Performance based planning in a nut shell (V5)

V5.0 Performance Based Management In A Nutshell 5 Principles and 5 Practices to Increase The Probability of Project Success Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012

Why Performance Based Management?  For projects to be successful they must deliver capabilities:  Not the work efforts,  Not the cost expenditures,  Not the documentation, test results, or the processes. Performance Based Management  Projects must deliver Principles and Practices for tangible beneficial Increasing the Probability of Project outcomes, measured in Success† † Program Success Probability, John Higbee, Defense Acquisition units meaningful to the University 9 May 2005 decision makers.Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 2/26

5 Immutable Principles † of all Successful Projects . . . 1. What Does DONE Look Like? 2. What is the path to DONE? 3. Do We Have Enough Time, Resources, And Money To Get To DONE? 4. What Impediments Will We Encounter Along The Way To DONE? 5. How Do We Know We Are Making Progress Toward DONE?5 Immutable Principles of Project Management, Copyright ©, Glen B. Alleman, 2012 3/26

  Identify Needed Capabilities needed to Elicit Technical & achieve the project Operational Requirements objectives or the particular needed for the system capabilities end state for a specific to be fulfilled. scenario. Apply Continuous Risk Management to each  Performance Based Management process area Execute Performance Establish Performance Measurement Baseline Measurement Baseline time– activities while assuring phased network of work technical performance is met activities describing the work to be performed  4 Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012

5 Practices of Performance Based Management (sm)5 Immutable Performance Continuous Principles Identify Define Execute the Measurement Risk Capabilities Requirements PMB Baseline (PMB) Management Technical and Incremental PhysicalWhere are we ConOps, Risk Operational Maturity Percent going? SOO, SOW Identification Based Plan Assessment CompleteHow are we Work Iterative and Riskgoing to get Breakdown Integrated Incremental Integrated Analysis there? Structure Master Delivery Master PlanWhat do we Resource Schedule Future (IMP) Riskneed along Management (IMS) Performance Planning the way? Plan Forecasting What Technical and Riskimpediments Risk adjusted 4 Levels of Programmatic adjustments to will we Performance Risk Uncertainty Risks assigned cost and encounter Measurement Tracking Assessment to all WBS schedule along the Baseline deliverables measures way? How do we Measures of Measures of Technical Earned Value Risk measure Effectiveness Performance Performance Management Control progress? (MoE) (MoP) Measures

 Define the Work Breakdown  Record direct costs. Structure(WBS).  Indentify the Organizational Performance Analysis Breakdown Structure (OBS).  Determine variances.  Integrate the WBS and OBS.  Sum Data and variances.  Manage action plans.  Schedule the work.  Identify the Products and  Incorporate Changes. Milestones.  Set the time phased budget. † These 11 are a subset of the 32 Criteria of ANSI–748B Earned Value ManagementPerformance Based Management(sm), Copyright ® Glen B. Alleman, 2012 6/26

Performance Based Management(sm) Addresses The Critical Aspects of Project Outcomes†  By their very nature, Programs are risky. The  Successful program management is risk management. Situation  Program management must be about avoiding surprises.  Traditional program management assumes technical and The program processes drive outcomes. Problem  Focusing on process alone has failed in the past.  Program management is about avoiding surprises. The Need  Measures of physical percent complete are mandatory.  Organizations execute projects. The  Adapting the organization culture to the project paradigm Context increases the probability of success.  Look to the final and intermediate outcomes as measures The of increasing the probability of success. Solution  Earned Value Management reveals surprises. † Project Management Case Study, Pierre Bonnal, CNAM IIM MBA Program, June 2004Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 7/26

What is an Outcome?  The Outcome does not need to be the end product.  The Outcome is the result of Work Packages increasing the measureable maturity of the product or service. Outcomes incrementally increase a capability’s maturity  Outcomes are specified and measureable.  Design complete and verifiable.  Development complete and testable.  Testing complete and validated.  Installation and deployment complete and operational. Outcomes result from “units of work” – the Work Package  Work Packages consume time and resources.  Work Packages are owned by a single accountable person.  Work Packages produce outcomes. Project Management Case Study, Pierre Bonnal, CNAM IIM MBA Program, June 2004Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 8/26

Five Practices Of Performance Based Management What capabilities are needed to fulfill the project goal, mission, or outcome? Identify Needed Define the set of capabilities needed to achieve the project objectives or the particular end Capabilities state for a specific scenario. Using the Concept of Operations (ConOps), define the details of who, where, and how this capability is to be accomplished, employed, and executed. What technical & operational requirements are needed to produce the capabilities? Establish Requirements Define the technical and operational requirements for the system capabilities to be fulfilled. Baseline First, define these requirements in terms isolated from any implementation details. Only then bind the requirements with technology. Establish What is the schedule to deliver products or services to produce the requirements?the Performance Build a time–phased network of work activities describing the work to be performed, the Measurement Baseline budgeted cost for this work, the organizational elements that produce the outcomes, and the Performance measures showing this work is proceeding according to plan. Execute What are the periodic measures of physical percent complete?the Performance Execute work activities, while assuring all Performance assessment represent 100% Measurement Baseline completion before proceeding. This means – No rework, no forward transfer of activities to the future. Assure all requirements are traceable to work & all work is traceable to requirements. What are the impediments to success and how are they being handled? PerformContinuous Risk Apply the processes of Continuous Risk Management for each Performance Based Management Management process area to: Identify, Analyze, Plan, Track, Control, and Communicate programmatic and technical risk. 9/26

 Define the capabilities needed to achieve the desired objectives or a particular end state for a specific scenario. Define the details of who, where, and how these capabilities are to be Identify Needed Capabilities accomplished, employed, and executed. What capabilities are needed to fulfill the Business Case or program Mission? 1.1  Partition system capabilities into classes of service within operational scenarios. Define Capabilities as  Connect the capabilities to system requirements using some visual modeling notation. Operational  Define Measures of Effectiveness (MoE) and Measures of Performance (MoP). Concepts  Define the delivery schedule for each measure of Performance and effectiveness. 1.2 Define  Define scenarios for each system capability. Capabilities  Connect these scenarios to a Value Stream Map of the increasing maturity of the program. through Scenarios or Use  Assess value flow through the map for each needed capability. Cases  Identify capability mismatches and make corrections to improve overall value flow. 1.3 Assess Needs,  Assign costs to each system element using a value flow model. Costs, and Risks  Assure risk, probabilistic cost and benefit Performance attributes are defined. of the Capability  Use cost, schedule and technical Performance probabilistic models to forecast Simultaneously potential risks to program performance. 1.4 Define  Make tradeoffs that connect cost, schedule, and technical Performance in a single Explicit, Balanced, and location that compares the tradeoffs and their impacts. Feasible  Use Measures of Effectiveness (MoE) and Measures of Performance (MoP) for these Alternatives alternative tradeoffs.Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 10/26

 What Does A Capabilities “Sound” Like?  We need the capability to pre‒process insurance claims at $0.07 per transaction rather than the current $0.11 per transaction.  We need the capability to remove 1½ hours from the retail ordering process once the merger is complete.  We need the capability to change the Wide Field Camera and the internal nickel hydride batteries, while doing no harm to the telescope.  We need the capability to fly 4 astronauts to the International Space Station, dock, stay 6 months, and return safely.  We need the capability to control the Hell Fire Missile with a new touch panel while maintaining existing navigation and guidance capabilities in the helicopter.  We need the capability to comply with FAR Part 15 using the current ERP system and its supporting work processes.Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 11/26

Define the technical and operational requirements that must be present for the system  Establish capabilities to be delivered. Define these requirements in terms isolated from any technology Technical and Operational or implementation. Assure each requirement is connected to a need system capability. Requirements Baseline What Technical and Operational Requirements are Needed to Produce the Capabilities? 2.1  Produce an overall statement of the customer need in the operational context. Perform Fact Finding  Develop the overall operational and technical objectives of the system that meets the need.  Defined the boundaries and interfaces of the system. 2.2  Gather required system capabilities, functional, nonfunctional and environmental Gather requirements, and design constraints. and Classify Requirements  Build the Top Down capabilities and functional decomposition of the requirements in a Requirements Management System. 2.3  Answer the question “why do I need this?” in terms of operational capabilities. Evaluate and Rationalize  Build a cost / benefit model using probabilistic assessment of all variables, their Requirements dependencies, and impacts.  For all requirements, perform a risk assessment to cost and schedule. 2.4  Determine criticality for the functions of the system. Prioritize  Determine trade off relationships for all requirements to be used when option decisions Requirements must be made.  For all technical items, prioritize their cost and dependency. 2.5 Integrate  Address the completeness of requirements by removing all “TBD” items. and Validate  Validate that the requirements are traceable to system capabilities, goals, and mission. Requirements  Resolve any requirements inconsistencies and conflicts.Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 12/26

 What Is a Requirement? A Requirement is …”A statement identifying a capability, a physical characteristic, or a quality factor that bounds a product or process need for which a solution will be pursued.” — IEEE Standard 1220–2005 The hardest single part of building a system is deciding what to build … ... No other part of the work so cripples the resulting system if done wrong. No other part is more difficult to rectify later. – Fred Brooks “No Silver Bullet,” 1987Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 13/26

 Build a time–phased network of activities describing the work to be performed, the budgeted Establish cost for this work, the organizational elements that produce the outcomes from this work, and Performance Measurement the Performance measures showing this work is proceeding according to plan. Baseline A Baselined Schedule that Produces the Products or Services that Meet The Requirements 3.1 Decompose Decompose the outcomes into a product based Work Breakdown Structure (WBS), then Scope into Work further into Work Packages that produce these outcomes all traceable to the requirements, Packages and to the needed capabilities. 3.2 Assign responsibility to Work Packages (the groupings of outcomes) to a named owner, Assign Responsibility accountable for the management of the resource allocations, cost and schedule baseline, for outcomes and technical delivery of all element in the Work Breakdown Structure. 3.3 Arrange Arrange the Work Packages in a logical network with defined outcomes, milestones, Work Packages internal and external dependencies, with credible schedule, cost, and technical in Logical Order Performance margins. 3.4 Develop Develop the Time–Phased Budgeted Cost for Work Scheduled (BCWS) for the labor and BCWS for Work material costs in each Work Package and the Project as a whole. Assure proper resource Packages allocations can be met and budget profiles match expectations of the project sponsor 3.5 Assign WP Measures of Assign objective Measures of Performance (MoP) and Measures of Effectiveness (MoE) for Performance each Work Package and summarize these for the Project as a whole. 3.6 Set Performance Establish a Performance Measurement Baseline (PMB) used to forecast the Work Measurement Package and Project ongoing and completion cost and schedule Performance metrics. BaselinePerformance Based Management(sm), Copyright ® Glen B. Alleman, 2012 14/26

 What Does a Credible Plan and Schedule Look Like?  The Plan is the strategy to successfully complete the project, described through Significant Accomplishments and their Accomplishment Criteria.  The Schedule is the sequence of the work activities measured by the Accomplishment Criteria, that follow the Plan of the Significant Accomplishments.  A credible Plan and Schedule means there is a statistical model of cost, schedule, and technical Performance of outcomes as the foundation of the credibility of the project’s probability of success.Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 15/26

Execute the planned work, assuring all work is 100% complete before proceeding to the  Execute next planned work package. No rework, no forward transfer of activities or features. the Performance Assure every requirement is traceable to work and all work is traceable to requirements. Measurement Baseline How long are you willing to wait before you find out you’re late? 4.1 Perform  Using the Work Package sequencing, release work to be performed as planned. the Authorized  With the responsibility assignments, identify the accountable delivery manager to guide the Work development of the products or services for each Work Package. 4.2 Accumulate  Using Physical Percent Complete or Apportioned Milestones, capture measures of and Report Work progress to plan for each Work Package. Package  Report this Physical Percent Complete in a centralized database for each Work Package Performance and the project as a whole. 4.3  Compare the Physical Percent Complete against the Planned Percent Complete for each Analyze period of performance. Work Package Performance  Construct cost and schedule Performance indices from this information and the Physical Percent complete measures. 4.4 Take  With Cost and Schedule Performance indices, construct a forecast of future Corrective Performance of cost, schedule, and technical Performance compliance. Management Action  Take management actions for any Work Packages not performing as planned. 4.5  Record past Performance based on Work Package completion criteria. Maintain  Record past future forecast Performance estimates in a historical database. the Performance Baseline  Forecast next future Performance estimate against the Performance Measurement Baseline.  Report this next future Performance estimate to the project stakeholders.Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 16/26

 How Do We Know We Are Achieving Our Planned Progress?  The Only measure of progress is the assessment of physical percent complete.  This measurement Must be in units meaningful to the customer.  These units can be:  Planned capabilities,  Planned capacities,  Planned features and functions,  Planned quantities.  Done is evidenced by the production of outcomes, on the planned date, for the planned cost, with the planned technical performance.Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 17/26

Continuous Risk Management starts the underlying principles, concepts, and functions of  Apply risk management and provides guidance on how to implement risk management as a Continuous Risk continuous practice in projects and the organizations that management projects. Management at Every Step What are the impediments to success and what are their mitigations? 5.1  Identify and classify risks in a Risk Register. Identify Risks  Manage this Risk Register through a Risk Management Board.  Connect these risks and their handling in the Master Schedule. 5.2  Convert risk data into risk decision‒making information. Analyze Risks  Use this analysis information as the decision basis for the project manager to work on the “right” risks. 5.3  Turn risk information into decisions and actions (both present and future). Plan Risk  Develop actions to address individual risks, prioritize risk actions, and create an integrated Response risk management plan. 5.4 Track the  Monitor the status of risks and actions taken to ameliorate risks. Risk  Identify and monitor risks to enable the evaluation of the status of risks themselves and Management Activities of risk mitigation plans. 5.5  Risk communication lies at the center of the model to emphasize both its pervasiveness and Control or Accept the Risks its criticality.  Without effective communication, no risk management approach can be viable.Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 18/26

 Continuous Risk Management† For Each Risk… Subproject and partner data/constraints, hazard Identify Statement of risk analysis, FMEA, FTA, etc. Identify Risks, Issues, and Risk data: test data, Concerns expert opinion, hazard Risk classification, Likelihood analysis, FMEA, FTA, Analyze Consequence, Timeframe lessons learned, Risk prioritization technical analysis Evaluate, classify, and prioritize risks Research, Watch (tracking Resources requirements) Replan Mitigation Plan Acceptance Rationale, Decide what should be done Mitigation Plans about each risk Risk status reports on: Program/project data (metrics information) Tr a c k Risks Risk Mitigation Plans Monitor risk metrics and verify/validate mitigations Close or Accept Risks Control Invoke contingency plans Continue to track Make risk decisions† Continuous Risk Management, Audrey J. Dorofee, Software Engineering Institute, Carnegie Mellon University, 1996 19/26

How is Performance Based Management different from traditional approaches to project management?  All work activities are traceable to and from the needed business or mission capabilities†.  All activities are focused on Outcomes rather than Output.  Performance is measured in Physical Percent Complete, not the consumption of resources and the passage of time.  All planning and measurement is risk adjusted.  Performance Based Management never confuses effort with results – the customer only bought results. † A Metric Framework for Capability Definition, Engineering and Management, Seventeenth Annual International Symposium of the International Council On Systems Engineering (INCOSE) 24 - 28 July 2007Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 20/26

How is Performance Based Management the same as traditional approaches to project management?  Founding principles based on US DoD program management processes, PMBOK®, and Agile project management methods.  Planning assures incremental progress measured in units meaningful to the buyer.  All project participants integrated with each activity providing full visibility into progress to plan.  Continuous risk management embedded in each detailed process step.Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012 21/26

1. Identify Needed Systems Capabilities – Define the Measures of Effectiveness (MoE) D E F I N E O PE R A T IONA L C O N C E PTS T H R O U GH S C EN ARIOS O R U S E C A S E S Partition system capabilities into classes of service within operational scenarios Connect capabilities to system requirements using sysML Define Measures of Effectiveness (MoE) for these capabilities in units meaningful to the customer Define in the master schedule the achievement of measure of Technical Performance D E F I N E C A P A B I L I TIES N E EDED T O I M P L EMENT T H E O P E RATION AL C O N C E P TS Define scenarios for each system capability Connect these scenarios to the Value Stream map Assess value flow through the map for each needed capability Identify capability mismatches and make corrections to improve overall value flow A S S E SS N E EDS , C O S T , A N D R I S K S I M U L TANEOUSLY Assign costs to each system element using a value process model Assure risk, probabilistic cost and benefit performance attributes are defined Use cost, schedule, and technical performance probabilistic models to forecast potential risks to program performance D E F I N E E X P L I C I T , B A L A N CED , A N D F E A S IBLE A L T E RN ATIVES Make tradeoffs that connect cost, schedule, and technical performance in a single “trade space” model Measures of Effectiveness and Measures of Performance are the raw materials for these tradeoffs2. Establish Requirements Baseline – D EFINE M E ASURES O F P ERFORMANC E (M O P) P E R FORM F A C T F I N D I N G Produce an overall statement of the problem in the operational context Develop the overall operational and technical; objectives of the target system through Measures of Performance (MoP) for the requirements Define the boundaries and interfaces of the target system G A T H E R A N D C L A S S IFY THE R EQUI REMENTS Gather required operational capabilities, functional, nonfunctional, and environment requirements and design constraints Build a Top Down Capabilities and Functional decomposition of the requirements in a flow down tree using a requirements tool E V A L U A TE A ND R A T I ONALI ZE T H E R E Q UI REMENTS Answer the question “why do we need this?” in terms of operational benefits Build a cost / benefit model using probabilistic assessments of all variables and dependencies For technical requirements, perform a risk assessment to the cost and schedule P R I O RITIZE T H E R E Q U IREMEN TS Determine the criticality for the functions for the system’s mission Determine tradeoff relations for all requirements to be used when option decision are made For technical items, prioritize the cost and dependencies I N T E G R ATE A N D V A L I D ATE T H E R E Q U IREMEN TS Address completeness of requirements by removing all TBD items Validate the requirements agree and are traceable to capabilities, goals, and the mission Resolve any requirement inconsistencies and conflicts 22 Performance Base Management (sm) Chapter I

3. E STABLISH P ERFORMANCE M EASUREMENT B ASELINE – D EFINE T ECHNICAL P ERFORMANCE M EASURES (TPM) D E C O M POSE R E Q U IREMENTS I N T O W ORK P A CKA GES A N D P L A N N IN G P A C K A G ES Decompose the program scope into a product based Work Breakdown Structure (WBS) Decompose the WBS into Work Packages describing the production of all outcomes and processes traceable to the requirements A S S I G N A C C O U NTA BILITY F O R T H E O U T C OME F R OM E A C H W O R K P A C K A G E Assign accountability for Work Packages to a named owner for the management of resource allocation, cost baseline, and technical delivery ARRANGE WORK PACKAGES IN A LOGICAL ORDER Arrange Work Packages in a network with defined outcomes, milestones, internal and external dependencies, appropriate schedule and cost margin D E V E L OP T H E B U D G ETED C O ST F O R W O R K S C H E D ULED (BCWS) F O R E A C H W O R K P A C K A G E A N D P L A N N ING P A C K A GE Develop a time‒phased Budgeted Cost for Work Scheduled (BCWS) for labor and material costs in each Work Package Develop a time‒phased Budgeted Cost for Work Scheduled (BCWS) for the program as a whole Assure proper resource allocations can be met and budget profiles match expectations of the program sponsor A S S I G N W O R K P A C K A G E M E A S U RES O F P E R F ORMA NCE (M O P), K E Y P E R FORMAN CE P A R A METERS (KPP), A N D T E C H N I CAL P E R F ORMA NCE M E A S U RES (TPM) Assign an objective Measure of Performance (MoP) for each critical Work Package outcomes Trace critical outcomes to the Measure of Effectiveness (MoE) defined in the Capabilities baseline Summarize these Measures of Performance (MoP) and Measures of Effectiveness (MoE) for the program as a whole Assign measures of Physical Percent Complete for each Work Package Assign measures of Physical Percent Complete for the program as a whole S E T T H E P ERFORMA NCE M E A S U REMENT B A S E LINE (PMB) Establish a Performance Measurement Baseline (PMB) used to forecast Work Package and Project ongoing and completion cost and schedule metrics4. Execute the Performance Measurement Baseline (PMB) – Maintain Cost, Schedule, and Technical Performance PER FORM A U T H ORI ZED W O R K I N T H E P L A N N ED S E Q U ENCE Using the Work Package sequencing, release work to be performed as planned With the RACI based RAM, the Accountable delivery manager guides the development of the products or service for each Work Package A C C U M ULATE A N D R E P O RT W ORK P A CKA GE P H Y S I CAL P E R FORMAN CE Using Physical Percent complete or Apportioned Milestones, capture the measures of “progress to plan” for each Work Package Report the Physical Percent Complete in a centralized system for each Work Package and he program as a whole A N A L Y ZE W O R K P A C K A G E P E R FORMAN CE Compare the Actual Percent Complete against the Planned Percent Complete for each period of performance Construct cost and schedule performance indices from this information and the Physical Percent Complete measures T A K E C O R R E CTIV E M A N A G E MEN T A C T I ON FOR A N Y V A R I A NCE I N W O R K P A C K A GE P E R FORMAN CE With the cost and schedule performance indices, construct a forecast of future performance of cost, schedule, and technical performance compliance Take management actions for any Work Packages not performing as planned M A I N T A IN P ERFORMANCE M E ASU REMENT B A S E LINE ’ S I N T E G R ITY Record past performance based on Work Package completion criteria Record previous future performance estimates in a historical database Forecast future performance against the Performance Measurement Baseline Report the future performance estimate to the program stakeholders 23 Performance Base Management (sm) Chapter I

Performance Based Management Puts You On the Road to Success … What does done look like? How do we get there? Are there enough resources? What are impediments to progress? How do we measure progress?Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012

5 Practices Needed the Implement the 5 Immutable Principles Identify Capabilities with measurement units meaningful to the customer Identify Technical and Operational Requirements to deliver capabilities Establish risk adjusted Technical, Cost, and Schedule Baseline(s) Execute PMB with measurement units meaningful to the decision makers Apply Continuous Risk Management25 Performance Based Management(sm), Copyright ® Glen B. Alleman, 2012

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Performance based planning in a nut shell (V5)

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