Multiple project management methods – but which one fits my group?

What’s the best way to manage project execution today?

There’s a ton of methods to choose from – Waterfall, Agile Scrum, Kanban, RUP, Agilefall, BPU. You name it, there’s a method out there. And that’s the point. These methods were developed for different types of project work. Agile methods have been proven to speed up delivery of software with reduced risk. Classic waterfall methods still do a great job for infrastructure work like building out networks and opening new offices. In order to appease the business leaders that don’t “get” Agile, a hybrid has been developed that still reports milestones and date targets while primarily executing in Agile fashion. Some call this hybrid approach “Agilefall” and there are combined software/hardware projects that employ Agile for the software component, Waterfall for the hardware, and program management over the whole thing to make sure they sync up.

So which one for your IT department? Well, let’s take a look at the type of work IT does. Software development? Yes. Application rollouts and integrations. Check. Network build-outs? Yep. Desktop/laptop refresh cycles? We do that too. Suffice to say, IT is a diverse place with a very heterogeneous set of work. Obviously, one size does not fit all here.

So, what to do? The answer is pretty simple – use the method for the job at hand.

But wait – doesn’t that create a free-for-all, with project managers picking their favorite execution method? Without governance that’s exactly what will happen. So, let’s add some governance.

First, establish a PDLC – project development lifecycle – with key control artifacts and processes. A common project selection and initiation process. A common set of high-level control artifacts such as status reporting (yes – an Agile status will look different from the others – but we still need status!), risk and issue logs. Then, setup standard methods within the PDLC for project managers and scrum masters to follow. The governance should also include a set of parameters that help you choose which method to follow.

While trying to establish a rigid SDLC that everyone in IT follow could result in gridlock, having multiple methods need not result in chaos. A little standardization and governance can go a long way.

Top Five PPM Trends to Watch Out For in 2014

The business world is forever changing and for organizations to thrive they must be able to adopt or, even better, be an early adopter of the noted trends and predictions. All neatly wrapped up as the top strategic PPM trends for the coming year, Daptiv predictions focus on increasing the benefits of Agile, greater applicability for PPM solutions across the board, and enterprises spearheading the creation of strategic PMOs, influenced by the reliability of benefits forecasting.

Here are Daptiv’s top 2014 predictions for the Project Portfolio Management industry:

  1.  Increased adoption of PPM for integrated portfolio management: The evolution and rapid uptake of SaaS PPM has increased coordination with ancillary IT management applications). ALM (Application Lifecycle Management), Agile and ITSM vendors have been leveraging PPM through alliances, integration, and/or acquisitions. This trend began to have an impact in 2011 and Daptiv sees this to continue to play a key role in PPM’s market growth through 2014.
  2.  More PMO heads will measure effectiveness on business results: While introducing tools, using methodologies, mapping project management practices, sending project managers to training, and increasing the number of professional PMs in the organization are important metrics for a PMO head to collect and report on, they do not speak to the effectiveness of the PMO from a business perspective. To judge business effectiveness, PMO heads will determine if their work has had a positive, quantifiable effect on the business in terms of troubled project reduction, positive business results, lower project manager attrition, and faster time to market. In 2014 the practice of measuring the outputs, not the inputs, of project management will gain traction.
  3. Portfolio Management gets the attention and  funding and encourages project entrepreneurship: Daptiv sees more companies directing tight budgets toward IT and process improvement via portfolio management to get a handle on enterprise project investments. Project entrepreneurship means project managers must develop an “entrepreneurial” mindset. In 2014, this mindset will enable project and portfolio leaders to take on risks, foster innovation and focus on business value rather just looking at the traditional triple constraints.
  4. Rolling-Wave Planning (Agile): Rolling-Wave Planning is the process of planning a project in phases as it proceeds rather than completing a detailed plan for the entire project before it begins. Planning is dependent on speculation and the further out the plan the more quickly the strategy will become obsolete as conditions change. In Rolling-Wave Planning, one will plan over time as the details in the project become clearer. Daptiv forecasts rolling-wave planning to become the default approach in 2014 and expects it is here to stay in the project management world.
  5. Getting Started with PPM Benefits Realization: 2014 will see a much-needed shift of PMOs from being tactical to strategic. More formalized strategies will strategically align organization goals with the business objective of the organization, consequently delivering end-to-end benefit. Gartner estimates that less than 15% of enterprises systematically measure the business outcomes of their initiatives. Most IT and PMO organizations focus their measures on price and performance, not value. This year will move the needle by shifting the language and the focus from on time and on budget to speaking about the resulting benefits.

 

Insights and Trends: Current Project Portfolio Management Adoption Practices

In order to stay competitive, today’s top management is confronted with the critical task of analyzing and improving the ability of an organization to change, survive, and grow in this complex and changing global economy.

Organizations have thus been moving from operations and business as usual, to implementing change through project management as part of their competitive strategy. The ability to successfully execute projects is what drives the realization of intended benefits and the achievement of business objectives.

Organizations that execute projects successfully employ effective Project Portfolio Management (PPM) practices as a tool to manage and drive change. Given the strategic impact that projects have on business, organizations must follow effective PPM processes that capitalize on innovation; measure progress, value, and risks; and confirm that the right projects can be delivered in alignment with organizational strategy

We at Daptiv conducted a survey to examine the challenges faced by today’s businesses now that increased scrutiny over budgets (aka “doing more with less”), efficiency and effectiveness are key factors of successful organizations. The survey’s main objective was to identify current trends in PPM, and pinpoint the characteristics of PPM that are applied in higher-performing organizations. This survey was conducted among 300 project managers and senior executives attending the PMXPO Conference. Some of the key inferences from the survey were:

Why do product managers and senior executives take on PPM and implement software to support it? According to our survey, their top reasons (in order) are prioritizing projects, gaining visibility into live projects, planning and preparing for future projects, and managing cost and resources. A whopping 62% answered “all of the above”. This makes obvious that PPM is providing a lot more value than simply improving project execution.

Assessing the current adoption of Project Portfolio Management across sectors, the survey revealed that 64 percent of the respondents use PPM tools to manage their general IT projects while the remaining respondents deployed PPM solutions for compliance, product development, training and mobile related projects.

While establishing and communicating projects goals to the project management team can assist in the identification of project risks and constraints that may impede the achievement of those departmental goals, limiting the scope of project portfolio management tools within an organization can have rippling side-effects in the overall achievement of organizational goals.  According to PMI’s 2012 Pulse of the Profession In-Depth Report: Portfolio Management Report, the majority of portfolio managers in highly effective organizations spend 75 percent or more of their time on portfolio management. The report further indicates that in organizations where managers focus on strategic as well as departmental goals, 70 percent of projects meet or exceed their forecasted ROI, compared to 50 percent at organizations where managers rarely focus on strategic goals.

Another interesting fact that came from the survey was that 76 percent of the respondents still use homegrown spreadsheets internally to manage projects in some capacity. Since 55 percent of respondents have more than 1,000 employees, this can easily lead to PPM data integrity issues and ponderously slow feedback loops. Definitely not a path that enables firms to pivot with rapidly changing business conditions. Moreover, from our experience this manual approach significantly impacts project performance. Today’s organizations need to see and trust information as it develops to make decisions that will help them outpace their competition.

While the BYOD movement is taking corporations by storm, our survey found that nearly 75 percent of respondents are not applying PPM techniques or software to their rollouts of smartphones and tablets.  IDC  recently forecasted that by 2017, total PCs are expected to drop to 13 percent, while tablets and smartphones will contribute 16.5 percent and 70.5 percent respectively. Considering the BYOD trend is only going to gain momentum in the near future, IT needs to get on the bandwagon and start actively managing this effort. Such forward-thinking strategic project planning transforms organizations from defensive and reactive to proactive and dynamic.

One of the key qualifications of a project is that it has a definite start and a definite end, though “ending” a project with a proper close-out process would appear to be an after-thought. Our survey revealed that 24 percent of the respondents do not conduct project reviews at all. That is a big number considering that of those who do, only 15 percent find they are meeting their project targets. The very last part of the project life-cycle it is often ignored even by large organizations, especially when they operate in multi-project environments. When the project is delivered, the closeout phase must be executed as planned. It plays a crucial role in sponsor satisfaction since it can create a lasting impression.

These findings are consistent with what we’ve experienced in our PPM consulting engagements. For many businesses, elements of PPM may already exist, but in non-linear and disjointed fragments. The most important factor in the success of PPM is aligning the portfolio with organizational strategy. The positive effects of strategic alignment lead to higher levels of project and portfolio performance, and increases stakeholder satisfaction with their organization’s project portfolio management practices at all levels of portfolio scale and complexity.

To know about the survey results, click here.

Life after project completion: Is a project complete without benefits realization?

In our day-to-day project management and PMO activities, the easiest and the most important thing missed is planning ahead for what happens AFTER we cross the finish line. So technically speaking, once project managers hand over the reins of the completed project to the business owner, their job is just half done. For a project to be considered complete, project managers must focus on the other half, which is “Benefits Realization”.

Benefit realization is the confirmation that the value a project was expected to generate really does get delivered.  In our everyday project management lives it is easy to get buried in details around task management, risk mitigation, resource capacity, balancing budgets and all the other moving parts.  We often forget why we set out to do the project in the first place:  the delivery of a product or service, an enhancement or improvement, or a capability.  For example to meet some new regulation, standard or market demand.  But what if, after we deliver the goods, and did exactly what the customer asked for, we realize that all the effort and resources we used to deliver the project don’t amount to what they were supposed to?  That’s exactly what benefits realization is all about.

We’ve all heard of ROI – return on investment.  It is the concept of an investment of some combination of resources (people, money, equipment, etc.) yielding a benefit to the investor.  A high ROI means the investment gains compare favorably to investment cost. As a performance measure, it is one of the best methods to evaluate the efficiency of an investment.  ROI does not exclusively have to be in financial terms.  It can easily be an operational advantage, an improvement in position, or other positive change.  In order to compare the efficiency of a number of different investments we need to compare like measures, which is why a financial ROI is one of the most commonly used.  Unfortunately, without benefits realization, our ROI is simply a guess.  And that is why benefits realization is so important.

I’ve discussed with   many of our clients about this and have found out that there is a need for a wide degree of maturity around the realization process.  This is an indication that while the concept of realization is gaining interest, it is still far from a mature practice.  Which presents a great opportunity for those organizations that are not doing it – now is a great time to implement this practice.

How to launch a benefits realization initiative?

One of the best approaches involves setting goals, tracking against those goals and including a ‘hand-off’ step, similar to the passing of the baton in an Olympic relay race.  Tactical steps you can take include:

  • Set your sights:  using whatever calculation available, combined with experience and validated by results from similar projects, come up with a target for what the value you think the project will deliver.  Set that as the initial estimate.  Enlist the help of a financial leader or controller to help set the original estimates.
  • Continual monitoring:  Using the initial estimates or targets as a first guess, continue to refine the success factors throughout the lifecycle of the project.  These are often called forecasts or committed values and are more accurate than the original estimates.  It is best to continue revising these figures throughout the lifecycle of the project.  The objective here is to have these forecasted numbers eventually match the actuals.
  • Start tracking actuals now:  some project can actually generate benefits even before the project is complete.  What a great win for the project team to be able to report these.
  • Put a plan in place: Add a milestone or stage beyond the Complete step called Close or ‘Realization’ and set a validation step 3, 6 or 12 months after the project is complete.  It sets the expectation that the work is not over at Complete.
  • It is outside of the project manager’s responsibility:  As the project comes closer to its Complete or End date, engage the financial sponsor and the process owner (the person who is benefiting or owning the project’s or product’s outcome, improvement or change) and have them start validating and “owning” the numbers.
  • Go back to the beginning:  how accurate were your original estimates compared with your forecasts and your actuals?  Take those learning and apply them to future estimates.  This is called continual improvement – applying lessons learned and best practices to improve the entire PMO.

One last point is that it isn’t always about the money.  Sometimes projects generate other value, such as an improvement in customer satisfaction, or increase market share by launching a game changing product.  It is important to be able to quantify the value of these types of projects even if they do not generate direct revenue or cost improvements.  Many organizations call these ‘Level 2” or “Indirect Benefits”.

Finally, is a project complete without benefits realization?  To the project manager who’s already run their marathon and marked the project as complete, I expect their answer to be ‘yes’, but common sense tells us otherwise.  As a best practice, one of the most important factors in a projects success isn’t “how we did it” – coming in under schedule or under budget – but “what we did” – that the project delivered what it set out to do.

Introducing and Setting Up a Project Management Office

In my last article we delved into organizational maturity for setting up a PMO; this article will deep dive into how to introduce a PMO without disrupting the established system. The first step is good communication–clear and complete information reduces confusion and eliminates resistance based on fear and conjecture.

Communicate the mission, objectives and purpose of the PMO. Be open and transparent regarding the decisions and activities of the PMO. Inform the enterprise of the reason(s) the PMO exists, what it will do and how it will bring value to the enterprise. Also, demonstrate how the PMO will be a partner and not a hindrance in working toward the success of everyone in the enterprise.

Once the need to set up a PMO has been identified and the communication campaign is actively underway, the PMO must be designed from the beginning to meet the specific needs and environment of the business it supports. Project Management Offices take on many roles depending on their mission and objective, hence setting up a PMO is not a short-term activity. It requires significant effort to complete analysis, design, planning, review and implementation. Cooperation and involvement from the business is essential to ensure the PMO meets their needs. Involving the business early and often by keeping open communication channels and soliciting feedback will allow you to manage expectations regarding the amount of time and effort required to set up a PMO.

Setting the priorities of the PMO
In order to move ahead with the planning process, the business should first set the priorities of the deliverables and services of the PMO. Next, assemble a planning and implementation team that includes stakeholders in addition to the PMO subject matter experts. In my opinion, business stakeholders must be involved throughout this process to analyze and take ownership of business needs and progress. On the planning side, it should be phased out, using a rolling wave approach as opposed to a “big bang” approach. These phases should be scheduled out using the roadmap model with detailed planning occurring at the initiation of each phase. This makes the planning current and more relevant to the prevailing business condition.

Laying down project management processes
The next major task is to identify processes and tools required to support the services and functions the PMO will perform. Depending on business needs and budget, an organization may either develop in-house tools or purchase tools from vendors to help streamline projects. Project management processes should be designed to guide the project managers in the performance of the project. PM processes need to be adaptable to meet the needs of any project. A simple project with little risk may require a very light application of the process, whereas a complex project or a project with high levels of risk will necessarily require a more rigorous process.

Project management processes are generally based on standards or best practices such as PMI’s Project Management Body of Knowledge (PMBOK), PRINCE2 and agile. In addition to general purpose standards, organizations may also require and benefit from specialized project management best practices such as process improvement (Six Sigma), new product development and Go-To-Market.

Project Portfolio Management (PPM) is another function often found in PMOs. Organizations turn to PPM to manage their entire portfolio of projects, much like a portfolio of investments. In fact, projects are investments and companies expect to get the maximum return and benefit from these investments. PPM is the process by which they achieve this. Through project selection, project mix evaluation, portfolio monitoring and other activities, PPM is used to maximize returns on the portfolio.

Resource management (RM) often becomes the responsibility of the PMO because it is a natural partner with project management and project portfolio management. Within every organization there is a finite supply of resource types–including people, financial, and physical assets. Resource constraints affect both project work and operational work, the normal day-to-day work of the business. Accordingly, resource management processes should track the operational work (the day-to-day activities) in addition to project-specific work being done by the business in order to paint a complete picture of the total capacity or work an organization can truly deliver.

It is evident that these PMO functions are integrated and integral to the success of an organization. While organizations can adopt some of these elements, ultimately an organization needs to implement each of these disciplines to some degree to manage its program office effectively, even if they are being managed at different degrees of maturity. The project portfolio lifecycle encompasses elements of the project management process, the resource management process and financial management.

Keeping the PMO Relevant
To complete the whole cycle of project implementation and as part of a continuous improvement program, regular feedback from teams/project managers will help maintain the efficacy of the PMO at all times. It’s helpful to develop a continuous improvement program that includes:

  • Periodic reviews of the PMO objectives against the needs of the business
  • Measurements of the processes and tools such as effectiveness, adoption and consistent use
  • Identify areas for improvement

In the end, be sure to give new processes and tools time to be used long enough to overcome learning curves and to gather enough feedback and data to be able to make well-informed decisions. By their very nature, program management office teams are change agents. They institute new processes, implement new tools and may bring about changes in the way organizations conduct business. When planning for organizational change, the PMO must create conditions for change. Be aware of the politics of the organization, and build a base of support for change within the organization.

The third and final part of this series will touch upon metrics and how to measure success of PMO.