SKEMA BUSINESS SCHOOL
MASTER OF SCIENCE IN PROJECT AND PROGRAMME
MANAGEMENT &BUSINESS DEVELOPMENT
LAST NAME: Delepierre
GI...
Chris	
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Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
Thèse professionnelle sur les indicateurs de performance RSE et le management de projet
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Thèse professionnelle sur les indicateurs de performance RSE et le management de projet

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Thèse professionnelle sur les indicateurs de développement durable dans le cadre du Master of Science de gestion de projet à Skema Business School - octobre 2013.

La mesure de la performance durable des projets en entreprise est un thème assez récent que de nombreuses recherches tentent d'approfondir car, après s'être peu à peu installées en entreprise, les stratégies RSE ont désormais besoin de s'armer d'outils et de méthodes rationnels pour légitimer leurs bénéfices et mesurer les progrès accomplis grâce à des données fiables à l'échelle des projets, au niveau opérationnel, et non plus seulement au niveau corporate de la stratégie globale de l'entreprise.

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Thèse professionnelle sur les indicateurs de performance RSE et le management de projet

  1. 1. SKEMA BUSINESS SCHOOL MASTER OF SCIENCE IN PROJECT AND PROGRAMME MANAGEMENT &BUSINESS DEVELOPMENT LAST NAME: Delepierre GIVEN NAME: Chris NATIONALITY: French TUTOR: Philippe Vaesken SPONSORING ORGANIZATION: Réseau Alliances – World Forum Lille WORD COUNT : 22630 PAGE COUNT : 78 TITLE: SUSTAINABLE PROJECT MANAGEMENT: THE SUSTAINABLE KEY PERFORMANCE INDICATORS Keywords: Project management, Sustainability, KPI (Key Perforamnce Indicator), CSR (Corporate Social Responsibility), Integrated Reporting, CSV (Creating Shared Value), “Triple Bottom Line” accounting, SROI (Social Return Of Investment), sustainability index, universal accounting, ESG evaluation (Environment, Social and Governance) « I certify that this work is personal, quote all the sources used and does not contain plagiarism » Chris DELEPIERRE
  2. 2. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   2 I. TABLE OF CONTENT I.   Table of content ...................................................................................................................2   II.   Introduction ........................................................................................................................4   A.   Title of the thesis ............................................................................................................4   B.   Problem...........................................................................................................................4   1.   Choice of this topic .....................................................................................................4   2.   Sub-questions ..............................................................................................................5   C.   Scope of the thesis ..........................................................................................................6   1.   Level of study..............................................................................................................6   2.   2 ways of thinking.......................................................................................................6   3.   According the type of project......................................................................................7   4.   According the project life cycle ..................................................................................9   D.   Structure of the thesis: the main parts ..........................................................................11   III.   Contextualization and Stakes ..........................................................................................11   A.   Sustainable Development, Triple Bottom Line, CSR and CSV...................................11   B.   Sustainability in projects ..............................................................................................13   1.   Some reminders about project management .............................................................13   2.   Reasons for sustainable project management............................................................13   3.   The position of project management.........................................................................14   4.   Two approaches of sustainable project management................................................15   5.   Sustainability monitoring and controlling.................................................................17   C.   Stakeholders consideration...........................................................................................17   1.   Definition ..................................................................................................................17   2.   Stakeholder theory.....................................................................................................19   3.   Process of stakeholders classification .......................................................................20   4.   Dynamic analysis tool: theory of stakeholder identification and Salience (Mitchell, Agle and Wood – 1997) ...................................................................................................21   5.   Examples of stakeholders..........................................................................................22   6.   Stakeholders pressure................................................................................................23   7.   Recommendations, rules and responsibility..............................................................24   IV.   New indicators, New reporting .......................................................................................25   A.   Classical project reporting and KPI..............................................................................25   1.   Definition ..................................................................................................................25   2.   Indicators establishment............................................................................................27   3.   The indicators necessity ............................................................................................29  
  3. 3. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   3 4.   Efficiency (“efficience”) and Effectiveness (“efficacité”)........................................30   5.   Monitoring and controlling process ..........................................................................31   6.   Regular project monitoring .......................................................................................32   B.   Sustainability KPI and Reporting.................................................................................35   1.   New indicators necessity...........................................................................................35   2.   Sustainable KPI.........................................................................................................42   3.   Sustainable reporting.................................................................................................46   4.   The Balanced Scored Card........................................................................................50   5.   Notes about the difficulties of these new KPI...........................................................53   C.   Standards and Methodologies.......................................................................................53   1.   The GRI: Global Reporting Initiative .......................................................................53   2.   ISO 26000 .................................................................................................................56   3.   Other guideline or standards......................................................................................58   4.   Best in class approach ...............................................................................................58   5.   CSR Best Practice framework from Réseau Alliances .............................................58   6.   Conclusion.................................................................................................................59   D.   Feedbacks from the field ..............................................................................................59   1.   Interviews..................................................................................................................59   2.   Case studies...............................................................................................................67   E.   CSR KPI Modeling.......................................................................................................71   1.   Some sustainable project KPI....................................................................................71   2.   Methodological advice ..............................................................................................72   3.   Composite indicator ..................................................................................................72   4.   The form of the reporting..........................................................................................73   V.   Conclusion........................................................................................................................75   VI.   References.......................................................................................................................77  
  4. 4. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   4 II. INTRODUCTION A. TITLE OF THE THESIS The thesis will focus on CSR performance indicators and project management: Sustainable Project Management: The sustainable key performance indicators This thesis will deal with the Corporate Social Responsibility (CSR), Key Performance Indicators (KPI) and the project management as part of the MSc. Project & Program Management and Business Development in SKEMA Business School. B. PROBLEM In the project management circumstance, what is the methodology to use so as to integrate sustainability in measuring of the project performance? 1. Choice of this topic The professional thesis in the MSc. PPMBD must cover three main aspects: the subject must be related to project management and business development, be linked with the professional world, especially with an issue from the organization I am currently working for: Réseau Alliances and be in a relevant academic research field My professional project This professional thesis is a real opportunity for me to think about a project that I hold dear and I want to go into depth. I am absolutely persuaded that the concept of sustainability becomes more and more important in the project management field. Project managers need new tools to evaluate Return of Investment of projects in terms of sustainability. As project manager or entrepreneur, I will define the suitable key sustainability criteria for my projects and this work will give me some clues to progress. Réseau Alliances and World Forum Lille The objective of this association is to assist companies so that they improve performance while better respecting people and the environment. The question asked by the organization is: which relevant measures should we ask to companies in order to have a global view of their CSR (Corporate Social Responsibility) approach? Thus, it will be very useful for my organization to have a method to define the suitable indicators for the evaluation of sustainability in projects and companies. Furthermore, Réseau Alliances organizes each year the World Forum Lille: a standard-setting forum for responsible economy. The objective is to make responsible economy real by promoting best practices of companies that, all over the world, perform their activities responsibly and thus make examples replicable. The topic of the 2012 edition was “Responsible companies, profitable companies”: Project managers need to be fiscally sustainable. They manage time and budget as well as socially and environmentally sustainable, they manage resources. The think tank entitled "World Forum Lille Institute” has already worked about CSR indicators: it has highlighted that this topic is a burning issue.
  5. 5. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   5 Expert in the domain of CSR, this organization will help me to find some people to interview, thanks to its large network of companies and experts. Link with Sustainable Project Management course We had a course with Mr. Vaesken as teacher in MSc. PPMBD about: ‘How to integrate sustainability into project management in order to save cost and get a higher customer satisfaction, get sustainable benefits and a longer term value for the customer.’ « The last part of the course was focused on monitoring and assessment in project management and sustainability. This part presents the different way of monitoring sustainability in project management and different assessment guidelines: Indicators, GRI, … » I want to deepen our understanding and increase our knowledge about these questions. Sustainability is a burning issue for nowadays companies Let's make no mistake about the question. Rather than get lost in discussions about whether or not sustainability creates value, it is probably more relevant and effective to reflect on the conditions for successful integration of sustainable development within the company. In France, the legal context following the Grenelle of the Environment is increasingly in favour of CSR reporting companies. Since January 1, 2003, quoted companies on the stock exchange under French law must publish in their annual report a number of information on "how they take into account the social and environmental consequences of their activities." This requirement was introduced by section 116 of the New  Economic  Regulations  Act  of  15   May   2001 and specified by a decree of 20 February 2002 on the nature of social and environmental indicators. The scope of this law was expanded under the Grenelle 2 law (article 225): it is primarily intended (for 2011) that the requirement applies (to verify their non-financial information) to any company with more than 500 employees, it is quoted companies on the stock exchange or not. For its part, the European Commission is part of a recommendation process that would force companies to publish reports of Sustainable Development. In addition, pressure from stakeholders about more transparency on the part of businesses, including access to quantitative data, is stronger. The objective of sustainable development is to "meet the needs of the present without compromising the ability of future generations to meet their own needs." Organizations of all kinds as companies have an important role to play in achieving this goal. The urgency and magnitude of the risks and threats for our society, alongside increasing choices and opportunities, will make transparency on economic, environmental and social impacts. Transparency is a key element in effective stakeholder relations, communication, reporting, and investment decisions. The definition and implementation of sustainability indicators within the projects in companies is an opportunity to measure progress towards sustainable development. 2. Sub-questions
  6. 6. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   6 We study the problem with the angle of a methodology for establishing conventional indicators incorporating the specificity of CSR indicators. First off, we will study first the academic literature and then the empirical information from the reality on the ground. The study is based on studies and research organizations as well as experts on specific cases of companies (testimonies, reports, best practices). Some sub-problems can be: • How to measure the immaterial benefits of projects (a new definition of value)? • Is there a method that would define the suitable indicators according the project? • Does it exist some tools to assess project sustainability performance? C. SCOPE OF THE THESIS 1. Level of study We will work on the project level, trying to loosen up the corporate level. This is critical point because most of the studies on the topic relate to the strategic level of the organization, not on the project level. So we will try to implement the Sustainability KPIs from the strategic level to the project level. 2. 2 ways of thinking We will discuss about sustainable project management (the inclusion of sustainability in the way to manage projects) ant not about management of sustainable projects (sustainability- oriented projects). Thus, we will be concerned about the project performance in the pipeline (Quality, Time, Cost) in terms of sustainability (Triple Bottom Line) and not about the direct or indirect impacts of project that is to say the performance of the deliverable or the product once the project is finished. ≠ Source:  Sustainability  and  Project  Management  course  part  3  in  MSc.  PPMBD  -­‐  Skema  Business  School   –  Philippe  Vaesken,  2012   For instance, how to integrate Sustainability in the way to manage the project?
  7. 7. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   7 Example: to avoid CO2 emission in a classical project, to take account the wishes of stakeholders. The thesis will focus on indicators of achievement or performance. They are used to measure the effort made. They are related to the'' efficiency and resources committed to the result actually achieved. 3. According the type of project We can distinguish three types of projects according to the degree of innovation, the sponsor and the result. Our approach of the problem will be different depending on the level of the project in these three dimensions. Here, we will define each type and determine the consequences in our study on sustainability indicators in the project management. a) Degree of innovation Although the degree of innovation is a continuous variable, we can roughly distinguish. (1) Closed  projects   The expected outcome is known at the beginning of the project, it leaves little room for creativity. Example: an application database for a client online banking. Features: Forecasts are (should be) reliable. If management is strict, the course does not suffer from major hazards. è Indicators are easily upstream defined in the project management. Project team should be strict in the measure; the data will be reliable. (2) Opened  project   The results of the project are defined very late. Choices are almost endless. Example: a game software for seniors Features: Critical Importance of exploration phases; functional approach required; Implementation techniques of creativity and important multidimensional risk. è Need to constantly redefine the indicators based on the criteria to measure.
  8. 8. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   8 b) Result We call deliverables, the outcome of the project. The result of the project is called work in the building trades and public works. More and more, the result of the project is a set of deliverables including hardware and intangible elements (software, procedures). This is called system (organizational, IT). A third group consists of projects to create series products. The result of these projects is the system (machines, materials, procedures, means of control,...) that will deliver the products in question. The project is completed when the production system is able to produce in quantity and quality. (1) Work  (or  system)   The project leads to a unique achievement, one-time project to develop a specific deliverable. Examples: The construction of a building, a highway, a factory. The realization of a special machine, a computer network. Features: The control of these projects is limited to the use of conventional tools of project management. We talk about projects controlled cost. è On a construction project, the performance indicators for sustainable construction and non- construction itself will be identified. (2) Product  development  -­‐  Market  driven   The result of the project is a system which itself produces objects in series. Examples: Airbus A380 project, a new CAD software Features: For the sponsor, the economic objective is long-term profitability rather strict budget control. We are dealing with projects profitability controlled. The project is often an innovative project. Marketing and sales aspects are paramount. The intellectual property concerns, design and ergonomics are often present. • R&D projects to develop solutions in response to a market need • Self funded – payback through sales (new clients/existing clients) • Significant part of activity in projects (multi-project environment) • Critical Issues: Reduce development time, capacity planning & risk management è For example, we can consider the overall energy consumption in the implementation of the project. (3) Organizational  project   The project is a set of deliverables including hardware and intangible elements: software, procedures Examples: Organization of the London Olympics, corporate reorganization, standardization ... è Project team will ensure that the suppliers of the project comply with social and environmental requirements in a responsible purchasing policy.
  9. 9. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   9 c) Sponsor Originally  the  project  process  is  the  realization  of  a  real  or  perceived  need.  In  business   or  external  projects,  the  trigger  is  the  formulation  of  a  need  by  call  for  tenders  from  a   customer  or  prospect.  Internal  projects  have  originated  in  the  desire  to  solve  a  problem   or  will  progress  in  a  specific  area.   (1) Internal  project   The company carries out the project for its own account. Example: The entrepreneur has decided to implement a system of quality management. Features: Frequent absence of cost control and difficulty of mobilizing internal resources. è Easy to measure because internal stakeholders project team should be mobilized. (2) External  projects  (or  business)  -­‐  contract  driven   The project is carried out on behalf of a third party. Example: An independent engineering firm designs and manufactures a special machine. Features: • In response to defined requirement; clear objectives • Clear definition of Customer/Supplier roles • Short term financing, direct payback from client • Multiple stakeholders: Owner, Consultant, Contractors, sub contractors • Critical Issues: Schedule adherence; Contract & Claim Management, Acceptance & payment milestones è Difficulties to define the scope when signing the contract and to obtain adequate measures. Of sustainability criteria are incorporated into the contract. Increasingly, there are social and environmental criteria in tender 4. According the project life cycle You have to take account the 3 different life cycles:
  10. 10. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   10 A relevant question could be: where do you introduce sustainability in the project? In the process? In the whole business? In the product? In the Project trajectory (PMI)? The subject of this thesis is about the methodology for the implementation of CSR indicators in sustainable project management. That’s why we will focus on project stages especially initial stage. In the life cycle of project, it should be noted that the majority of impacts are identified in the initial stages when the project is set (Pre-feasibility and feasibility phases). Indicators of sustainable performance must be determined very early in the project process. For example, majority of environmental impacts are determined in the early design phase: Source:  Sustainability  and  Project  Management  course  part  3  in  MSc.  PPMBD  -­‐  Skema  Business  School   –  Philippe  Vaesken,  2012   In the PMI methodology, we therefore focus on process groups or domains: Initiating, Planning and Monitoring and control. PMI process is set of interrelated actions and activities performed to achieve a pre-specified product, result or service. Project management process aims to ensure the efficient flow of the project throughout its existence include the tools and techniques involved in the application of skills and abilities described in the areas of knowledge related to the scope of the project. Product oriented process specify and create product produced the project and generally defined by the project life cycle and vary depending on the application are related to the scope of the product. These overall performance indicators are strongly related to various internal and external stakeholders and should hence evolved in relation to different phases of the project concerned. It is good to know that over the project progresses, the cost of changes increases. Sustainability should be introduced at the early stages of the project.
  11. 11. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   11 Source:  Risk  Management  course  in  MSc.  PPMBD  -­‐  Skema  Business  School  –  Alex  Barnes,  2012   D. STRUCTURE OF THE THESIS: THE MAIN PARTS 1) Contextualization and Stakes a. Sustainability in projects b. Taking into account all stakeholders c. Opening the scope of projects d. New indicators, new reporting 2) Theoretical and Practical approaches a. Standard methodologies b. Feedbacks from the ground 3) Some solutions and recommendations 4) Conclusion and opening III. CONTEXTUALIZATION AND STAKES A. SUSTAINABLE DEVELOPMENT, TRIPLE BOTTOM LINE, CSR AND CSV The company is evolving from an ownership policy to a partnership strategy. In addition, their strategy goes from a short-term vision, purely economic, to a long-term vision integrating economic, social and environmental issues. Thus, a manager who integrates sustainable development in its strategy is not only committed to ensure the profitability of its business but also to minimize the impacts of its activities on the environment and to take into account the interests of its stakeholders. “The term CSR is a brilliant one; it means something, but not always the same thing, to everybody.” (Votaw, 1973)
  12. 12. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   12 To have a CSR strategy is for the company is a strategic way to reduce risk exposure (including environmental and social). It is also a way for the company to differentiate itself from its competitors and gain market share. Indeed, some consumers are willing to pay more for a product, which respects some values. CSR seeks ultimately to promote morality in business, to consider the existence of a number of business partners and allows the company to argue either for purely financial framework but within a framework overall. It is therefore to measure the overall performance of the company and not just its economic performance. John Elkington developed the notion of Triple bottom line in 1999; it helps to understand how the overall performance is measured. It is to implement a comprehensive policy combining economic (profit), social dimensions (people), and environmental (planet). • Intersection between economic and environmental dimensions = viable; here, the approach the company aims to control costs and save resources, for example, to develop eco-design and industrial ecology or recycling waste. • Intersection between the economic and social dimensions = equitable; to combine economic efficiency and social equity is to promote equal opportunities, encourage training and promotion of staff, denied any form of discrimination or introduce expression groups or an employee shareholding system. • Intersection between the environmental and social dimensions = bearable; this translates to business for example through participation in local life, local hiring or consulting residents. The TBL approach is certainly a promising way to integrate external financial reporting. For this, the use of indicators is needed. We have to look for prosperity rather than wealth. The question of the time scale to take into account is essential: do we want quick or long-term return on investment? Mark Kramer is the co-author of the article in the Harvard Business Review, Creating shared value (CSV): Redefining Capitalism and the Role of the Corporation in Society, with Michael Porter, published in early 2011 in the Harvard Business Review. "Value creation is an idea that has long been recognized in business, where profit is revenues earned from customers minus the costs incurred. However, businesses have rarely approached societal issues from a value perspective but have treated them as peripheral matters. This has obscured the connections between economic and social concerns.”
  13. 13. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   13 They stressed the idea that "societal and corporate success are inextricably linked". They also stressed the importance of measuring the value created, going beyond simple reporting, and measuring the impact of actions. To be successful in the long term and to create value for its shareholders, the company must create value for society. CSV encourages businesses to create economic and social value simultaneously by focusing on the social issues. When an organization incorporates sustainability practices into its processes, it takes responsibility for the impact of its activities on customers, employees, shareholders, communities, and the environment through all aspects of operations. A sustainable focus recognizes the interdependence between companies and the broader society and encompasses the following aspects: - Human Rights: discrimination of vulnerable groups, civil rights, and fundamental rights and principles at work - Labour Practices: conditions of work, health and safety, and development and training - The Environment: sustainable resource use, pollution prevention, and climate change mitigation - Fair Operating Practices: anti-corruption, fair competition, and respect for property right - Consumer Issues: fair contractual practices, dispute resolution, and fair marketing - Community Involvement and Engagement: employee training and skills development, wealth and income creation, and community involvement The first responsibility of a project manager is to achieve the defined objectives but we must wonder how to do and especially what to do. B. SUSTAINABILITY IN PROJECTS 1. Some reminders about project management Project management is the discipline of planning, organizing, securing, managing, leading, and controlling resources to achieve specific goals. According the Project Management Institute (PMI), « a project is a temporary endeavour undertaken in order to create a unique product, service or deliverable. » A project is a temporary endeavour with a defined beginning and end (usually time- constrained, and often constrained by funding or deliverables), undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value. We can define five characteristics about project: • Change: projects enable this • Temporary: projects ended when change achieved • Cross functional: multi-functional, people with different skills working together impacting more than one area • Unique: projects will not be the same • Uncertainty: threats & opportunities 2. Reasons for sustainable project management The concept of sustainability will become more and more paramount in the project management field. Sustainable development is a main business objective, and sustainable management of project requires looking projects in a whole new way. For too long, project
  14. 14. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   14 managers worked on their projects as if they were in an island, unrelated to the strategy organization and governance and unrelated to the community. Project managers must be fiscally sustainable: Project managers have to manage the three constraints - quality, time and budget as well as socially and environmentally sustainable, they manage resources. Notwithstanding, sustainability is not just being "green" and be aware of the impacts on the environment. Project managers also need to assess the risks associated with labour practices, human rights, fair trade business and consumer issues. The objective is to integrate sustainable development into project management practices; project manager can make a difference according to Jennifer   Tharp,   PMP,   Global sustainability and Project management.   For Kerry Griffiths, sustainability consultant, a framework for sustainability project management ensures that the project is able to incorporate environmentally friendly practices in the phases of design, construction and operation of the project. The framework considers the social and economic aspects of project performance and provides management with a tool to measure, manage and reward outstanding performance on the project. Social, Environmental, Economic and Societal benefits & costs of projects must be taken account in the measure of project performance 3. The position of project management The temporary nature of projects may seem to contradict the long-term orientation of sustainability. However, projects help firms to realize long-term investment objectives. Projects and project management take place in an environment that is broader than that of the project itself. Understanding the framework in which the project takes place helps ensure that work is carried out in alignment with the goals of the enterprise and managed in accordance with the established practice methodologies of the organization. (PMI, PMBoK, 2008, p. 45)
  15. 15. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   15 Sustainability: Strategic Context for Project Management Responsibility for economic sustainability means moving beyond the simple ROI for the project and ensuring that it fits into the overall strategy of the firm. Project manager should ask: What are the organization main economic drivers? How will this initiative, once deployed, contribute to the long-term fiscal viability of the organization? Ensuring a project is socially sustainable involves reflecting on organizational culture, structure, and processes, existing human resource skills and personnel practices, both inside the firm and throughout the value chain. Reaching toward environmental sustainability requires a mature evaluation of capital equipment and facilities requirements, use of resources, purchasing practices, contract management, and industry standards. None of these are entirely new concepts. The PMBOK® Guide suggests doing an environmental analysis of factors around the projects to understand the business context (PMI, 2008, p. 44). Just as the project manager must understand the business benefits the project yields, he or she is also accountable for any long-term impacts of his or her projects. As project managers, we focus on getting from an idea to an implemented project, getting to a steady state. We’re not focused on longer-term issues like what happens to the product as it’s being manufactured, used, and disposed of. Project managers need to take a broad view of their role and to evolve from “doing things right” to “doing the right things.” This implies taking responsibility for the project results, including the sustainability aspects of that result. The developed product or service does not go away once we hand it over. It has an impact on the world, a useful period of operation, and ultimate disposal. In his book, Green Project Management, David Shirley explains to the Project Manager to think green means to look of the projects processes if he can make them greener. The benefits are multiple: more efficiency, better resources management (example: energy savings), better team work, … According the author, there are three ways to integrate green in project management: in the product delivered, in the process and in the organization. Green project management is not a new discipline, which does not give more work to think green. 4. Two approaches of sustainable project management We can distinguish two different approaches concerning sustainable project management:
  16. 16. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   16 -­‐ A top-down approach: the Corporate Social Responsibility strategy of the organization determines the way to manage sustainably the projects. -­‐ A stakeholders approach: the project management bear in mind the expectations of stakeholders both internal and external, and determines the level of sustainability of the project thus determining its impacts on the organization (bottom-up) and its environment. It implies to widen the scope of project management: sustainable project management should consider more stakeholders (internal and external as Society) and forecast the consequences and impacts of the project beyond the deliverable. Source:  Sustainability  and  Project  Management  course  part  3  in  MSc.  PPMBD  -­‐  Skema  Business  School   –  Philippe  Vaesken,  2012            
  17. 17. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   17 5. Sustainability monitoring and controlling   Quality standards will be used in the development of a base line and as the basis for monitoring and controlling. Sustainability must be defined within the organizational quality standard. The management plan will establish thresholds for sustainability quality measurements to help in managing corrective and preventive changes for the project. Project communication management: Build sustainability and responsibilities into the communication plan; Give everyone something to manage and contribute to standards (ISO 14000, 26 000, GRI) can be used to help develop the reporting requirements along with roles and responsibility for monitoring and controlling the information flows. Project procurement management: Sustainability planning scope must not be compromised in procurement. The project manager and project management team must ensure proper management and oversight from beginning to end of the project life cycle. Project human resources management: The sustainability roles and responsibility for each project team member must be defined and tied to performance metrics used in the project community. Sustainability requirements must be developed in the human resource plans.   C. STAKEHOLDERS CONSIDERATION 1. Definition Each stakeholder brings into the project his or her world, culture, language, and history. The stakeholder must be comprehended ... but how? Let’s start, one more time, with the definition of stakeholder. According the PMBOK® Guide, 4th edition, « stakeholders are persons or organizations (e.g., customers, sponsors, the performing organization, or the public), who are actively involved in the project or whose interests may be positively or negatively affected by the performance or completion of the project. Stakeholders may also exert influence over the project, its deliverables, and the project team members. The project management team must identify both internal and external stakeholders in order to determine the project requirements and expectations of all parties involved. » In the 5th edition of PMBOK, there is an additional knowledge area: Project Stakeholders Management. The definition of stakeholders is very broad: « an individual, group or organization who may affect, be affected by, or perceive itself to be affected by a decision, activity or outcome of the project. »
  18. 18. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   18 Source:  Presentation  PMI  Nord  about  stakeholders  -­‐  Skema  Business  School  –  Philippe  Vaesken,  2013   Stakeholders are actively involved in the project; their interests may be positively or negatively affected by the performance or completion of the project. Which verbs relate to stakeholders according to the PMBOK® Guide? It is a very useful exercise to search and count in the text the occurrence of the word stakeholder (176 times in the fourth edition!) and collect the verbs that are near or referring to the word stakeholder. It is a linguistic trick to help us to answer to the question: “What should we do with stakeholders?”, § Managing § Identifying § Defining their risk tolerance § Interviewing § Requirement gathering § Communication § Influencing § Reporting That’s enough to teach us that the kind of comprehension the stakeholders need to receive is a complex one. This is already a very rich lesson we can obtain by taking words in our hands and playing with them, but there are also new lands to explore “beyond” the traditional approaches. The project management team must identify both internal and external stakeholders in order to determine the project requirements and expectations of all parties involved (asking questions, recording result, understanding needs). Furthermore, the project manager must manage the influence of the various stakeholders in relation to the project requirements to ensure a successful outcome. Here are the PMI process groups where you have to deal with stakeholders: -­‐ 3.3.2 Identify Stakeholders -­‐ 3.4.2 Collect Requirements -­‐ 3.4.13 Develop Human Resource Plan -­‐ 3.4.14 Plan Communications
  19. 19. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   19 -­‐ 3.5.3 Acquire Project Team -­‐ 3.5.4 Develop Project Team -­‐ 3.5.5 Manage Project Team -­‐ 3.5.6 Distribute Information -­‐ 3.5.7 Manage Stakeholder Expectations Project success is a subjective vision: success is in the eye of the beholder. 2. Stakeholder theory Stakeholder theory is a theory of organizational management and business ethics that addresses morals and values in managing an organization. R. Edward Freeman originally detailed it in the book Strategic Management: A Stakeholder Approach. It identifies and models the groups which are stakeholders of a corporation, and both describes and recommends methods by which management can give due regard to the interests of those groups. In short, it attempts to address the "Principle of Who or What Really Counts". The stakeholder theory of Freeman is primarily created to offer an alternative vision of what the purpose of a business, its reason to exist. When he writes, "the dominant ideology", led by personalities such as Milton Friedman, is that the purpose of the company is to raise the profit to redistribute to shareholders. Ed Freeman said it was a mistake. The profit is a result of the company's business, not its root cause. For him, the logic of Friedman shows that the company focuses only on shareholders and not to others impacted by the company's business, such as customers, employees or suppliers. Yet without them, it would go bankrupt. Freeman concludes that the purpose of the company is to meet the needs of stakeholders, that is to say all people affected by decisions taken by the company, which will then make a profit. Freeman's vision is revolutionary because it allows having a completely different outlook on the company. His vision also includes three crucial points to make a coherent system: -­‐ Freeman supports the "names and faces approach”: stakeholders are people with names and surnames. The company must agree to negotiate with them (and for that, identify relevant stakeholders representing different stakeholders issues). -­‐ Freeman is pragmatic. In philosophical terms, Freeman believes that one should not have absolute principles of decision. The company must agree to ask each of its points of view, to truly reflect the needs of stakeholders. Of course, she will not give up all its principles, but at least it will put the issue of relevance. -­‐ Freeman believes that a deal is still possible. In case of conflict of interests between stakeholders, the company should not choose one over the other, but seek a compromise, a third way that would satisfy both interests. Freeman argues that CSR and carries innovation because it allows imagining new ways. If on paper, this theory seems interesting, it is viewed from the outside more often with suspicion and there are few examples in business having taken the plunge considering its stakeholders as strategic assets rather than simple rooms recording institutional communication. In reality, behind the stakeholder theory is the latent opposition of thinking
  20. 20. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   20 that the economic vision is hardly compatible with the inclusion of an ethical dimension. Interest, as the main motivation of human behaviour is the fuel economic engine, could it be that ethics comes enrich or replace it? It is noted by Amartya Sen, Nobel economy price by showing that "the modern economy has recovered significantly impoverished by the distance that the economy away from ethics." When we oppose the shareholder vision from partnership vision, our economies are profoundly mistaken in assessing the wealth before getting poorer. The stakeholder’s theory applied to organizations looking to get out of this impasse than the paradox between strategic managements and ethics, between short and long term. 3. Process of stakeholders classification First, project manager should identify stakeholders: it identifies all people or organizations impacted by the project and documents relevant information about each stakeholder. Project Manager proceeds to a stakeholder analysis to identify both the stakeholders and their requirements. A stakeholder analysis is done through interviews, questionnaires, facilitated workshops. Relevant information deals with: -­‐ Stakeholder & Roles: a pre-defined list that project team has to update when necessary (for example once a supplier is awarded), -­‐ Category of stakeholders: to select the relevant category of stakeholders among a pre- defined list of four categories: Project Management Team, Project Team Member, Performing organization, external stakeholders; Project management can distinguish internal / external and primary / secondary stakeholders. -­‐ Project impact on stakeholders: to select how stakeholders are impacted by the project among: positively impacted, negatively impacted, neutral, -­‐ Project / Organization-related authority: select the authority over the project of each stakeholder among a qualitative scale: high, medium, low -­‐ Involvement in the project: select the involvement over the project of each stakeholder among a qualitative scale: high, medium, low.
  21. 21. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   21 Source:  Project  Communications  and  Project  Configuration  in  MSc.  PPMBD  -­‐  Skema  Business  School  –   Mary  McKinlay,  2012     In the stakeholder management plan, project manager can build a board by stakeholder to determine the associated documents, ‘When do they act ?’, the requirements, the objectives, the management plan, the access, ‘How often to contact them?’.   4. Dynamic analysis tool: theory of stakeholder identification and Salience (Mitchell, Agle and Wood – 1997) This is a proposal to classify stakeholders in a process of consultation (early phase of planning process) based on three major attributes: power, legitimacy and urgency. -­‐ Power is the capacity to influence the project deliverables (coercive, financial or material, brand or image) -­‐ Legitimacy is the perception of desirability, properness or appropriateness -­‐ Urgency is the requirements in terms of criticality & time sensitivity for the stakeholder These three criteria (legitimacy, emergency, power) would analyse the influence or non- influence of stakeholders on the management of the organization and how these stakeholders are included: "Which really counts."
  22. 22. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   22 The question is should we consider each stakeholder as the same level of importance or priority? Indeed, it is logical to consider definitive stakeholder as the most important stakeholder for the project and to give a medium priority for dominant, dangerous and dependent stakeholder. Nevertheless, project team should also consider dormant, discretionary and demanding stakeholder because these attributes can be gained or lost during the time period of the project. 5. Examples of stakeholders Here is a non-complete list: -­‐ Project team - Project manager - Project Management team - Other project team members -­‐ Sponsors -­‐ Customer / Users -­‐ Sellers / Business Partners - vendors -­‐ Suppliers - contractors -­‐ Functional managers - Operations management - Portfolio manager - Program manager - PMO -­‐ Employees -­‐ Shareholders -­‐ Government -­‐ Environment -­‐ Society - Local Communities -­‐ Competitors -­‐ Trade unions -­‐ NGO It is important to update throughout the project the inventory of stakeholders. Here is an example of stakeholder mapping for the organization of London Olympic Games project:
  23. 23. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   23 Source:  Project  Communications  and  Project  Configuration  in  MSc.  PPMBD  -­‐  Skema  Business  Scool  –   Mary  McKinlay,  2012   6. Stakeholders pressure Stakeholders can impact the project and business: -­‐ NGO denounce the bad behaviour thanks to campaigns -­‐ Consumers differentiate their buying -­‐ Trade union call out about new fields (environment, human rights by suppliers, employee savings scheme -­‐ Local authority become inescapable Project manager should seek to understand the potential impact on them and on the project. Here is a table that shows the different requirements for each stakeholder according the TBL: Stakeholders Economical Environmental Social Shareholders Financial results Risk management, anticipation, transparency Reputation and crisis management Public authorities Contribution to the national and local wealth Regulation respect Labour law respect Bank Economical durability, working capital requirement Management of financial impact of environmental risks Labour cost limitation Insurer Compensation amount Risk management Work-accidents Employees Social fairness, wages Local environment respect Motivation, internal consultation, training, employability
  24. 24. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   24 Clients Warranty, quality Consumption of resources Ethic, fair trade Supplier Long term relationships Specific specifications Ethical demands Sub-contractor Fair remuneration, development perspectives Environmental demands on process and product Audit, control, social demands, working condition Retailer Cost and margin control Decrease of packaging and transport Development of ethical products Competitors Benchmark Respect of production rules Respect of competition law, no social dumping Local authorities Economical durability Engagement in impact decrease Taking into account local needs, actor employment area NGO Corruption, bribery Engagement in impact decrease Human rights, transparency 7. Recommendations, rules and responsibility All stakeholders, including external should be taken into account in the project and therefore in its reporting. The questions are: which associated indicators (scope, definition, choice)? Which methodology to put in place? A recommendation is to integrate external stakeholders in the project and the reporting as soon as possible. We need to make internal, external stakeholders, give them responsibility and integrate them into the project governance. Indicators must adapt according to the expectations of each party involved previously defined. Stakeholders are in demand of different and specific indicators. A wide range of communication channels are used to communicate some "customized" information to stakeholders: product information to customers, information on the risks and potential financial impact to investors, information on the environmental performance of a given industrial site for a waterfront, etc. It is called the reporting 360° of the sustainable development performance of a project. Rules in projects help to regulate and manage stakeholders’ behaviours and actions and to pursue goal accomplishment and project success. But rules may also support stakeholders in acting out on responsibility (respons-ability: ability to respond) because they give guidance to choices and allow actions to be effective. Could you imagine how useless any decision, thought, or initiative would be in a context without clear rules? Nothing would relate to cause and effect, no condition would be evaluable, and, in the end, no “answer” would be possible. It is then clear that rules are necessary for responsibility, but to allow responsibility to be fully exercised, comprehension is needed as the main requirement: promoting and enhancing awareness and understanding of all possible actions, comprehension really makes the practice of being “respons-ible” fully applicable. In this sense, comprehension brings freedom in projects, beyond rules and roles.
  25. 25. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   25 Organizations around the world, and their stakeholders are increasingly aware of the need and benefits of socially responsible behaviour. The aim of corporate social responsibility is to contribute to sustainable development. The performance of an organization in relation to the society in which it operates and its impact on the environment has become an essential part of measuring its overall performance and its ability to continue to operate effectively. This is in part a reflection of the growing recognition of the need to ensure the health of ecosystems, social equity and good organizational governance. In the long term, the activities of all organizations depend on the health of the planet's ecosystems. Organizations and projects are subject to further their stakeholders review. IV. NEW INDICATORS, NEW REPORTING A. CLASSICAL PROJECT REPORTING AND KPI Project manager needs to take a good, long look at the numbers and indicators with proves. 1. Definition a) Indicator An indicator is an assessment tool and a decision support (management, monitoring, controlling) thanks to we will be able to measure a situation or trend relatively objectively, at a given time, or in time and / or space. An indicator is an instrument linked to an outcome measure and an evaluative question. It is the measure of: -­‐ A goal -­‐ A mobilized resource -­‐ An achievement -­‐ An effect Evaluative question affects the establishment of criteria determining the different indicators to compare with the objective to monitor. As an example of an evaluative question: to what extent is the temperature considered satisfactory? The goal may be 19°C, the criterion is the temperature level and the indicator provides a measure of 22 °C. An indicator is a descriptor, a measure to quantify or qualify a state, an effect or a margin of progress, information about the achievement of a goal or a tool for monitoring and identifying changes. An indicator is a simplified representation of a complex reality. Indicators for monitoring and updating the initial state in the form of a dashboard (the repository) are related to effectiveness.
  26. 26. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   26 Indicators of achievement or performance are used to measure the effort made and its consequences. They are related to efficiency. We can distinguish different levels of indicators -­‐ Context indicators -­‐ Performance indicators (focus on execution) -­‐ Monitoring indicators (according a repository) Source: Course of construction of relevant indicators by Philippe Vaesken b) Performance In the task execution, performance in the field of management, describes the end result produced by the company overall effort or project team. As part of an evaluation process, the performance analysis verifies that the organization achieves in an effective and relevant way (the good things), efficiently (quickly, at the right time, at the lowest cost) to produce the expected results and ultimately the needs and expectations of the customers or the organization. c) KPI: Key Performance Indicator A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPI’s are measurements used by a business to optimize and drive its performance. It is a selected indicator considered as key for monitoring the performance of the project. KPIs are commonly used by an organization to evaluate its success or the success of a particular activity as project. Accordingly, choosing the right KPIs is reliant upon having a good understanding of what is important to the organization. 'What is important' often depends on the department measuring the performance. That is why; project manager should make a study before choosing the KPI for the project according the stakeholders requirements. d) CSF: Critical Success Factor Critical Success Factors (CSF) is what must exist or be created for a project to be successful. We can say that KPI set of values used to measure progress towards satisfying Critical Success Factors. For example, for a holiday project, "good weather" can be a CSF and "Hours of sunshine" the KPI.
  27. 27. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   27 2. Indicators establishment To measure performance, project team should avoid impersonal indicators (related to a search for completeness and standardization) such as indicators batteries or standard indicators. a) Be SMART An indicator has to be SMART. The letters SMART broadly conform to the words Significant Measurable, Acceptable, with a Responsible and Temporal. • Significant: relevant to the subject-scale, proximity, correlation, purpose for the business • Measurable: qualitative or quantitative rather questionable • Acceptable: by the stakeholders
  28. 28. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   28 • With a Responsible: often the people responsible for the process • Temporal: continuous, repeatable over time, the value or outcomes are shown for a predefined and relevant period. You can add these criteria: -­‐ Shared: understandable and easily explicable -­‐ Easy to build and operate Some other characteristics can be applied for choosing the right KPI: timely, have the capacity to test direction, sensitive, specific, valid, reliable, unambiguous, accurate, available, cost-effective, feasible. b) Indicator description To build an indicator, it is necessary to define its description by identifying: The process information mode: -­‐ The scale (what) -­‐ The frequency (when) -­‐ The information holder (where) The construction of information mode: -­‐ Media (picture, map, graph,...) -­‐ Structures comparison (view changes) The collection of information: -­‐ The process -­‐ The cost -­‐ Admissibility The accountability: Who / where / what? Project indicators must be defined in the dictionary project. For example, we must explain exactly what is the '% of completion of the project' and the calculation rule: clear and common definition throughout the project. Similarly, we can define the ‘order of magnitude’: how far are we accurate about the numbers? (Tolerance interval) c) Indicator formatting Indicators sheet: -­‐ The name -­‐ The function (specify the object, what it is) -­‐ The construction method -­‐ The modes of interpretation (how it reads) -­‐ Related indicators Building media: -­‐ The dashboard / repository -­‐ The computer tool collection of data -­‐ The computer system management and operation
  29. 29. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   29 d) Data collection Data gathered must be: timely, cost, effective, reliable, unambiguous, accurate, sufficiently sensitive, and motivational. It is important to standardize the data collection, for instance, in a table grouping the indicators: Designation of the indicator Electricity Repository ADEME Category - scope Heating Source of data Invoices Unit kWh Department concerned Maintenance department Progress (not relevant, not started, pending, completed) Pending Project team should evaluate the cost of the data collection and have a tool to consolidate them. Project manager should check the data availability and determine the frequency of measurement. Be careful: 'What I really need is Information'; it the data trap to collect a lot of data without sense. 3. The indicators necessity There’s no question that key performance indicators (KPIs) are needed to help drive operational improvements. KPIs are absolutely essential for organizations to present performance information for all levels of the organization. « The stronger the metrics, the stronger the business case. » Even, in the history... Already in the first legal text known as the "Code of Hammurabi", forty centuries old, called how to solve a dispute between a shepherd and the owner who confided his flock to him in whole or part. At the end of the season, the shepherd must bring as many animals and if he says that the beasts were attacked and eaten (any animals he can not bring back alive), he must provide the major bones to prove that wild beasts tore it. There is already in its oldest legal text the notion of due date, indicators and negotiated solution. KPI contributes of project success: they align project goals, implement change and drive behaviour.
  30. 30. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   30 Source:  www.haironfirepm.com/wp-­‐content/uploads/2012/12/KPI-­‐infrographic.jpg   4. Efficiency (“efficience”) and Effectiveness (“efficacité”) Efficiency is linked to means whereas effectiveness is linked to objectives. Efficiency is doing the things right (good process and execution) whereas effectiveness is doing the right things (good selection, success). "Efficiency is doing things right; effectiveness is doing the right things.” Peter F. Drucker Efficiency = a measure of how economically resources/inputs (funds, expertise, time, etc.) are converted to results. Effectiveness = a measure of how the objectives of the action were achieved, or are expected to be achieved, taking into account their relative importance. At the end, we can say that ‘Doing the Right Things’ is more important than ‘Doing Things Right’. For example, if you have a marketing department with an incredibly talented leader who knows SEO, SEM, social media. You can generate a ton of traffic to your web site. If the traffic is blurred you may actually be doing harm to your business rather than an advantage. Sales department should have someone to deal with these incoming requests. If the people
  31. 31. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   31 who find themselves on your website are not well conducted to become customers, the work you have done to catch them is useless. And the reality is that you might be better off doing less activity but in doing the "right " activities really well. Smart people produce quality work. As manager, your job is to make sure that everyone understands how his or her efforts fit into the overall business strategy. Do the hard work and try to define your corporate goals and get them on paper. Everyone should be able to answer the question, "Why am I doing this? " Otherwise they are likely to be doing things right, but not the right things. In a nutshell, Tactical thinking is “doing things right,” while Strategic thinking is “doing the right things.” Strategic thinking is usually leadership: creating the vision whereas Tactical thinking is management: implementing the vision. 5. Monitoring and controlling process The monitoring priorities are actions to bring the project back on schedule: – Shorten the critical path – Reconsider the precedence requirements – Give priorities for activities with less than a specified float, high risk activities, activities using critical resources The control allow to answer these questions: – Is the project over achieving? – Is the project overspending? – What is the value of the work completed? – Have we been working on the right things? – Is the project over-staffed? – Were the estimates wrong? – Has the scope of work changed? – What is the new cost at completion?
  32. 32. Chris  DELEPIERRE                                                                                                                                                                                                                                                              2012-­‐2013   MSc  PPMBD  –  Centrale/Iteem                                                                                                                                                  Professional  Thesis  Research   32 6. Regular project monitoring a) Earned Value Management Performance measurement is a system for comparing the actual value of work accomplished against the planned value of work scheduled. Earned value technique was developed by cost accountants and is designed to help project staff keep better track of projects. EVM is a management methodology for integrating scope, schedule, and cost baselines (3 constraints of project), for objectively measuring project performance and progress. The puropose are to control cost, forecast Estimate-At-Completion and Estimate-To-Complete and find opportunities to get back the project on track. Performance is measured by: – Determining the budgeted cost of the work performed (BCWP, i.e., earned value) Comparing it to the: – Actual cost of work performed (ACWP, i.e., actual cost) – Planned value. Source:  Cost  Management  course  in  MSc.  PPMBD  -­‐  Skema  Business  School  –  Thierry  Verlynde,  2012   Budgeted cost of work scheduled (BCWS) is equivalent to the conventional concept of planned budget; it states what we have planned for a particular task (or work package) will cost.

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