How to save a failing project and when to walk away from one?

October 22, 2012 By Leave a Comment

PMOs and project managers are faced with failing projects more often than they would like to and it often turns out to be a demoralizing experience for all stakeholders. Consequently, it is vital for PMOs to recognize the signs of a failing project and take corrective action before it is too late. In order to engineer a successful turnaround, PMOs and PMs need to watch for certain leading indicators of project failure.

 

Leading indicators of project failure

  • Progressive scope creep:  While some scope changes may be necessary, constant updates to the project scope indicates that the project sponsor and other stakeholders don’t have their business case buttoned up or the assumptions under which the project was sanctioned are no longer valid.
  • High rate of churn in project staff:  It is normal to have long projects to have planned rotation of staff.  However, you need to watch for unplanned attrition from the project team.  Each person who leaves in an unplanned way takes with him/her knowledge of the project.  Areas of the project can be put at risk and the team may need to revisit some past decisions because no one knows why the decision was made.  All this results in extra time and cost with no increase in value.
  • High cash burn rate: Are you tracking your Cost Performance Index (CPI)?  CPI = Earned Value/Actual Cost.  If your CPI is trending less than 1, then you are not using your budget efficiently and are burning through cash.

Reversing the trend (Turning around a failing project)

  • Revisit the scope statement periodically (say once a month) and verify if you are still delivering the same project.  If the nature of the scope change is so drastic that it will potentially change the deliverable, take it up with the project sponsor and decide if the project should be stopped in its current state.
  • Review the staffing situation every month.  Evaluate how many unplanned vs. planned exits have occurred.  If a critical resource or a member of the project leadership team has left, it is a red flag.  Summon a meeting with all stakeholders and the project sponsor to assess the situation and plan to bring in an alternate equally capable resource who is committed to delivering on the project.
  • If your CPI is trending less than one month over month, you are putting the project in a financially unsustainable situation.  You should jump into cost control mode and only approve critical expenses.  If you are buying from an outside vendor, use your purchasing team to negotiate a lowest possible price or do this yourself.

Walking away from a failing project

Pulling the plug on a project that is underway is often not an easy thing to do.  There usually are a lot of personal and political forces at play.   More often than not, people will waste money (and time) in order to justify costs they’ve already spent.  The key here is to maintain objectivity and avoid the Sunk Cost Fallacy.  Meet with your project sponsor and review the costs-benefits of the project and be prepared to justify why the project should be cancelled or stopped.

Filed Under: Official Daptiv Blog, The Business-Driven PMO Tagged With: , , , , ,

Elements of a Lean PMO

August 27, 2012 By 1 Comment

People and organizations all over the world continue to embrace and adopt “Lean Management Principles” in their work. What started with Edward Deming in the 1950s and later found its way into the Toyota Production System has now made inroads into software development.  You will notice that IT organizations and software development teams often talk about “Lean” software development or “Kanban” as it pertains to how they work.  It is therefore essential that today’s Project Management Office (PMO) understand this old new way of project execution in order to stay relevant in today’s business climate.

Before we go any further, let us first understand what Lean is all about and whether PMOs should embrace this concept as well.  Lean in a nutshell, is a set of tools that help in the identification and elimination of waste.  As waste is eliminated, quality improves, consequently, reducing time and cost of production. While elimination of waste can seem to be a simple subject, it is often easier said than done. Organizations often have a difficulty classifying a process or activity as waste and often tend to be conservative when identifying/defining waste.  Toyota defines Lean as the reduction of three types of waste:

  1. Non-value-adding work
  2. Overburden
  3. Inconsistency/Unevenness as it pertains to flow of work

Lean aims to make the work simple enough to understand, execute and manage, and I believe that all PMOs should strive for this. Let us now get down to brass stacks and examine how a PMO could strive to be Lean.  Here are some steps a PMO could take:

  1. Prioritize projects based on business value. A project is a vehicle for change in an organization, which means that the business does not like the current state it is in and constantly evolves to move to a new state. Be willing to question the assumptions that drive any decision to change and make sure that the scope of the project is in line with the desired change/objective.  This will help PMOs avoid/eliminate non-value-adding work.
  2. Keep the internal PMO processes simple to start with and make changes as you mature. This will help the Project Managers and the PMO director to focus on delivering business outcomes rather than following mundane procedures.
  3. Level out the workload among the Project Managers so that they can provide each project the required attention.  Take the help of automation tools such as Project Portfolio Management software to help with collaboration, resource management, project prioritization, and reporting.
  4. Use a “pull” system as your project intake process.  In such a system, the sponsor of the project would place an initial project request.  This request in-turn would trigger a project prioritization request, which in turn triggers subsequent requests (such as resource request). This will encourage a “just-in-time” process and will discourage a “just-in-case” process (common in a “push” system) wherein resources are often under-utilized.

To conclude, as projects and project executions take on a lean posture, it is imperative that PMOs do so as well.  With this blog I have just scratched the surface of the lean PMO concept.  Stay tuned for more!  In the meantime, I welcome your comments and feedback.

Filed Under: The Business-Driven PMO Tagged With: , , , , , ,

Reports from The PMI Global Congress North America

November 4, 2011 By Leave a Comment

The PMI Global Congress offers a great opportunity to interact with practitioners of project portfolio management (PPM).  This year’s event was held in Dallas, Texas from Oct 22 – Oct 25.  My time was mostly spent in group interactions and attending presentations.  It provided a rich and diverse perspective on what people were experiencing in the project management space.

If I were to distill my group discussions based on key challenges people are facing, they would include:

  1. Resource management challenges– Many project management systems being used by PMs do not provide enterprise-wide visibility into resource availability
  2. Implementation challenges– Companies are too often not able to get their current PPM system to work the way they want it to.  In most discussions, I heard the phrase “organizational impasse” over and over.
  3. Challenges with enterprise level visibility– PMOs are spending a lot of time generating reports to use in executive meetings and are looking for a system that provides a single source of truth for reporting

The PMI sessions as always are rich in content.  The question is what is relevant to your area of interest.  I mostly attended sessions that talked about new project management trends.  Here are my key takeaways:

  1. Agile project management is here to stay and it continues to grow in popularity.  However, organizations are struggling to reconcile agile and waterfall projects.  Nancy Yee from ESI International’s presentation titled “Agile: Still the Magic Bullet or Do You Need a Blended Solution” explained this problem articulately and offered a clear path that would help Agile and Waterfall projects co-exist and complement each other.
  2. In order for PMs to be successful, they have to move beyond commonly understood project management activities and take on business analysis functions.  Today’s PMs should be able to assess, quantify, and communicate a project’s impact in business terms èthe PM needs to have a clear grasp of Earned Value, Project Finance, Business Case Analysis, and Balanced Scorecard concepts.  The presentation on Powerful Project Financials by Sean Wilson and Claire Schwartz, provided practical insights on how this can be achieved.  Roberto Toledo’s presentation titled “From Balanced Scored to Project Portfolio” showed how strategic initiatives can be achieved through execution of projects.
  3. The majority (about 52%) of PMOs are not perceived as being successful.  In order to survive they need to re-evaluate their purpose and value to the organization they serve.  Jack Duggal’s presentation on “Reinventing the PMO” highlighted this problem in great depth and talked about PMOs evolving into an adaptive and ambient organization.  Duggal proposed an integrated PMO framework that focused on the following categories:
      • Execution and performance,
      • Strategic decision support,
      • Governance, and
      • Performance management & reporting

All in all, it was a great event for practitioners of project and project portfolio management.  There was something for everyone and I for one came away with nuggets of information that would be very useful to me as a PPM professional.

Filed Under: The Business-Driven PMO Tagged With: , , , ,