Practical Strategies for Project Recovery Webinar Slides

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Organizations spend a lot of money on projects. In the last year alone, the average firm closed US$200 million in projects, according to a just-released study conducted by PM Solutions Research. And more than a third of those projects were troubled. That means US$74 million of those projects were at risk of failure. The good news is that project recoveries are common and firms that proactively undertake successful project recoveries report saving US$50 million on average per firm. Learn what other organizations are doing to recover troubled projects and the significant business results they have been able to realize.

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Practical Strategies for Project Recovery Webinar Slides

  1. 1. Practical Strategies for Project Recovery J. Kent Crawford, PMP, PMI Fellow Originally Presented via Webinar on March 24, 2011slide 1 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  2. 2. Agenda  Troubled Projects Defined  What’s at Stake  Root Causes of Troubled Projects  Top Recovery Actions  Case Studies  The Positive Influence of Processes  The Importance of the Project Managerslide 2 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  3. 3. Troubled Projects Defined It is unrealistic to have one all encompassing definition of a troubled project because there are many variables. It is better to look for indicators that suggest you are there, such as:  No one really knows when the project will finish and many have stopped guessing  Management cannot control the project or assess current status accurately  Failure to meet key milestones  Team is working significant extra hours and team morale is low  High risk of not delivering anticipated benefits  Resources are not committed or allocated  Mounting unresolved technical issues  Excessive number of risk events and/or change requestsslide 3 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  4. 4. What’s at Stake Dollars at Risk in the Average Organization: $74 million (Based on 20,821 projects closed in the last 12 months by 134 organizations)  Average number of projects closed per firm……………………….155  Average total cost of closed projects per firm………................$200M  Average Cost per project………………………………………….$1.3M  Percentage of projects at risk (recovered 25% or failed 12%) ……….…...37% Source: Strategies for Project Recovery, PM Solutions’ Research, 2011slide 4 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  5. 5. Poll Question What do you think is the Pick list: main cause of troubled  Planning projects in your  Resources organization?  Requirements  Risks  Schedules  Otherslide 5 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  6. 6. Top 5 Causes of Troubled Projects Source: Strategies for Project Recovery, PM Solutions’ Research, 2011slide 6 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  7. 7. Top 5 Actions Taken to Recover Projects 1 Improve Communication 2 Redefine the Project 3 Add and/or Remove Resources 4 Resolve Problematic Technical Issues 5 Replace the Project Manager Source: Strategies for Project Recovery, PM Solutions’ Research, 2011slide 7 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  8. 8. 1. Improve Communication / Stakeholder Mgmt.  Identify stakeholders  Plan communications - stakeholder analysis  Distribute information - needs and resources  Manage stakeholder expectations  Report performance Create and support open communication as the knowledge begins to transfer creative solutions will emerge that help speed recovery Source: PMBOK Guide, 4th Edition, PMI, 2008slide 8 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  9. 9. Case Study Actions Taken: A public engagement process was developed; meetings were held with stakeholders to explain the need, address issues, and build support; realistic cost estimates and schedules were developed. VELCO was required to provide a redundant electrical Result feed into the area to The project was completed on time and $6 meet regional million under budget. At the same time, reliability criteria. customer satisfaction scores increased by However, the project 20%. The project was granted a board faced public and certificate to proceed six months earlier than legislative pressures. previous large transmission projects — an exponential savings of time and money for VELCO.slide 9 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  10. 10. 2. Redefine the Project  Ensure that all stakeholders understand and follow procedures  Establish predefined authority and approval points  Involve the appropriate people in decisions  Evaluate scope, cost/resources, schedule, and risk  Define and communicate the change to project stakeholders  Document and track the changeslide 10 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  11. 11. Case Study Actions Taken: An outside team was assembled to apply Food and beverage more rigorous program controls relative to manufacturer, R&D scheduling, cost estimating, resource division projections, vendor management, and progress reporting. The company had less than two years to Result reformulate, test, produce, and The program was completed six months distribute over 450 of ahead of schedule and $2 million under its products in order to budget. A structured program process was meet deadlines for introduced and implemented, the team was regulatory compliance. willing to challenge the status quo to simplify the reformulation process, and clear accountability ensured work was being completed as planned.slide 11 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  12. 12. 3. Add or Remove Resources Successful recovery projects often hinge on key resources  Resources contribute to the problem as well as the recovery  Plan carefully for any changes in personnel  Resource staffing requires a close examination of key resources  Establish an effective resource on-boarding and off-boarding  A key external resource can be more efficient to rapidly recover the projectslide 12 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  13. 13. Case Study Actions Taken: Global manufacturer Skilled resources were added to lead the of automotive project. Client/vendor requirements, components milestones, resource projections, estimates, and delivery targets were all reset. A major HR Transformation Result Program with 15 All 15 projects within the program were discreet projects completed on schedule and on budget, with made little progress no service disruptions. Within seven months in 8 months, and had of program completion HR expenses were just 4 more months reduced from US $20 million to $6.8 million to right-source key per year, and is targeted for a $5 million per HR functions. year run rate.slide 13 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  14. 14. 4. Resolve Problematic Technical Issues  Partner closely with the “owner” of the technical system  Study the technical issue to understand it’s full range of effect. A normal technical solution spans functions, geographies, etc.  In recovery, the goal should be to fail early….  Vendor resources can add real technical value  Leverage vendor technical expertise early in the assessment and recovery effort  Understand customer needs in order to frame acceptable alternative solutionsslide 14 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  15. 15. 5. Replace the Project Manager  Successful Recovery Project Managers demonstrate a specialized skill set: – Knowledge of recovery techniques – Capability to be frank and honest about critical issues, urgency, change, etc. – Decisive – Proactive – Political awareness and ability to navigate strong politics – An understanding of the organizational culture  If possible, consider a Project Manager skilled in project recovery to partner with the current PMslide 15 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  16. 16. Case Study Manufacturer of Actions Taken: nutritional products Outside help was brought in to review the program, re-plan all projects, and assume A company divestiture control of program operations. called for an unmovable deadline to convert Result legacy IT systems All individual projects within the program within sales, marketing, were delivered on time and were ready for and manufacturing integration with the enterprise ERP system. systems. Little progress The program turnaround quickly saved an was made in the first 4 estimated US $2 million in system support months and the fees by moving applications in-house. program was in peril.slide 16 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  17. 17. The Importance of the Project Manager Indicators of an effective recovery PM  Stakeholders fare well informed and satisfied.  Stakeholders trust the PM  The project team is performing at a high level  Project milestones are achieved on time  The PM “owns” the project and accept responsibility for its status, results, and delivery Source: Strategies for Project Recovery, PM Solutions’ Research, 2011slide 17 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  18. 18. The Positive Influence of Process The benefit of having a standardized project management process cannot be overstated. There is a high correlation between lack of a process and project failure. Some key data;  Almost a quarter (22%) of firms surveyed did not have a standard methodology for managing projects  Firms without a methodology saw a higher percentage of project failures than those with (21% vs. 9%)  Firms with a troubled project recovery process (68% of firms surveyed) had 3x fewer project failures as those that did not have one Source: Strategies for Project Recovery, PM Solutions’ Research, 2011slide 18 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)
  19. 19. Thank You! J. Kent Crawford, PMP kcrawford@pmsolutions.comslide 19 | confidential and proprietary information | © 2011 Project Management Solutions, Inc. (www.pmsolutions.com)

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