Week07 slides 2013_s

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Week07 slides 2013_s

  1. 1. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 1MGT610Lecture 7Stakeholder Perspective:Identifying Needs for Requirement Definition
  2. 2. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 2Project Value NetworkShareholderValueOutcomeValueStakeholderValueEffortValueProjectScorecardStatisticalProjectControlStakeholderDeploymentWhat we control in the effort should deploy outcomes that reflect where we expectto find the project’s value as described in the project’s scorecard.
  3. 3. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 3The Tree Swing Problemwhat marketingsuggestedwhat managementapprovedas designed byengineerswhat wasmanufacturedas maintenanceinstalled itWhat customerswanted
  4. 4. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 4Topics and Objectives• Strategic Thinking: Understanding stakeholderperceptions about the project’s value• Filters in the PVN: How will we organize thestakeholders into segments having compatibleviews about value?• Constancy of Purpose: Understandingcomparative advantage as stable needs havingdynamic tolerances• Stakeholder Schematics: Coordinatingcomparative advantage as a horizontal chainof value
  5. 5. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 5Session AgendaStakeholder Perspective:Identifying Needs for Requirement Definition1. Perceptions of value lead to expectations2. Compatibility of expectations as segmentation basis3. Stable needs but dynamic expectations4. Describing expectation as a tolerance
  6. 6. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 6The Fundamental Challenge in Project Management:Maximizing Project Value by Managing Satisfaction“If I had to reduce my message for management to just a few words, Id say it allhad to do with reducing variation”—W. Edwards Deming“The central problem of management in all its aspects...is to understand better themeaning of variation, and to extract the information contained in variation.”—Lloyd S. NelsonMaximizeProjectValuePrerequisiteMaximizeInflowRequirementObjectiveMinimizeOutflowMinimum Required-ALAPMaximum Desired-AFAP
  7. 7. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 7Framework of 7 Basic Questions for the PVS
  8. 8. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 8Changeof GoalsStakeholder Satisfaction: Impact of DissatisfactionPM barriers:Conflicts and Goal Changes haveStrong negative effects on projectsuccessOne major source of variation:Conflicting and ChangingStakeholder SatisfactionStrategy:Avoid changes by identifyingstakeholder needsConflictsSuccess+.41-.21-.20R2= 39%
  9. 9. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 9Stakeholder Satisfaction and Market Value1999 Macpherson Publishing, Alexandra, New ZealandFrom an article by Steve Hoisington of IBM Rochester.
  10. 10. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 10Stakeholder Satisfaction: Quality Problems & RepurchaseDecision8750744583538353020406080100AutomotiveServiceFinancialServicesPackagedGoodsHigh TechEquipmentNo Problem Problem%WillingtoRepurchaseSource: J. Goodman, “Measuring and Quantifying the Market Payoff of Improved Quality and Service,”Questfor Excellence IV Conference, February 4, 1992.
  11. 11. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 11Stakeholder Satisfaction: Impact of DissatisfactionProportion of unhappy customers who will repurchase(Complaints valued at over $100)Source: J. A. Goodman and D. S. Ward in Direct Marketing (December, 1993).Did Not ComplainComplaints NotResolvedComplaintsResolvedComplaintsResolved Quickly37%46%70%95%
  12. 12. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 12Stakeholder Satisfaction: Impact of DissatisfactionWhat is your percentage of dissatisfied customers?– Only 4 out of 100 dissatisfied customers complain!– Each dissatisfied customer tells 8 to10 people abouthis/her dissatisfactionMarket Impact?– 1000 reported customer complaints are approximately25,000 dissatisfied customers!– 25,000 dissatisfied customers are expected tocommunicate their dissatisfaction to approximately225,000 people!
  13. 13. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 13Creating Stakeholder Value• Customers buy on value. Value as an advantage isdetermined by comparing quality relative to price.– Quality includes all the non-price attributes that count in thepurchase decision--both product and service.– Value (price and quality) is not an absolute expectation. It leadsto expectations which can be expressed as tolerances relative tostakeholders’ perceptions about what is possible.ValueQualityPriceProductServiceInitial PriceLife Cycle Costs
  14. 14. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 14Stakeholder Value by Accident
  15. 15. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 15Traditional QFD: DefinitionQFD (Quality Function Deployment):• Is a detailed system for translating the needsand wishes of the consumer into designrequirements for products or services.– Developed in Japan by Dr. Yoji Akao and Dr. ShigeruMizuno– Purpose: assure customer satisfaction– Primary concept: value– Tools: 7 management & planning tools
  16. 16. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 16QFD AdvantagesQFD has fewer engineering changes and adjustments!NumberofChangesTimeTraditionalDevelopmentQDFDevelopment1st Day ofProduction Adapted from Sullivan, 1996
  17. 17. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 17Applying QFD: The Strategic DecisionAllocation of ResourcesQFD requires substantial initial investmentsvs.Traditional management requires increasinginvestmentsResourcesTimeTraditionalQDF
  18. 18. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 18QFD Advantages• Shorter development time (30% - 50%)• Fewer engineering changes (25% - 50%)• Reduced introduction costs• Satisfaction of consumer needs and desires• Improved product manufacturability• Commonality of language• Development of a ready reference for the future
  19. 19. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 19QFD Goals• Increase market share• Design value into the product• Translate subjective statements into objectiverequirements
  20. 20. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 20QFD Development Process StepsIdentify the MarketSelect a Product ConceptDesign ProductDesign ManufacturingPrioritize Customer SegmentsUnderstand Customer NeedsAnd Context, Translate intoEngineering LanguageSelect the Best ConceptGenerate New ConceptsTarget CostPrioritize Development ProjectsEstablish TargetsEstablish Relationships betweenManufacturing Conditions andProduct Performance
  21. 21. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 21Decomposition ofNeeds intoTolerances andOperating LimitsQuantifies theAcceptableComparativeAdvantage. textProductPlanningNeedsDesignTargetsFeatureDeploymentDesignTargetsFeatureSpecsWorkflowPlanningFeatureSpecsProcessTolerancesWorkPackagePlanningProcessTolerancesOperatingLimitsIfNew, Important, or Difficult,ThenDefineElseDefer Effort Until RequiredFocusing CriteriaNeedsDesign TargetsFeature SpecsProcess TolerancesOperating LimitsNeed HierarchyOutputs are caused by tasks.Value-added tasks should:• Change the output• Solve a need by meetingdesign targets.design fordeploymentof bestcomparativeadvantageUsing a modified QFDframework,• Plan the product.• Plan the workflow.
  22. 22. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 22Stakeholder ManagementTo avoid goal changes and dissatisfied customers?1. Plan and implement customer value by creatingoutput value2. Apply QFD concepts at the project level3. Manage customer satisfaction during the project4. Manage the customer relationships
  23. 23. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 23Simplified Need Identification: DefinitionsNeeds:Necessity, a condition in which something necessary or desirable isrequired or wanted; a requirement.Expectations:The condition of looking forward to somethingSpecifications:A detailed description of design criteria for a piece of workRequirements:Something that is required; a necessity; A requirement is a singulardocumented need of what a particular product or service shouldbe or do.Functional requirements - Describe system features or things thesystem must do.Non-functional requirements - Describe properties the system musthave (e.g. performance, availability, accessibility).Constraints - Limits the development in some way.
  24. 24. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 24Simplified Need Identification: Need DefinitionA need is:• a condition requiring relief;• anything that is necessary but lacking;• necessitate: require as useful, just, or proper;• a want: have need of …
  25. 25. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 25Simplified Need Identification: Categories of NeedCustomer satisfaction is influencedby a variety of needs.UndocumentedNeedsDocumentedNeedsNecessarySatisfiersDesirableSatisfiersCustoms &HiddenMotivatorsExcitersRegulations,Specs, &StandardsNegotiatingPositions
  26. 26. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 26Simplified Need Identification: Customer VoiceSatisfiers Moments of Truth ExpectationsBroad aspect of need.When experienceis compared withexpectation, opinion ofsatisfaction is formed.The tolerance expressed ascentral tendency anddispersion.One-word label. Howcustomer talks aboutsatisfaction.Names comparisonopportunity as an event.Tolerance sets theacceptable uncertainty foroutcomes and effort.I want … When I …, I expect …convenience. go shopping,to drive 5 to 15 minutes tofind a shopping center.
  27. 27. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 27Simplified Need Identification: Customer VoiceSatisfiers Moments of Truth ExpectationsI want … When I hear about …, I expect …Accuracy.the construction process usedto build the house,USL = 150 days,LSL = 30 days,Target = 90 days tocomplete construction.Reliability.the process used for curing theconcrete foundation,USL = 12 days,LSL = 2 days,Target = 7 days to cure.When the house is built in under 3 hours,• I perceive the accuracy of construction to be …?When the concrete is pronounced cured in 20 minutes,• I perceive its reliability to be …?I perceive …• Fear,• Uncertainty,• Doubt …
  28. 28. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 28Exercise: Simplified QFD for the 4-Hour HouseI expect …When I …,I want …ExpectationsMoments of TruthSatisfiers
  29. 29. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 29Understand Need: Simplified QFD InformationSatisfiers Moments of Truth ExpectationsBroad aspect ofneed.When experienceis compared withexpectation, opinion ofsatisfaction is formed.Tolerance for variationexpressed as centraltendency and dispersion.One-word label.How customer talksabout satisfaction.Names comparisonopportunity as anevent.Tolerance sets theacceptable uncertainty foroutcomes and effort.I want … When I …, I expect …maintainability. redecorate the house,to spend $0 to $1,000 forrepair problems.Example: The 4-Hour House should be easy to maintain.Ambiguous attribute of satisfier;must translate into hard expectation.Soft ExpectationMeasurable attribute of a satisfier;a performance benchmark. If met,should lead to satisfaction.Hard Expectation
  30. 30. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 30Simplified QFD InformationSatisfiers Moments of Truth ExpectationsBroad aspect ofneed.When experienceis compared withexpectation, opinion ofsatisfaction is formed.The tolerance expressedas central tendency anddispersion.One-word label.How customer talksabout satisfaction.Names comparisonopportunity as anevent.Tolerance sets theacceptable uncertainty foroutcomes and effort.I want … When I …, I expect …size.learn about theavailable living space,to find 2,400 sq. ft. +/-200 sq. ft. of useableliving space in the house.Example: The house should be of sufficient size.
  31. 31. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 31Project QFD: Essential Chaincritical chain essential pathQFD is the theoretical foundation for project QFD:– critical chain — best basis for managing schedule– essential path — best basis for managing valueDelivering value to customers is the prime directive for projectmanagers of product development projects
  32. 32. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 32Appendix
  33. 33. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 33Appendix
  34. 34. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 34Appendix: Analyzing Stakeholder Data7 TQM Management & Planning Tools
  35. 35. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 35Appendix: Quantifying Acceptable Variation using SPC ConceptsLQL: Limiting Quality Level for rate of nonconformances which can betolerated by the stakeholder’s workflow.AQL: Level of nonconformances expected out of the effort’s workflow.
  36. 36. Mgt 610 Strategic Perspectives on Project Management(c) 2013, Thomas Lechler. All rights reserved.For academic use only. 36Cp and Cpk Describe the Balance in Acceptable UncertaintyLCL UCLµ-1σ-2σ-3σ +1σ +2σ +3σInherent Capability if Cp = 1.0 = CpkLSL USLTolerance{x|x = LSL ≤ x ≤ USL}{x|x = LCL ≤ x ≤ UCL}Inherent Capability = Tolerance Tolerance = 2 * Inherent CapabilityLCL UCLInherent Capability if Cp = 2.0 = CpkTolerance{x|x = LSL ≤ x ≤ USL}{x|x = LCL ≤ x ≤ UCL}LSL USLµ +1σ +2σ +3σ-1σ-2σ-3σ +4σ-4σ-5σ-6σ +5σ +6σTolerance = 1.33 * Inherent CapabilityLCL UCLInherent Capability if Cp = 1.33 = CpkTolerance{x|x = LSL ≤ x ≤ USL}{x|x = LCL ≤ x ≤ UCL}LSL USLµ +1σ +2σ +3σ-1σ-2σ-3σ +4σ-4σMinimum for 6-sigma QualityInherent Capability if Cp = 2.0; Cpk ≥ 1.5Tolerance{x|x = LSL ≤ x ≤ USL}LSL USL+1σ +2σ +3σ-1σ-2σ-3σ +4σ-4σ-5σ-6σ +5σ +6σµLCL UCL{x|x = LCL ≤ x ≤ UCL}

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