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Program, or Project?
• Many organizations say ‘project management’ when they mean ‘program management’ and vice-versa
• Really they are two separate disciplines
• A Project Management Office (PMO) might or might not be responsible for programs
• A program is typically a portfolio of related projects that deliver one or more benefits
The Four Key Components of a Project• Decision Management
• Governance
• Stakeholder Management
• Benefit Management
Decision Management
• Different from decision making
• Decision making:
• Tends to focus on the process of making a decision
• Measures the efficiency and acceptance of decisions
• Assumes that decisions are relatively static
• Decision management:
• Allows for ambiguity and uncertainty
• Focuses more on meeting strategic goals
• Features continuous assessment and adjustment
A Question
• Does it follow that the more data you have in hand about a particular problem, the better the decision that can be made?
Simple Decisions
• In low-ambiguity situations (the lower-right quadrant), the outcome of a decision can be fairly certain
• Same with low-uncertainty (upper-left quadrant); the path is fairly clear
• In both cases, decisions can be made simply with tools such as SWOT
• Not much intuition needed
• Decisions do tend to be static
More Difficult Decisions
• When ambiguity or uncertainty or high, data often isn’t enough
• In some cases it makes things worse! (Why?)
• Project-level decisions are often simple, but program-level decisions are typically not
Mintzberg’s Radical Model
• The model is fluid‣ When things are going well (low
uncertainty), use traditional tools to make decisions
‣ When things get tough, abandon rationality and do what it takes to get things calmed down again
• Do you think this model works well for program decision-making?
Mintzberg and Projects
• On a project basis, the do-what-it-takes approach isn’t all that bad
• Project plans tend to put bounds on the actions that can be taken
• Getting a project back on track through ‘heroic’ means isn’t all that unusual
• (After all, if project decisions were perfect, we wouldn’t need project managers)
A Decision Management Framework
• Thiery breaks the DM process into two broad pieces‣ Learning‣ Implementation
• Managers move from one stage to another in a continuous pattern
Learning Stages
• Within the learning part of DM, there are four steps‣ Sense-making: What is really
happening and what does this data mean
‣ Ideation: What are the various ways we can approach this problem?
‣ Elaboration: Combine ideas, develop alternatives, evaluate options
‣ Choice: Pick one and move on
Implementation
• The second portion of DM is implementation... doing what we decided to do
• From a project perspective, we are creating projects that will fulfill strategic decisions
• There might be several projects needed for implementation
• Many organizations stop at project delivery and measure success based on the project
• PMs are measured this way, too
Program Evaluation
• The missing step in many organizations is to relate projects back to strategic goals
• It’s the role of the program manager to constantly evaluate the constituent projects in terms of benefit delivery
• Project managers need to be aware of strategic goals but don’t often have visibility into the entire program
Who Cares?
• Strategy and programs and projects are all very nice, but who is it we are trying to satisfy?
• In the broadest term: stakeholders‣ Partners‣ Human Resources‣ Program and project managers‣ Customers‣ Management‣ Clients
Stakeholder Management
• Clearly there are many differing opinions on what success means, depending on who the stakeholder is
• Ignoring stakeholder expectations is a quick ticket to the unemployment office
• A significant part of program management involves stakeholder expectation management
• We’ll dig into this more in a future lecture
• For now we’ll outline the process
SM Process
• Identify who the stakeholders are
• Classify stakeholders by power level
• Identify key stakeholders
• Discover expectations of key stakeholders
• Do a feasibility analysis of top expectations
• Negotiate and inform
• Continuously assess program progress against expectations
Benefits
• While stakeholder expectations are typically ‘soft’ or unstated requirements, benefits are the tangible outcome of a program; it’s why we do programs
• A benefit can be‣ Enhanced or new capabilities‣ Contribution to a strategic objective‣ Financial (cost reduction, avoidance,
revenue)
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Why benefits analysis is needed…
• Benefits analysis identifies what positive value is expected to be obtained from a project.
• Helps in the assessment of whether the project is worth doing.
• Provides a basis for future assessment of whether the benefits were realised.
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Identifying the benefits
There are two types of benefits:
• Tangible benefits: where the dollar value of the benefit can be easily assigned because values are readily measurable.
• Intangible benefits: where the dollar value of the benefit is not able to be assigned.
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How are benefits identified…
• The sponsor of the project is the best person to identify the benefits. The sponsor owns the benefits.
• Consult with a number of different areas that are going to be impacted by the solution to identify additional benefits
• Brainstorming is a useful technique for identifying possible benefits.
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Examples of tangible benefits
• Reduce clerical labour costs
• Reduce clerical equipment expense
• Reduce space & overhead costs
• Reduce inventory carrying expense
• Reduce accounts receivable & bad debts
• Increase sales by 10%
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Examples of intangible benefits
• Improve customer service
•Make better business decisions
• Increase market share
•Better manage financial resources
• Improve company image
How-Why
• Here’s a quick way to figure out if you are working on a project or a program by thinking about benefits‣ In a project, the focus is usually on HOW
to do something...that’s the purpose of the project plan
‣ In a program we think about WHY we are doing something...that’s the program
• Clearly the measurement and management are different for the how versus the why
Formulation
• Primary goal: define the business case
• This first step can be triggered by external or internal pressure to change
• Consists of evaluating the change from several angles‣ SWOT‣ Mapping
• This phase will be revisited several times during the life of a program
Formulation: Vision and Mission
• The stakeholders agree on a common view of the end state
• At this point we are not looking at the how but rather the what, with a little why thrown in for good measure
• An aside: The higher up in an organization you are, the less how you worry about
• The mission statement that results might be only one sentence
Formulation: Define benefits
• Once the mission statement is complete, we come up with the enabling benefits that will help us reach the end state
• These benefits will end up being the programs that support the vision
• It can be surprisingly difficult to get people to agree on these...it is tempting to remain short-sighted, especially at a public company
• Stakeholder analysis can be used to create a prioritized list of benefits
Stakeholder analysis
• Everyone has slightly different needs, expectations, agendas, opinions, and so on
• As a program manager, if you ignore or don’t understand a group of stakeholders, you won’t be able to effectively manage
• Step 1 is to organize and classify the stakeholders‣ Group into broad areas (C-level, vendor, etc)‣ Figure out what influence each has on the
program
• Use this information to understand who the key stakeholders are
Needs and expectations
• Each group of stakeholders might have differing needs
• A need is‣ Something necessary for or desired by a
stakeholder‣ Either declared or undeclared‣ Potential or existing
• It’s critical for the program manager to gather as many needs and expectations as possible in the formulation phase
‣ If you miss significant ones, you’ll have to rework the program to meet them
• Note that the program definition of a need is different than that at the project level, where it is a requirement; in the program it is more ambiguous
• Use active verbs and measurable nouns to pull needs out of stakeholders (when hot pincers don’t work)‣ In order to increase growth by 20% next
quarter, we NEED to Reduce cost (by how much?) Improve productivity (by what percent?) Develop one new market (of what size?)
• These statements get distilled down to a handful of critical success factors, which must be agreed on by all of the stakeholders
A blueprint for success
• These high-level objectives are the input to the benefits realization plan, or program blueprint
• They are the starting point to begin discussion of the how
• While the realization plan can focus entirely on the transition (and this is how PMI does it), it often is more useful to do a complete gap analysis that shows the starting state, transition phases, and end state
Critical Success Factors
• Generally speaking these are the one or two key things at each level of a plan that have to go right for the program to succeed
• For example‣ Productivity remain high‣ Market share should grow Q2Q
• CSFs can be either generic or specific
• Generic: High-level, usually tied to broad organizational goals, but not necessarily to programs; these are the why of the company
• Specific: More closely related to specific strategic goals and thus tied to programs as benefits
• CSFs are usually qualitative (increase revenue) but must be quantified in order to measure them within the program (by 15%)...else how would you know that you’ve succeeded?
How do you pick CSFs?
• Not by hunch
• Not be political expediency (though you might have a few of these)
• You must figure out which are most important...the benefit breakdown structure is useful for this
• You can also use quadrant or other method with the stakeholders...the key is to make the decision objective
• Once picked, these are the metrics that the program manager must pay close attention to throughout the program lifecycle
• Prioritizing the CSFs with the stakeholders will make it crystal clear what the expectations are
KPIs: Measuring CSFs
• KPIs are the dimension of a CSF
• If the CSF, for example, is ‘increase ebook sales’, one KPI might be ‘by 15% by the end of Q2’
‣ The CSF would have been tied back to a strategic benefit of the program...‘become the market leader in YA ebooks’
• The KPI must be‣ Measurable‣ Feasible‣ Relevant‣ Sensitive enough to show change‣ Timely
• Just remember: MFRST
From CSFs come actions
• Once the CSFs have been identified, you can start to determine the HOW at a high level...these are the actions to take to effect the goal
• The actions tend to spin off into individual projects
• Generally you want one or more actions (projects) per CSF
• Techniques for generating actions include‣ Historical analysis‣ Brainstorming‣ Proposal-rebuttal
• The CSFs and associated KPIs and actions will form the initial business case
Gap analysis
• Many projects are an iteration on something that exists, whether that be a product, a service, process, and so on
• In a gap analysis, we ‣ Examine the current state thoroughly‣ Use stakeholder analysis to determine
what the end state should look like‣ Create a plan for getting from the
initial state to the end state
• A gap analysis is often one of the initial communications documents created
• The analysis might stand alone and be used as a way to solicit internal or external bids, or it might include a proposal to complete the work‣ If a proposal is included, most time and
budget values are very high level‣ The proposal is often for a feasibility study‣ In RUP terms the gap analysis is in the
Inception phase
• If the feasibility portion of the proposal is accepted, a statement of work would be created
• The SOW includes finer-grained detail of budget and schedule
• In most organizations it is the signed-off SOW that initiates a project
Conclusions
• As a project manager one of your most important jobs is to manage stakeholder expectations
• The mechanical part of running a project usually takes care of itself
• Figuring out who the real stakeholders are is a key to becoming a successful manager