DPPM2

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DPPM2

  1. 1. Project Management National Conference 2011 PMI India KPI Governance in a Program – Can Top Down Alignment add value? Ravi Agarwal Group Project Manager, Infosys Ltd.2|P a g e Application of Select Tools of Psychology for Effective Project Management
  2. 2. Project Management National Conference 2011 PMI India Contents 1 Abstract..............................................................................................................................4 2 Keywords ..........................................................................................................................4 3 Drivers for KPI driven Program Governance....................................................................4 4 Role of KPIs in Program Governance................................................................................6 5 Figuring the KPI process....................................................................................................7 6 KPI Value Add.................................................................................................................11 7 What could go wrong and how to avoid it.......................................................................12 7.1 Can KPIs work in Isolation?.........................................................................................13 8 Why Top Down alignment driven approach is successful...............................................14 9 Conclusion........................................................................................................................14 10 Glossary..........................................................................................................................14 11 References......................................................................................................................15 12 Author’s Biography........................................................................................................153|P a g e Application of Select Tools of Psychology for Effective Project Management
  3. 3. 1 AbstractGovernance and measurement and tracking of KPIs are always consideredcritical for the success of a Program. Needs of various stakeholders vary as eachstakeholder has a different KPI for themselves. KPI Governance includes KPIDefinition, KPI Formation, KPI Tracking and Monitoring and KPI Reporting.Amalgamate them with the principles of continuous improvement and chances ofthe program being more successful increases.KPIs begin at the top of the organization and then typically flow down. Enroutemore KPIs get added/modified to suit the program/portfolio/projects objectives. Atop down alignment will help configure the optimal charter for the KPIs. Also theywill have a better buy in from stakeholders, both internal and external andultimately it shall be a win win for all.The paper fundamentally tries to address the following aspects. 1. Role of KPIs in Program Governance 2. Four Step KPI Process 3. Top Down Alignment of the KPIs 4. KPI Value AddThe paper takes a step to present these thoughts in the practical context. Alongwith relevant case studies, the paper also details the practical implementation ofsuch KPI governance.2 KeywordsGovernance, KPI, Top down Alignment, Value Add, Program, ProgramManagement3 Drivers for KPI driven Program GovernanceMulti projects combine together to form a program. More than ever before, thereis a need to execute planned programs successfully for the benefit of thestakeholders. Aspects like Balanced Scorecard and Dashboards have long madewaves across the spectrum of the corporate organizations. KPIs have been animportant aspect for measuring the success of any particular program or projector portfolio.
  4. 4. A KPI is simply a metric that is tied to a target. Most often a KPI represents howfar a metric is above or below a pre-determined target. KPI’s usually are shownas a ratio of actual to target and are designed to instantly let a business userknow if they are on or off their plan without the end user having to consciouslyfocus on the metrics being represented.[6]The size and complexity of programs are changing and increasing. More andmore stakeholders need a better value for money. With time being a limitedcommodity it is very essential to ensure that programs are on schedule, withinbudget and provide the value that the stakeholders started with. While eachproject in a given program may have a different KPI given the context, one of theaspects that is worth considering is – whether it is ok to have different KPIs at aproject and a program level vs. what the organization – client or internal areaiming for as a corporate strategy.There could be multiple sets of KPIs that can be measured and tracked acrossvaried dimensions of the program. What would be the key drivers for ProgramGovernance that not only ensure a smooth completion of the Program but at thesame time ensures the right business value that the program is supposed todeliver without compromising on any of the contractual needs?The answer lies in the top down alignment approach. The other important aspectto consider is to be able to articulate this top down alignment in the right form ofvalue getting generated at the top and all the layers beneath to retain theessence of a successful program. At the same time the theory of SMART goalsalso applies to KPIs.This makes defining of the KPIs and aligning them to the larger context an artrather than mere science. The key drivers for KPI driven Program Governancewould be:Stakeholder contextStakeholder context is the primary needs for KPI driven program governance.The stakeholder here would ideally be the client or the organization at the rootlevel. In other cases this could be the program manager and the team runningthe program. For each of the stakeholder a structured approach of KPIimplementation is a must.Business value needs from the program
  5. 5. While many programs are run today, there is a single reason for them to exist.That single reason is Business Value. Since the planning and execution of aprogram involves both time and effort, returns are a significant driver for thesuccess of the program. These returns could either be monetary or related tolegal compliance or social endeavours but each program does definitely need tocreate some value.Need for measurement of the program journeyCan a program run successfully without a KPI based approach? Probably yes,but you will still need to measure the progress, especially in the context of largeprograms – merely because the cost of failure in such cases is pretty high andone does not wants to fail.In some programs there is a top down alignment, whereas in other cases it couldbe a straight forward implementation only at the program level.The subsequent sections discuss the value that a top down alignment will bringto the program.4 Role of KPIs in Program GovernanceImagine one program spending most of their time in ensuring the highest qualitywith no regards to schedule adherence. On the other hand there is a programwith complete focus on schedule adherence but the budgets going haywire.Here comes the power of top down alignment of KPIs.Top-down goal alignment – a step-by-step methodology that progresses frominitial ideas to permeate throughout all levels of the business, eventuallybecoming the many day-to-day tactical activities that together move theorganization forward toward achieving the ultimate goal [4].Goals provide the focus and energy for organizations to achieve their vision andstrategy, but without GOAL ALIGNMENT, employees and departments aredisconnected from it, and corporate goals—as a consequence—cannot be fullyrealized [5].Performance Indicator or Key Performance Indicator (KPI) is anindustry jargon term for a type of Measure of Performance. KPIs are commonlyused by an organization to evaluate its success or the success of a particularactivity in which it is engaged [3].At a program level, KPIs are demonstrated to include the details for thestakeholders and the clients. KPIs at a program level evolve around four keyfocus areas.
  6. 6. • Delivery o Includes aspects like Quality, Productivity, Schedule Adherence, Budgeting, Finance, Delivered Defects, Knowledge Management• Client o Contractual compliance, SLAs, Schedule, Budget, Business Value, CSR• People o Skill needs and availability, Rate of attrition, Team motivation• Operations o Optimal process, Timesheets, Tools, Reporting needs Figure 1 Adding Value through Top Down Alignment5 Figuring the KPI processThere are two primary components of a program and four important steps to thetop down KPI process: a. The Client Context b. The Organizational Context
  7. 7. Figure 2 The 3 Step KPI ProcessThe Client Context: When a client runs any program, the client has alreadysponsored the program based on their business strategy. In such scenarios, thesuccessful running of the program becomes one of the key KPIs for the clientteam. Therein the strategies that the client can/would adopt are : 1. Decision to run a program in-house or to outsource the program 2. Duration of the program 3. Budget and business value to be derived 4. Legal compliance 5. CSR requirementsOn the clients dashboard – Successful running of the program A could be justone KPI of their strategy.The organizational context: The other component is the organizationalcomponent, here the goal alignment has a different dimension and readinessneeds.Here the program has to look at the following aspects:1. Strategize:
  8. 8. a. Organizational KPIs to be considered i. Right profitability ii. Right quality iii. Right budget and schedule iv. Risk and associated mitigation v. Corporate Social Responsibility b. Client KPIs to be considered i. Business Value Delivered ii. Time to Market the Program iii. Contractual RequirementsWhen the program commences, the KPI strategy of the program should keep inmind these two components. Sub-KPIs which can be easily tracked at theprogram and project level and ultimately leading to the strategic goals need to bederived .The Organizational context: The other component is the organizationalcomponent, here the goal alignment has a different dimension and readinessneeds. Figure 3 Top-Down KPI Mapping
  9. 9. Note that of the sum total of 5 different summary organizational goals,3 differentclient summary goals and expected program specific goals, the mapping hasactually narrowed to 7 different goals at the program level without losing theessence of either the organizational goals, the client goals or the program needs.Also, realize the one-one mapping of the program goals to those of the client andthe organization. 2. Evangelize:The next crucial step for successful governance of the program is to evangelizethe strategy linkage. This could be through various forms of communication,team meetings, stakeholder expectation setting. The following advantage can beimmediately sought at.Each stakeholder entity (Organizational Senior Management, Client, Programteams) are interested to see the progress of their respective KPIs. At the sametime, everyone has the high level view and the detailed view at the same time.Note that: The program level goals can be modified based on the stakeholderconsensus at any point in time.All the three entities are now working on a similar goal and a similar focus andyet working independently. 3. Methodize:This is the most crucial step in terms of defining the metrics and determining themethod of measurement. At the same time, the program team also need todetermine the crucial measurement adoption between the goals of various levels.
  10. 10. For one of the large US based clients, we had a discussion with the client and directly took up the goals which were the client KPIs. There were multiple benefits out of this:Structured Mapping of the KPIs Figure 4 1. Our success was the clients successMapping each of the program level goals to the client goals and in turn mapping 2. It was a joint partnership to achieve the desired KPIs so the clientthem to was organizational goals. As part of methodizing the approach it is the equally happyequally important to clearly able to see the value that Infosys could bring in and 3. Client was identify the right tools and techniques for measurement during the course of the journeyanalysis of the KPIs. 4. Analyze:Use an upward summary dashboard for reporting and analyzing. Like ahierarchical tree structure, it will not only save time but also ensure that the rightdata elements can be given the right focus. This will also result in optimalreporting. Use limited number of effective tools in the context of yourorganization.6 KPI Value Add Exhibit 1 Top Down Alignment at a Program Level (Source: Infosys Experience) The resultant was a delighted client giving Infosys repeat business over the last couple of Years. It also resulted in a sense of pride and accomplishment within the teams towards achieving the details. At the client end, the client was able to leverage the team’s contributions for their own stakeholder management and articulating to them the benefits of running and continuing with the program.
  11. 11. 7 What could go wrong and how to avoid it• Additional KPIs mid-way of the program o Be ready to address this need of the program. Infact even though it may seem an additional overhead this is critical for the success of the program. Do however; try to limit the number of KPIs that are being addressed at any point of the program. If you are adding additional KPIs check if some existing KPIs can be eliminated in discussion with the various stakeholders• Addition of new stakeholders
  12. 12. o One of the most crucial aspects which could be a differentiating factor between the success and failure of a program is the addition or movement of a stakeholder. It is a practical reality though for large programs which have long schedules. o Definitely look at meeting the stakeholders, explaining them the approach, understanding their expectations and then taking remedial action to modify the KPI structure and the mapping alignment to meet the needs of the new stakeholders. Note also that because this implies changes for the existing stakeholders as well, keep them in the loop of communication for the changes as well.• Unavailability of structured tracking mechanisms o Any data for KPI measurement should come in through reliable methods and those methods along-with the relevant tools should be acceptable to all. Not only this gives confidence to the program manager and the team of the authenticity of the data, it also reduces the human dependency. o If no structured mechanism exists, clearly define the measurement and tracking approach and share the details with all the folks working on the program and the external stakeholders as well. This will eliminate any last minute surprises and can result in a possible success of the program.7.1Can KPIs work in Isolation?The answer is an obvious big No. There are multiple additional support factorswhich are important to bring about a successful implementation of a program.1. Organizational Support The organizational mandate and support is extremely critical for the success of a top down KPI alignment approach and its effective implementation. A program cannot work in isolation without the support from senior management.2. Team Buy In It is extremely crucial to be able to carry the team along in terms of buy-in. The concept needs to be explained and once the team knows that a small KPI at the program and project level has a direct linkage to the client and organizational KPIs, there will be a better and improved team motivation to be a part of a successful program.
  13. 13. 8 Why Top Down alignment driven approach issuccessful• Ability to Leverage organizational best practices.• Optimal and limited number of systems to manage and track the KPIs• Success of the program is success of the client and of the organization• Each value item can be extrapolated and waste is eliminated• Immediate cascading success (and in case of failures, immediate focus at the right time)• Tends towards team work rather than towards individual contributions9 ConclusionThere will be a bigger and continuous emphasis on KPI governance as it tendstowards the objectivity of success. A top down alignment not only provides theright environment for the program to flourish, it also creates a win-win situationfor all stakeholders and hence is the most optimal approach of KPI Governancein a program. At the same instance it eliminates redundancy and ensures theright focus across the implementations. Best practices therein can be leveragedeffectively.This top down alignment brings in a lot of qualitative and quantitative value to theprogram. The future is towards a meaningful top down alignment of KPIs as thatis the primary way of articulating value for the organization, for the client and forthe program and their people.10 Glossary C-KPI…. Client KPI CSR Corporate Social Responsibility KPI Key Performance Indicator O-KPI… Organizational KPI P-KPI… Program KPI SLA Service Level Agreement Specific, Measurable, Attainable, Realistic and SMART Timely
  14. 14. 11 References[1] Project Experiences at Infosys[2] Infosys Sources (http://www.infosys.com)[3] http://en.wikipedia.org/wiki/Performance_indicator[4] http://www.imakenews.com/cepworldwide/e_article001026029.cfm?x=b11,0,w[5] http://www.appraisal-smart.com/goal-management-software-system.htm[6] http://www.dashboardinsight.com/articles/digital- dashboards/fundamentals/key-performance-indicators-and-metrics-- choosing-the-right-data-to-display.aspx12 Author’s BiographyRavi Agarwal has earned his Bachelor’s in Mechanical Engineering fromRegional Engineering College, Surat and is a certified PMP. He has a richcorporate experience of more than a decade in the field of leading andmanaging software projects and providing consulting for key clients inleading software companies. He has to his credit more than 12 thoughtpapers selected or presented in national and international conferences onProject Management and Domain areas including a research paper onComponent Based Project Management. Ravi is also an active member
  15. 15. of the Infosys Campus Connect Team which focuses on Taking theLearning to the Colleges. He is a certified Internal Quality Auditor. Ravi iscurrently working as a Group Project Manager with Infosys Limited, Puneand managing a large account for a European client in theTelecommunications space.ravi_agarwal@infosys.com

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