

issue for the whole of Princeton.

The ability for continued growth,

meeting aggressive time frames and

achieving academic, research &

business objectives will all be boosted

by the application of good project

management practice.

Princeton has the opportunity to further

its reputation as being a truly excellent

organization.