1 Page
A New Dimension in Project Management -The "Value" DiamondMuktha Kartik – Consultant, Mahindra SatyamDeborah Devadason – C...
Contents 1. Abstract ........................................................................................................
1. Abstract         stIn the 21 century, Customer-centric Project Management will outpace the triple constraints of cost,s...
3. Key triggers for innovationBeing the Best is Not Good EnoughIn the 21st century, business demands are changing by the m...
need to be trained to ingrain Business Value in the project lifecycle and their success measured bythe Business Value they...
requirements should be evolved from these customer requirements and the success of the DARTmethodology will depend on how ...
chosen for a future phase. The target values are also set for the selected darts and a “Value Register”is created which wi...
Figure 4 : Realise Business ValueBusiness value dimension measures both tangible and intangible benefits. (Aaron J Shenhar...
#    Taxonomy       Type          Value Dart           Target   Milestone         Milestone      Actual                   ...
6. Key Challenges During ImplementationThe key challenges faced during implementation for the DART methodology are:       ...
8. Case Study Background: A Consulting Practice with a global client base and providing customised consulting solutions fo...
9. Lessons Learnt        A Business Value Management knowledge area needs to be added to the PMBOK        knowledge area l...
11. Bibliography   1. Aaron J Shenhar, Ofer Levy. “Mapping the Dimensions of Project Success.” Project      Management Jou...
12. Author’s Profile:                            Muktha Kartik, Process Consultant of Business Value                      ...
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  1. 1. 1 Page
  2. 2. A New Dimension in Project Management -The "Value" DiamondMuktha Kartik – Consultant, Mahindra SatyamDeborah Devadason – Consultant, Mahindra Satyam
  3. 3. Contents 1. Abstract ......................................................................................................................................... 4 2. Background ................................................................................................................................... 4 3. Key triggers for innovation .......................................................................................................... 5 4. Our approach ................................................................................................................................ 6 5. Critical Success Factors ........................................................................................................... 10 6. Key Challenges During Implementation ................................................................................. 11 7. Quantified Benefits To Business ............................................................................................. 11 8. Case Study ................................................................................................................................. 12 9. Lessons Learnt ........................................................................................................................... 13 10. Conclusion ................................................................................................................................ 13 11. Bibliography .............................................................................................................................. 14 12. Author’s Profile: ........................................................................................................................ 15 13. Special Acknowledgement ..................................................................................................... 153 Page
  4. 4. 1. Abstract stIn the 21 century, Customer-centric Project Management will outpace the triple constraints of cost,scope and schedule and true success will be determined by the Business Value generated by theproject.This paper explores an avant-garde approach to include a fourth dimension of “Business Value” tocreate the Project Management Diamond. The focus of the approach is customer delight whilefocusing on generating business value and this transformation will be a competitive advantage in the st21 century. The paper discusses innovative techniques to ingrain business value in all stages of theproject lifecycle and the breakthrough concept of “Value Management”. Real case exampleshighlighting the implementation aspects from a Consulting Team, with a varied and global client basecutting across multiple domains, which has resulted in multi Million value generation, add substanceto the paper. The paper shares simple powerful tools like Value Register which aid the computationof true business value for all types of projects, taking into consideration a variety of aspects rangingfrom knowledge enhancement to branding and shareholder value. The authors explore the re-evaluation of the Project Management processes and procedures as well as the role of the newManager in instilling this new dimension.The authors demonstrate how this “Value” Diamond Transformation marks a new era in ProjectManagement and how it can be easily adopted by any organisation irrespective of the size, domainand culture.2. BackgroundTraditional Project Management has relied on the triple constraints of cost, scope and schedule tomeasure success (Appelo). Project Managers have balanced these parameters against each other tosteer the project to success. This concept of Iron Triangle has evolved over the years (Zwikael andSmyrk) and the focus on customer delight has increased. However, futuristic Project Managementshould aim to achieve business success and this is possible only though a value proposition for allstakeholders. The right project selection is highly critical when running large programs and projects.It is imperative that the selected projects create the most compelling value to excite the endcustomers and provide the right value for the investments organisations make. While the primaryfocus is on customer value, long term value creation for the business organisation and society shouldbe given importance. The triple constraints thus expand to include a fourth dimension of BusinessValue to form the Project Management Diamond. The investment in this dimension will ensure ahandsome return for the organisation in the long run.Just as an athlete cannot make it to the Olympics without extraordinary physical ability, a goodManager must master the four dimensions of Project Management to be successful. (Gerstenmaier)4 Page
  5. 5. 3. Key triggers for innovationBeing the Best is Not Good EnoughIn the 21st century, business demands are changing by the minute. This rapid change in market placeis accompanied by customer demands that require a high level of customisation. One single strategydoes not guarantee success in all situations. A product or service may be the best and mostinnovative in the market; yet may not be valued by the customer. On the other hand, a project maybe successful even when violating the time and cost estimates so long as the customer judges it assuccessful against their criteria.Lagging Vs. Leading IndicatorsThe traditional Project Management dimensions concentrate on the outcomes of project activity andare lagging indicators of performance. The need of the hour is a better understanding of the drivers ofBusiness Value and a means to track measure and compare this across projects (Smith, Apfel andMitchell). These leading indicators should be the key to project selection and prioritisation and need tobe inbuilt into the Project Management principles.Alignment of Technical Capabilities to Business VisionTechnological advancements have made projects unique and project execution requires high levels ofinnovation and application of learning. Investments done in R&D and training for project purposesshould be evaluated for long term Business Value. Project Managers need to provide special focus onapplied learning and innovation which can be leveraged in future projects and thus provide the linkbetween technical capabilities and Business vision. (Liebowitz and Megbolugbe)Go GreenSustainability is central to the new age Business. Population explosion, plunder of natural resourcesand allied climate changes has put the planet at risk. All projects have a responsibility to addresssuch risks on environmental, socio-economic, ethical and health and safety concerns and need to beinbuilt into the value delivered by the project (Global Reporting Initiative). The ideal starting point isthe project which funnels into the Business level to make meaningful impact in the long run.Happiness IndexThe Harvard Business Review has quoted that happy employees are the key to happy customers(Gretchen and Christine). Employee Happiness Index is fast becoming the by-word in the newmillennium. Employee engagement and happiness should start at project level and value creationshould include this aspect. In the dynamic environment of changing nature of workforce, this area willdetermine futuristic success.Project Manager EvaluationWhen Project Management needs to expand to a futuristic dimension, the evaluation of projects andProject Managers also need to be aligned to this perspective. Projects fetching a higher BusinessValue proposition should be given weightage when evaluating for approval. Project Managers also5 Page
  6. 6. need to be trained to ingrain Business Value in the project lifecycle and their success measured bythe Business Value they can create.4. Our approachThe Value Management Methodology is an innovative approach that aims to maximise the valuedelivered by a project for the Customer, Organisation and the Society. The approach re-defines theProject Management process in ensuring a win-win situation for all the stakeholders. Themethodology has been named “DART”The DART methodology aims creation and measurement of business value through “Value Darts”which are quantitative indicators. The methodology provides the Project Manager with the freedom tocustomise the business value to be generated by the project through these darts and to create aproject specific “Value Register”. Value darts may be extrinsic (external to the organisation) orintrinsic (internal to the organisation). A good balance of extrinsic and intrinsic value darts is advisedwith prime focus on the customer. Project Management in this approach involves the definition ofparameters that will maximise the realisation of both extrinsic and intrinsic value from the project.Figure 1 : Value Management Methodology – DART1 - Define Customer Objectives:The DART methodology starts with the Initiation phase in the Project Lifecycle and is based on theprinciple that the ultimate goal of any project is the achievement of customer objectives. This is thefirst step where the customer business case is understood fully so that the right solution can beprovided. The project should focus on the maximisation of the value for the customer and this can beachieved through a thorough understanding of the strategic needs of the customer. The project6 Page
  7. 7. requirements should be evolved from these customer requirements and the success of the DARTmethodology will depend on how well this step is performed. The key is to articulate the objectives asoutcomes and finalise the baselined set in conjunction with the customer.In the context of this methodology, the term “Business Value” is further classified into two categories– Extrinsic and Intrinsic. Extrinsic value is the value generated for stakeholders outside theorganisation while intrinsic value will encompass within the purview of the project team andorganisation itself. (Lansford) Type Stakeholder Desired Value Extrinsic Customer Outcome/Needs Achievement Extrinsic Society Go Green/Corporate Conscience Intrinsic Organisation Downstream Revenue/Market Position/Employee EngagementFigure 2 : Value Concept Definition2 - Assign Target Value Darts:During Project Planning, the Project Manager chooses the optimal set of value darts for the projectensuring the right mix of extrinsic and intrinsic value. A set of generic value darts exist at theorganisation level from which the Project Manager can choose and customise as well as add a newset of darts (Carty and Lansford). Targets may be determined by the organisation baseline values forthe darts chosen or industry benchmark data. The value darts chosen should be determined by theproject type, size and the constraints. The efficiency of this step determines the quality of the DARTmethodology. Darts may be customised for a phase of the project and then revisited and a new set7 Page
  8. 8. chosen for a future phase. The target values are also set for the selected darts and a “Value Register”is created which will get updated with actual values during project execution.Taxonomy Value Dart Impact Faster Better CheaperEfficiency Cycle/Turnaround Time reduction X FTE (Full Time X Equivalent)Optimisation X Rework Reduction/AvoidanceEffectiveness Overrun Avoidance X Time to Market XCustomer Market Improved Customer/Market Base XValue (Brand Value) X Customer/Market loss Avoidance X Customer SatisfactionEmployee Value Employee Happiness Index XSocial Value Reduced energy/natural resource X X consumption X Diversity RatioInnovation & Addition to Reusable Knowledge XLearning Assets X Training/R&D ROI (Return on Investment)Figure 3 : Value Darts3 - Realise Value:The strategies to achieve forecasted dart values with action plans are created and owned by theProject Manager. Milestones/check points for review and tracking are also decided. Project executioninvolves implementing these strategies and providing dedicated focus to ensure value realisation. Thestrategies should ensure a Win-Win for all involved stakeholders. Project team is informed andinvolved in the realisation of the targeted value to ensure success.8 Page
  9. 9. Figure 4 : Realise Business ValueBusiness value dimension measures both tangible and intangible benefits. (Aaron J Shenhar). TheValue Register is a composite view of the business value proposition from a project. The impact onthe customer, organisation and society are evaluated to gauge the attractiveness of a project (Segal-Horn). Based on the organisation’s strategy and the market situation, weightage is assigned to thedifferent factors. Customer needs, risk, financial attractiveness, agility and investment are some of thefactors feature as part of the evaluation criteria.4 - Track & Improve:Periodic reviews are conducted to ensure progress against target. Interim dart values are reviewedfor health and corrective/preventive actions taken. The Value Register is updated with actual numbersfor these reviews and feature in the Programme/Business reviews. The Controlling phase of theproject lifecycle will be primarily concentrating on tracking the interim milestone values of the dartsand in initiating actions for alignment to target.The final review will be against the actual Value Register during Project Closure. Lessons learnt andbest practices are shared with the organisation and master value dart list at the organisation levelupdated. The organisation baselines for these value darts are also revised based on the inputs fromthe project. Project Managers are assessed against the value generated for their projects and bothextrinsic and intrinsic parameters are given weightage. # Taxonomy Type Value Dart Target Milestone Milestone Actual 1 2 1 Efficiency Extrinsic ROI for 90% 60% 80% 88% Customer (through Defect Reduction)9 Page
  10. 10. # Taxonomy Type Value Dart Target Milestone Milestone Actual 1 2 2 Social Extrinsic Reduction in 10% 2% 8% 10% planned travel 3 Customer Intrinsic Repeat $1M - - $ 0.5 M Market Business Value (current financial year) 4 Innovation Intrinsic Projected ROI 100% 100% 100% 100% & learning from R&D investmentFigure 5 : Value Register Snapshot5. Critical Success FactorsThe critical success factors for the DART methodology are: Customer objective articulation and agreement Value dart alignment to Business goals and appropriate target setting Clearly defined plan for Value Register realisation with responsibilities Agreement from stakeholders on the value darts and targets Senior Management support Effective communication Risk Management Scope of DART Success with typical scope of influence 1 2 3 4 5 6 2 3 4 5 6 Planning Production Handover Utilisation ClosedownFigure 6 : DART Success Scope10 Page
  11. 11. 6. Key Challenges During ImplementationThe key challenges faced during implementation for the DART methodology are: Communications and road shows to convince the practitioners and stakeholders of the value from implementation (Wideman) Training and application of the DART methodology Project Manager insight into Business vision for effective value dart setting Project Planning phase tends to be longer when DART methodology is applied to green field projects/new Project Managers Initial Master Value Dart definition at organisation level Articulation and realisation of intrinsic value requires extensive analysis and reviews High level of customisation required due to the varied nature of consulting projects executed7. Quantified Benefits To BusinessDART methodology application has been developed by the consulting arm of a global organisation.The application of the methodology has resulted in multi Million Dollar business value generation. The customer value delivered has been to the tune of approximately 7 Million Dollars in a year for the top 5 customers alone An intrinsic value of approximately 2 Million Dollars has been created plus intangible value like Employee Happiness and societal benefits Data backed project sponsorship decisions have been taken since the inception of the methodologyThe details of the quantified benefits from DART application are detailed in the Error! Referenceource not found..11 Page
  12. 12. 8. Case Study Background: A Consulting Practice with a global client base and providing customised consulting solutions for a wide range of domains from Banking to Manufacturing. The typical challenges include high degree of customised learning application to deliver the unique nature of projects, creating the confidence in the customer to bag phases beyond the initial state assessment, retaining special and energised talent and ensuring an overall value for all stakeholders. The DART methodology has been successfully applied for projects executed in this practice with multi Million Dollar worth business value generation. Key Benefits: A snapshot of the Value Register highlighting some of the Business Value generated through DART: # Taxonomy Type Value Dart Impact Value 1 Efficiency Extrinsic Cycle Time Faster $ 100K (Ongoing) Reduction  $ 2 Million (2 years) 2 Social Extrinsic Decrease in Project Better 10 (Annual) Travels 3 Innovation & Intrinsic Training ROI Better $ 1 Million (Annual) Learning 4 Innovation & Intrinsic Recruitment ROI Better $ 1 Million (Annual) Learning (Tool - 5 FTE) 5 Efficiency Extrinsic FTE Optimisation Better $ 0.5 M (Per Project) 6. Efficiency Extrinsic Rework Avoidance Cheaper $ 0.5 M (Annual) 7 Employee Intrinsic Attrition Better 10% reduction in Value annual attrition 8 Innovation & Intrinsic Resuable Better 10 (Annual) Learning Knowledge Assets 9 Social Intrinsic Print Material Cheaper 50 sheets/month Reduction 10 Customer Extrinsic Customer Loss Better $ 0.5 M (Immediate) Market Value Avoidance12 Page
  13. 13. 9. Lessons Learnt A Business Value Management knowledge area needs to be added to the PMBOK knowledge area list A Business Value function needs to be built into the Project Management lifecycle (the Initiation>>Planning>> Execution>>Controlling>>Closure ) as an umbrella activity Focus on business value in the Project Initiation phase will ensure that Project Management activities are planned and tailored early in the lifecycle to generate the maximum value for all stakeholders A need for evaluating the success of Project Managers beyond Project Delivery metrics is needed and the DART methodology can be adopted as a solution Project Management metrics can graduate beyond Financial and Delivery metrics to include lead indicators of business outcomes Project sponsorship approvals and prioritisations need to be aligned to the business value proposition from a project10. ConclusionOrganisations are constantly working to improve the value of their investments. Regardless of theeconomic state or health of the organisation, projects and initiatives receive significant scrutiny. Howthe money is spent and managed within projects determines not only the economic success of theoverall strategy, but also the personal success of the Program Managers who put those projectbusiness cases.The value management through DART methodology is an innovation in Project Management area toinstil and create Business Value throughout the lifecycle of a project. Focus on this dimension will becrucial to ensure organisation survival and growth in the long run.The pillars of innovation on which the DART methodology is built:Shift in Project Management Focus (“Accepting No Limits”) – Shift from traditional deliverycentric focus of triple constraints to business value centric approach. The DART value managementMethodology demonstrates that projects can go beyond their boundaries in bringing in significantbenefits to various dimensions both Intrinsic and extrinsic to the organisation.Shift in Project Management Lifecycle (“Alternative Thinking”) - Addition of an umbrella activity ofbusiness value generation throughout the project lifecycle through the DART solution .Building theProject /Initiatives business case with alternative thinking though business value bound to deliverbrings strong focus for these projects.Shift in Perspective (“Drive Positive Change”) - Project success is no longer constrained to the projectboundaries but instead maximises the business value for all stakeholders. Building the business valuefocus from the project initiation stage enables the positive change through out the life cycle and tobring clear visibility to all the stakeholders.13 Page
  14. 14. 11. Bibliography 1. Aaron J Shenhar, Ofer Levy. “Mapping the Dimensions of Project Success.” Project Management Journal (1997): Volume 28, No.2. 2. Appelo, Jurgen. “Progress in Three Dimensions.” 2008. 3. Cardy, Robert L. and Mark L. Lengnick-Hall. “Will They Stay or Will They Go? Exploring a Customer-Oriented Approach To Employee Retention.” Journal of Business and Psychology 26 (2011): 213-217. 4. Carty, Matthew and Richard Lansford. “Using an IT Business Value Program to Measure Benefits to the Enterprise.” White Paper. 2009. 5. Gerstenmaier, William H. “The “Fifth Dimension” of Program and Project Management.” ASK MAGAZINE 37 (n.d.). 6. Global Reporting Initiative. <https://www.globalreporting.org/Pages/default.aspx>. 7. Gretchen, Spreitzer and Porath Christine. “Creating Sustainable Performance.” Harvard Business Review (2012). 8. Lansford, Matthew M. Carty and Richard. “Using an IT Business Value Program to Measure Benefits to the Enterprise.” 2009. 9. Liebowitz, Jay and Isaac Megbolugbe. “A set of frameworks to aid the projectmanager in conceptualizing and implementing knowledge management initiatives.” International Journal of Project Management 21.3 (2003): 189-198. 10. Saladis, Frank P. and Harold Kerzner. Bringing the Pmbok Guide to Life: A Companion for the Practicing Project Manager. John Wiley and Sons, 2011. 11. Segal-Horn, S. “The Modern Roots of Strategic Management.” European Business Journal 16.4 (2004): 133-142 . 12. Smith, Michael, Audrey Apfel and Richard Mitchell. “The Gartner Business Value Model: A Framework for Measuring Business Performance.” Research. 2006. 13. Wideman, R. Max. “Modeling Project Management.” AEW Services, (2003). 14. Zwikael, Ofer and John Smyrk. Project Management for the Creation of Organisational Value: A Managerial Perspective. London: Springer, 2011.14 Page
  15. 15. 12. Author’s Profile: Muktha Kartik, Process Consultant of Business Value Enhancement (BVE) at Mahindra Satyam with +10 years of experience in the Software Industry. She has proven expertise in Process and Quality Assurance. She is an active member of the ISO/IEC JTC1/SC7 working group. She holds Engineering and Management degrees and certified in collaborative programme by Harvard Business School. Deborah Devadason, Principal Consultant – BVE at Mahindra Satyam with +16yrs experience. She has consulted US, Europe and other clients in Process Integration and implementation on various Quality models. She holds dual Master degree in Technology and Science. She is certified in ITIL, PMP, CQM, and CSSBB.13. Special AcknowledgementWe would like to acknowledge the motivation and support from Business Leader MuraliGopalaswamy and Team Lead Ranjini Balaraman for the effective review and support and toRatnesh Saxena and Sonia Rao for helping us with the paper format.Also we would like to acknowledge all the Business Value Enhanacement team consultants who havesupported in implementing this innovative approach at various stages.15 Page

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