Lessons in Project Management - 7 - Project Performance Management

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Lessons in Project Management - 7 - Project Performance Management

  1. 1. International Project ManagementProf. Dr. Frank HabermannLecture 7 –Project Performance Management
  2. 2. Content Understanding project related sub-systems Basic performance management model – Reporting project prgress – Controlling project progress Project portfolio management model Enterprise project management model © Becota GmbH | www.becota.com | 2010
  3. 3. Performance against what? © Becota | www.becota.org | 2010
  4. 4. Remember lecture#1:Each project is a system Each system has a certain structure shows specific behavior! SYSTEM Sub System A Sub Sub INPUT OUTPUT system System B System C (element) acting as acting as Sub-sub Sub-sub „receiver“ „sender“ System C1 System C2 (customer) (provider) ... Static relationships Dynamic relationships (composition/decomposition) (communication/collaboration) © Becota | www.becota.org | 2010
  5. 5. Remember lecture #5:Breaking down the project in sub-systems Processes & Taskswork breakdown structure project sub project work package task © Becota | www.becota.org | 2010
  6. 6. Remember lecture #5:Breaking down the project in sub-systems Processes & Taskswork breakdown structure project sub project measurable items! work package task © Becota | www.becota.org | 2010
  7. 7. Organizing interrelated sub-systems Processes & Tasks Roles & Responsibilitieswork breakdown structure organisational structure project project manager sub project work package task © Becota | www.becota.org | 2010
  8. 8. Organizing interrelated sub-systems Processes & Tasks Roles & Responsibilitieswork breakdown structure organisational structure project project manager sub sp project manager work wp package owner task task owner © Becota | www.becota.org | 2010
  9. 9. Organizing interrelated sub-systems Processes & Tasks Roles & Responsibilities Resources & Toolswork breakdown structure organisational structure project goal structure Q project Project project manager goals C T sub sp project manager work wp package owner task task owner © Becota | www.becota.org | 2010
  10. 10. Organizing interrelated sub-systems Processes & Tasks Roles & Responsibilities Resources & Toolswork breakdown structure organisational structure project goal structure Q project Project project manager goals C T sub sp sp project manager goals work wp wp package owner goals task task task owner goals © Becota | www.becota.org | 2010
  11. 11. Project management model Project Management Sub Project Management Work Package Management © Becota | www.becota.org | 2010
  12. 12. Project management model Project Management one Sub Project few Management Work Package many Management © Becota | www.becota.org | 2010
  13. 13. Project management model processes Project Management Sub Project technology Management Work Package Management people © Becota | www.becota.org | 2010
  14. 14. Project management model define criteria set parameters monitor progress processes Project Management controlling reporting Sub Project technology Management Work Package Management collect data people analyse information communicate progress © Becota | www.becota.org | 2010
  15. 15. Reporting the project‘s progress © Becota | www.becota.org | 2010
  16. 16. S/he who writes stays in the job!Source: http://www.articlemarketinghq.com/wp-content/uploads/2010/12/writer.jpg © Becota | www.becota.org | 2010
  17. 17. Trivial reporting cycleSource: http://www.projects.uts.edu.au/images/diagram16.gif © Becota | www.becota.org | 2010
  18. 18. More sophisticated reporting schedule Once Daily Weekly At Phase ReviewSource: http://www.jiscinfonet.ac.uk/images/report-schedule.png © Becota | www.becota.org | 2010
  19. 19. Remember lecture#2: Know your stakeholders and have a communication planSource: Verzuh, E., The Fast Forward MBA in Project Management, p. 74 © Becota | www.becota.org | 2010
  20. 20. Controlling the project‘s progress © Becota | www.becota.org | 2010
  21. 21. Right or wrong? The closer the deadline comes, the more important is controlling project progress (in order to ensure success).Source: http://www.aviationlawmonitor.com/uploads/image/a3-52_control_tower.jpg © Becota | www.becota.org | 2010
  22. 22. Wrong! But celebrate, even if your luck is undeserved…Picture source: adapted from www.freakingnews.com/pictures/29500/Air-Traffic-Control- © Becota | www.becota.org | 2010
  23. 23. Project performance managementalready starts with the business case Business caseSource: adapted from Craig Brown, Project Management, 9. Performance Management,received via www.slideshare.net on May 4, 2010 © Becota | www.becota.org | 2010
  24. 24. Project performance managementalready starts with the business case Business WBS case PlanSource: adapted from Craig Brown, Project Management, 9. Performance Management,received via www.slideshare.net on May 4, 2010 © Becota | www.becota.org | 2010
  25. 25. Project performance managementalready starts with the business case Business WBS case Plan Delive- Project Budget rables planSource: adapted from Craig Brown, Project Management, 9. Performance Management,received via www.slideshare.net on May 4, 2010 © Becota | www.becota.org | 2010
  26. 26. Project performance managementalready starts with the business case Business WBS case Plan Delive- Project Budget rables plan Track cost & Track output Track task effort quality duration (time sheets) (product models) (gantt chart) ControlSource: adapted from Craig Brown, Project Management, 9. Performance Management,received via www.slideshare.net on May 4, 2010 © Becota | www.becota.org | 2010
  27. 27. Project performance managementalready starts with the business case Business WBS case Plan Delive- Project Budget rables plan Track cost & Track output Track task effort quality duration (time sheets) (product models) (gantt chart) Control Compare plan/model to realitySource: adapted from Craig Brown, Project Management, 9. Performance Management,received via www.slideshare.net on May 4, 2010 © Becota | www.becota.org | 2010
  28. 28. Project performance managementalready starts with the business case Business WBS case Plan Delive- Project Budget rables plan If there is no time left to take action, controlling does not Track cost & Track output Track task make any sense! effort quality duration (time sheets) (product models) (gantt chart) Control Compare plan/model Take action to realitySource: adapted from Craig Brown, Project Management, 9. Performance Management,received via www.slideshare.net on May 4, 2010 © Becota | www.becota.org | 2010
  29. 29. Remember lecture#1:Standard project management life cycle INITIATE RUN COMPLETE Project Contract Detailed Project Require- Charter Rough ments Require- Definition Test Project Plan Hand-over ments Conceptual Approvals Documention Plan Solution (technical & (e.g. Support Definition (Models) organizational) Info) Solution Closure Documentation Report Training Plan © Becota | www.becota.org | 2010
  30. 30. Project performance managementproceeds with detailed plans, models, and concepts RUN Rough Test Plan Require- Detailed Training ments Require- Plan Definition Conceptual Solution Plan ments Solution Documentation Definition (Models) © Becota | www.becota.org | 2010
  31. 31. Project performance managementproceeds with detailed plans, models, and concepts RUN Rough Test Plan Require- Detailed Training ments Require- Plan Definition Conceptual Solution Plan ments Solution Documentation Definition (Models) Track output quality (product models) Control Compare plan/model to reality Take action © Becota | www.becota.org | 2010
  32. 32. Example for tracking time (activity-based)Source: Figure 13.1 Baseline Gantt Chart (Gray & Larson, 2006, p414) © Becota | www.becota.org | 2010
  33. 33. Example for tracking time (activity-based) Alternative (simplified) approach using the 0-50-100 rule: 0 = not started yet 50 = started, but not completed* 100 = completed * Should not appear in a series of status reportsSource: Figure 13.1 Baseline Gantt Chart (Gray & Larson, 2006, p414) © Becota | www.becota.org | 2010
  34. 34. Example for tracking time (cumulative)Source: Figure 13.2 Project Schedule Control Chart (Gray & Larson, 2006, p415) © Becota | www.becota.org | 2010
  35. 35. Earned value analysisCombining budget and schedule status to get a complete picture of the project ahead under Schedule Budget on on behind over © Becota GmbH | www.becota.com | 2010
  36. 36. Earned value analysisCombining budget and schedule status to get a complete picture of the project ahead under Schedule Budget on on behind over 3x3 = 9 possible combinations © Becota GmbH | www.becota.com | 2010
  37. 37. Important terms Cost variance: the difference between budgeted cost (also called „earned value“) and actual cost for the work completed CV = BC – AC » If CV positive => „under budget“ (GOOD) » If CV negative => „over buget“ (BAD) © Becota GmbH | www.becota.com | 2010
  38. 38. Important terms Cost variance: the difference between budgeted cost (also called „earned value“) and actual cost for the work completed CV = BC – AC » If CV positive => „under budget“ (GOOD) » If CV negative => „over buget“ (BAD) Schedule variance: the difference between scheduled completion time and actual completion time of the activities performed SV = ST – AT » If SV positive => „ahead of schedule“ (GOOD) » If SV negative => „behind schedule“ (BAD) © Becota GmbH | www.becota.com | 2010
  39. 39. Cost and schedule performance chartSource: http://pmtips.net/wp-content/uploads/2009/11/escalation-threshold.jpg © Becota | www.becota.org | 2010
  40. 40. Cost and schedule performance chart Re P1 to P4: what is the least and what is the most critical project? P4 P2 P1 P3Source: http://pmtips.net/wp-content/uploads/2009/11/escalation-threshold.jpg © Becota | www.becota.org | 2010
  41. 41. Cost and schedule performance chart TRADE-OFF GOOD BAD TRADE-OFFSource: http://pmtips.net/wp-content/uploads/2009/11/escalation-threshold.jpg © Becota | www.becota.org | 2010
  42. 42. Cost and schedule performance chart Common business practice: grey shaded area represents variance within the discretion of the project manager (i.e. not requiring any escalation)Source: http://pmtips.net/wp-content/uploads/2009/11/escalation-threshold.jpg © Becota | www.becota.org | 2010
  43. 43. Now, let‘s take it to the nexthigher business level © Becota | www.becota.org | 2010
  44. 44. Remember lecture#3:Project scoping and contracting Business need & purpose Shall we initialize this project? Project © Becota | www.becota.org | 2010
  45. 45. Not every business need will lead to a project! Need 2 Need 6 Need 8dozens/ …Need n Need 1 Need 4hundreds/thousands Need 3 Need 7 Need 9 Need 5single/some/X percent of… Project(s) ? © Becota | www.becota.org | 2010
  46. 46. Not every business need will lead to a project! Need 2 Need 6 Need 8 …Need n Need 1 Need 4 Need 3 Need 7 Need 9 Need 5 Limitations Strategic fit - Money - Brands - Time - Culture - Resources - Capabilities Project(s) © Becota | www.becota.org | 2010
  47. 47. Project portfolio management model Portfolio Management Program Management Project ManagementSource: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 360, 384 © Becota | www.becota.org | 2010
  48. 48. Project portfolio management model Main goal Align project selection with business strategy Portfolio Main tasks Management • Identify major stakeholders and continuously communicate portfolio (review, maintain, select alternatives) • Define project governance factors and Program corporate project standards Management • Order and assess project requests from the business (business cases) • Assign project resources based upon strategic priorities Project Management • Optimize deployment of resources across project boundaries • Set up programs to enhance effectivity of interrelated projectsSource: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 360, 384 © Becota | www.becota.org | 2010
  49. 49. Portfolio managementis based on strategic management methods Competitive Forces Balanced Scorecard Portfolio Management SWOT Analysis ROI Analysis Strategy Map … and many more! © Becota | www.becota.org | 2010
  50. 50. Project portfolio management as a process (part 1) Review business strategySource: adapted from Gray/Larson (2006), Figure 2.1 Strategic Management Process, p25 © Becota | www.becota.org | 2010
  51. 51. Project portfolio management as a process (part 1) Review business strategy External Internal Where are environment: environment: we now? opportunities, strengths, threats weaknessesSource: adapted from Gray/Larson (2006), Figure 2.1 Strategic Management Process, p25 © Becota | www.becota.org | 2010
  52. 52. Project portfolio management as a process (part 1) Review business strategy External Internal Where are environment: environment: we now? opportunities, strengths, threats weaknesses Define measurable goals Where do we want to be? Define portfolio alternativesSource: adapted from Gray/Larson (2006), Figure 2.1 Strategic Management Process, p25 © Becota | www.becota.org | 2010
  53. 53. Project portfolio management as a process (part 1) Review business strategy External Internal Where are environment: environment: we now? opportunities, strengths, threats weaknesses Define measurable goals Where do we want to be? Define portfolio alternatives Implement portfolio strategy How do we get there? Select projectsSource: adapted from Gray/Larson (2006), Figure 2.1 Strategic Management Process, p25 © Becota | www.becota.org | 2010
  54. 54. Project portfolio management as a process (part 1) Review business strategy External Internal Where are environment: environment: we now? opportunities, strengths, threats weaknesses Define measurable goals Where do we want to be? Define portfolio alternatives Implement portfolio strategy How do we get there? Select projects © Becota | www.becota.org | 2010
  55. 55. Project portfolio management as a process (part 2) CUSTOMER (Business) (Executives) BOARD Manager(s) OPERATIONS PORTFOLIO (Business)Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385 © Becota | www.becota.org | 2010
  56. 56. Project portfolio management as a process (part 2) business-internal CUSTOMER (Business) pre-assessment Problem or Request opportunity! a project (Executives) BOARD Manager(s) OPERATIONS PORTFOLIO (Business)Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385 © Becota | www.becota.org | 2010
  57. 57. Project portfolio management as a process (part 2) business-internal CUSTOMER (Business) pre-assessment Problem or Request opportunity! a project business (Executives) case BOARD Manager(s) OPERATIONS PORTFOLIO Collect and assess proposals (Business)Source: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385 © Becota | www.becota.org | 2010
  58. 58. Project portfolio management as a process (part 2) business-internal CUSTOMER (Business) pre-assessment Problem or Request opportunity! a project business (Executives) case BOARD Manager(s) OPERATIONS PORTFOLIO Collect and assess proposals (Business) Run projectsSource: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385 © Becota | www.becota.org | 2010
  59. 59. Project portfolio management as a process (part 2) business-internal CUSTOMER (Business) pre-assessment Problem or Request opportunity! a project business (Executives) case BOARD Manager(s) OPERATIONS PORTFOLIO Collect and Portfolio assess proposals Management Program Management (Business) Run projects Project ManagementSource: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385 © Becota | www.becota.org | 2010
  60. 60. Project portfolio management as a process (part 2) business-internal CUSTOMER (Business) pre-assessment Problem or Request opportunity! a project business (Executives) case BOARD Manager(s) OPERATIONS PORTFOLIO Collect and assess proposals Check resources & portfolio (Business) Report current projects progress Run projects Report availability of resourcesSource: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385 © Becota | www.becota.org | 2010
  61. 61. Project portfolio management as a process (part 2) business-internal CUSTOMER (Business) pre-assessment Problem or Request opportunity! a project business (Executives) case BOARD Approve project project candidates candidates Manager(s) OPERATIONS PORTFOLIO Collect and assess proposals Check resources & portfolio (Business) Report current projects progress Run projects Report availability of resourcesSource: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 385 © Becota | www.becota.org | 2010
  62. 62. Project portfolio categoriesA portfolio is made up of different categories.Type and number of categories are resulting from strategic considerations.Within each category projects are ranked according to their priority. Project A Project M Project S Project B Project N Project T Project C Project O Project U Project D Project V Project W Project X Category: Category: Category: Sustaining Cost-Cutting New RevenueSource: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 388 © Becota | www.becota.org | 2010
  63. 63. Creating and selecting portfolio optionsProject category is represented by a circle‘s color.Project cost is represented by a circle‘s diameter. Most A N BENEFIT to business U O C Least Least EASE Most of implementationSource: adapted from Eric Verzuh, The Fast Forward MBA in Project Management, pp. 391 © Becota | www.becota.org | 2010
  64. 64. finally, let‘sbring it all together © Becota | www.becota.org | 2010
  65. 65. Enterprise project management model Portfolio Management Program Management Project Project Management Management Sub Project Management Work Package Management © Becota | www.becota.org | 2010
  66. 66. Enterprise project management model Portfolio Management less then 5* Program some more Management Project dozens Management Sub Project hundreds Management Work Package up to thousands Management * In very big enterprises © Becota | www.becota.org | 2010
  67. 67. Your business is comparable to a system of railway tracksSource: A.W. Scheer © Becota GmbH | www.becota.com | 2010
  68. 68. A business process is comparable to a regular train on the trackSource: A.W. Scheer © Becota GmbH | www.becota.com | 2010
  69. 69. A business project is a very special business process: it is comparable to a very special train on the trackPicture source: http://media.news.de/resources/thumbs/37/ © Becota GmbH | www.becota.com | 2010
  70. 70. Business controlling is comparable to the railway control center‘s workSource: A.W. Scheer © Becota GmbH | www.becota.com | 2010
  71. 71. Enterprise project management model Portfolio Strategic Management Level Program Management Tactical Project level Management Sub Project Management Operational level Work Package Management © Becota | www.becota.org | 2010
  72. 72. Enterprise project management levels Management level strategic tactical operational © Becota GmbH | www.becota.com | 2010
  73. 73. Enterprise project management levels Management level Project is… Spending the weekend approved at the sea. Going by strategic car. Avoiding major highways. controlled tactical executed operational © Becota GmbH | www.becota.com | 2010
  74. 74. Enterprise project management levels Management level Project is… Spending the weekend approved at the sea. Going by strategic car. Avoiding major highways. Business Case/ Contract controlled tactical Deliverables / Budget / Schedule executed operational © Becota GmbH | www.becota.com | 2010
  75. 75. Enterprise project management levels Management level Project is… Spending the Only the things you measure weekend you can manage! approved at the sea. Going by strategic car. Avoiding major highways. controlled tactical Performance is measured executed bottom up! operational © Becota GmbH | www.becota.com | 2010
  76. 76. Enterprise project management model With portfolio management Portfolio you make projects an integrated Strategic Management part of our regular business! Level Program Management Tactical Project level Management Sub Project Management Operational level Work Package Management © Becota | www.becota.org | 2010
  77. 77. Thank you very much!presentation byFrank Habermann founder of Becota and Professor of Business http://de.linkedin.com/in/frankhabermann/en
  78. 78. If you have enjoyed this presentation,please let us know!You can download this file from the Berlin Consulting Forum-> join the forum at http://consultingforum.becota.org-> visit our corporate website at http://www.becota.com

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