project management dynamics

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BA

03-23-05December 2012

Project management : BSC & dynamic organisations

Presented by Jan Biets

[email protected] +32(0)477 32 90 11 Mechelen - Belgium

page 1 • BSC & Dynamics

mailto:[email protected]

Project management Dynamics December 2012

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Project management dynamics

An approach, together with BSC (balanced scorecards), metrics, and (graphical) reporting, to improve the outcome and quality of your strategic projects/programs.


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Project, a dynamic organisation

Projects do have a balance, with several dynamic factors interfering on each other;• Cause and effects;• Enforcing factors

• On a positive manner • On a negative manner

• Are managed by stakeholders: (according applicability:) project organisation, owner, Customer, management

• Focus on ultimate target / purpose of the organisation• In this case: ‘margin%’ [ %]

• Identify all factors having impact on :” margin % “:• Learning, people, growth• Internal business processes• External / Customer• financial

• Balanced scorecards (Kaplan)• System Dynamics (Senge)


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margin % new Customer (revenues)

cost overrun

satisfaction policy/SLA

cost prediction (sales) efficiency PM method policy

KISS innovation processes roles&responsabilities

improve performance (staff) template project managementproduct mgt

training staff PM skills innovationengineers

employee satisfaction EVA


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QA

training staff

innovationPM

skillsEVAEmployee

satisfaction

cost prediction

KISS

efficiency

innovation

policyPM

methodology

roles & responsibility

product management

re-use / templat

e

processes

performance (improvement)

project management

satisfaction policy / SLA

cost overrun

margin % new customer(revenues)

FIN

AN

CIA

Lpers

pect

ive

CU

STO

MER

’spers

pect

ive

Inte

rnal

busi

ness

&pro

cess

pers

pect

ive

People

,learn

ing,

gro

wth

pers

pect

ive

tools+

Think-tank+


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Project BSC , KPI & KGI’s


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Project KPI, KGI

Measurement is knowledge…

Identify all factors having impact on the – pre set – result / goals

•Project related metrics •Organisation related metrics•Performance related metrics•Finance related metrics•Quality related metrics


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internal business process "what , why , when , who , how"actual project

cost prediction define workmethod based on experiences and best practices

measure after each project the variances between budget compositions % red

lack of profit, due to low pre-cost calculations learn , adapt next pre-calculation % green

lack of project management improve output % yellow

lack of design phase gate process (applied) design phase is not finished lessons learnedno proper process

excellence delivery installation

keep on changing the layout (even without feedback of customer)

use of template, or set of instructions/processset baseline of budgetrespect the authority of functional leads within Companyreview cycle's of pre-cost calculationsleasson's learnedre-calculate after finishing project na

identify overrun items, and reason's behind

cost follow up during projectcorrect information , correct expectation mgt

policy define project execution policyclear definition what, how , who will execute the project

measure the number of non-conformities after audit % red

publish policydescription of project execution (project charter) % green

maintain policy % yelloworganise internal auditreview policy

processes define PM execution processesmeasure the number of non-conformities after audit % red

publish processes % greenmaintain processes % yelloworganise internal auditreview processe

PM method implement PM methodmeasure the number of non-conformities after audit % red

publish PM method % greentrain PM % yelloworganise internal auditreview PM method

template identify templates (based on process desciption)measure the number of non-conformities after audit % red

publish templates % greentrain the use of templates % yelloworganise internal auditreview & life cycle templates

efficiencybased on selected tools, improve efficiency of Company's output (project delivery) decrease overrun of budget

training of staffdecrease overrun of timed schedule

selecting templates, methods, processes,… decrease rework

effectively apply set of measures & objectivesdecrease number of late (closed) issues

guard the application of abovedecrease number of risks (points) in time

margin (customer's satisfaction) will be know in advance (predictability)

decrease number of non-conformities (audit results)

do things right, the first timecustomer satisfaction (tbd)

effic

ient

ly p

rod

uce

& d

eliv

er

proj

ect


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KISS apply KISS principleconsider re-use of existing equipment/work

publish KISS principle alwaysKISS is not opposite of innovation

quality process review of engineering work&solutionstimely discovering of mal-functioning engineering

peer to peercreate & establish state of the art solutions

guru approacheases/enable re-use of solutions

avoid rework (in late project phase)

avoid rework (in late project phase)

due to time constraint, ME-drawings are sent to supplier, without proper quality review

phase gate approachestablish baselines (enable scope change mgt) [€]

metrics

project management manage planningSPI , baseline , collecting spent hours, …predictability of project deliverables % on time

manage resourcesassign the right skills, at the right moment

manage scopescope management, introduce scope change management

manage qualitydefine work, outcome and results (scope, urs, testing)

manage riskrisks value should decrease (in time)

manage issues

number of issues should decrease, not too late open (not solved)

manage expectationsdefine clear (customer) expectations, quantify & qualify

manage budgetbudget management, overrun, re-work, scope change mgt,…

manage EV milestones met on timemilestones met EV

product mgt output / productivity) kg/hr(part of URS) innovation

PIRevolutive mgt

requirement performance

outputsolution should 100% satisfy the requirements

switch from one recept to another (within expected/set time)

scope managementnumber of scope changes per phase

user-friendlynumber of scope changes per project

resources planning resources planning accuracy


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learning , staff , growth training staff & engineers

(project related only) define roles & responsabilities improve efficiency

% project results (based on malfunctioning / underachieving resource)

define clear function description improve performance% turnover of employees (specific project , reasons)

define assessment tool improve loyaltydefine HR policy decrease turnover employeesidentify gaps (employee skills vs job description) improve compentenciesdefine training plan (per employee) na

execute trainng plan na

evaluate employee's performances (skills based) na

PM skills select & assign PM improve efficiencytechnology leadership training improve performanceproduct & solution focus see 'training staff & engineers) decrease project risk

PM select PM methodology improve outcome & quality of projectlower risk of margin decrease

PM certified (Prince2, or other methodology)within 1 year, all PM are certified not certified

training staff&engineers

engineering degrees education & training courses (potentially, degrees,or certificates)

innovationempower employees to innovatemotivate to innovatecreate incentive to enable innovation (initiatives)

EVAsustainable success is virtuous cycle: financial success allows Company to invest in its future (growth)

inno

vate

, im

prov

e an

d le

arn


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customer's perspective

satisfactionproduct/service/installation is according URS. Both tangible as in-tangible number of matching URSuser friendly number of non-qualifications (after testing) / FAToutput is according contract (kg/hr)operationabilityversatibility

added value to Vertex

policy / SLA project management policy is known and 'respected';policy is aligned to Collette's policyclear description of communication linesswift response on mutual questions (for approval / for information)

on time delivery delivery as promised/planned, and stick to it number of milestones/deliverable on time (%)(quality and performances are IMPLICIT) (both internal , as external)

internal customers are also customers

be

st a

dd

ed

va

lue

to V

ert

ex


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financial perspectivemargin % profit %

by all sub-linked objectives, margin % is keptsay no more profitability remains, as pre-calculated

revenu growth new customers

due to positive response (project success) , other customers create revenu growth

(sales / customer's satisfaction)

cost overrun defined project cost/budget must be respected

busi

ness

lead

ersh

ip &

pr

ofit


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• Initiate approach on a thorough manner;• All concerned topics: project, innovation, processes, and solutions, product

management (high level);• Output:

– Recommandations (with solid pros & cons!);

• Members:– ‘Business’-Guru’s, sales, R&D, PM, engineers, The Company’s management;

• Pittfall :– >< project Steering Committee !

Think -tank


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engineering & solutions : solutions provider

• Product life cycle management– R&D effort and solution driven approach– Buy or make assessment of components;

• Based on well thought assessment to reduce risks, and uplift the margin• Market competition;

– The Company should be “engineered solutions provider”, or will not be;

product / application

management


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People, learning, and growth

– Assessment to ‘measure’ employee satisfaction;– Will increase performance (1th degree)– Training– Courses, provide & share information , involvement in company’s management,

feel good programme, pleasant working environment,…

Employee satisfaction


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• Training staff:– Assessment/identify of needed / required skills to perform specific role– Will increase performance, and efficiency (1th degree);– Secondly, will improve drastically the motivation of the staff member, with will

improve the performance, and efficiency; the result is a more motivated staff

– Compose individual training / career path;• CAD , management , technical skills, depending on career path• Self-education, company organised training.

“training staff’ is typically a “self- enforcing’ dynamic

training staff


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• PM skills:– Could be part of ‘training staff’, but in project driven environment, can be specifically

threatened;– Assessment/identify of needed / required skills to perform PM role, based on individual profile;– Will increase performance, and application of PM methodology within the project (1th degree);– Secondly, a PM is functionally a managing director of a SME, having attention for all aspects of

managing a project (incl soft-skills)

– Compose individual training / career path;• Output must be certification in a acknowledged project methodology (Prince 2, PMI/PMP),

management , technical skills, depending on career path, and previous experience;• Self-education, company organised training.

“PM Skills’ is typically a “self- enforcing’ wheel/dynamic

PM skills


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Internal business&process

• Efficiency:– Core of project organisation, with multiple elements supporting efficiency, or at

least having impact on;– Re-enforcing circles:

1. processes, kiss, tools, performance

2. Innovation, re-use, product management

3. Project methodology, project management, roles and responsibility

– Efficiency has direct impact on MARGIN %

• Less ‘efficiency’ costs margin%;– Focus and management of the re-enforcing circles to manage and improve

‘efficiency’;

efficiency


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Internal business&process

• Product / service management:– Important to compose engineered solutions:

• Product life cycle management, or• Purchased product / applications

– Sign strategic contracts with suppliers (incl. SLA), or;– Competition on market;

• Assess and balance which to make, and what to buy;– Define cost of ownership (TCO) for each product / application

– Product life cycle:• List all applications;• Define (-end of-) life cycle;• Prepare ‘next generation” (by Engineering’s management, R&D, and sales)

– Assign budget, and timing (incl. testing);– In general, projection of life cycle is possible;

Product / service management

Most important for Company is to enable strategic advantage

project management dynamics

Business

project conformities

project measure

project bsc

project organisation

project kpi

greenlack of project

project execution policy

late project phasedue